What are your work entitlements during natural disasters and emergencies?

After a season of devasting bushfires, Australia has now been hit by a tropical cyclone and severe storms causing serious material damages, road closures and flash flooding. These extreme weather events cause devastation and losses affecting individuals and businesses. Many employers are confronted with the impact these natural disasters may have on their workplace and employees. Employers and employees should be aware of their rights and obligations in the midst of a natural disaster.

Modern Awards, enterprise agreements and employment contracts may contain specific provisions in relation to an emergency or natural disaster. So, employers and employees should first check if any particular provision exists. If there is no such entitlement, the Fair Work Act 2009 (Cth) (FW Act) offers a range of available options.

Managing Employees During Natural Disasters

Natural disasters can force employers to temporarily close their business. In such circumstances, section 524 of the FW Act provides that an employer may stand down employees without pay during a period in which:

employees cannot usefully be employed because of a stoppage of work; and
the employer cannot reasonably be held responsible for the stoppage.

Bushfires or floodings may cause a stoppage of work for which an employer cannot reasonably be held responsible for. In that case, there is no obligation for employers to pay employees during the period of stand down, but they may choose to do so as a gesture of goodwill. In any event, it is recommended to notify in writing as soon as practicable those employees of the following:

the start date of the stand down;
whether the employee will be paid or not;
the effect on other employment entitlements; and
the date when the stand down is expected to end.

When employees are already on leave or authorised to be absent from work, stand down provisions do not apply to them.

Other alternatives should be considered before an employer stands down their employees without pay. The Fair Work Ombudsman advises that alternatives may include:

proposing employees to take a period of accrued paid leave, such as annual leave – this is only possible with the agreement of the employer and the employee;
if other worksites exist and have not been affected, considering voluntary work or hours sharing arrangements among sites and employees; or
organising flexible arrangements when possible, such as working from home.

Employee’s working arrangements can only be altered in accordance with the FW Act and any relevant award or agreement. Employers should keep in mind the safety and wellbeing of their employees when doing so.

Employees’ Entitlements During Natural Disasters

Natural disasters will often result in employees requiring time off to care for themselves or their family members. There is no specific form of leave available to an employee affected by a natural disaster. Employees who have accrued annual leave may use their annual leave entitlements in these circumstances, with the employer’s agreement. Otherwise, employees may be entitled to personal/carer’s leave or compassionate leave.

Personal/Carer’s Leave

Full-time and part-time employees may have an entitlement to take accrued paid personal/carer’s leave if they are unfit for work because of a personal illness or injury or to provide care or support to a member of their immediate family or household because of a personal illness, injury or in the event of an unexpected emergency. For example, if the school of an employee’s child closes due to a natural disaster, the employee may be eligible for personal/carer’s leave to take care of their child.

Employees who have used all of their paid personal/carer’s leave and casual employees are entitled to two days of unpaid carer’s leave for each particular occasion when a member of their immediate family or household requires care or support due to illness, injury or in the event of an unexpected emergency.

Compassionate Leave

Employees are entitled to two days of compassionate leave for a particular permissible occasion to spend time with a member of their immediate family who has sustained a life-threatening illness or injury or after the death of a member of the employee’s immediate family. Employees, other than casual employees, are entitled to be paid during compassionate leave.

When taking personal/carer’s leave or compassionate leave, employees must give their employers notice of the taking of leave and provide evidence to support the leave period if required.

Community Service Leave for Volunteering

Pursuant to section 109 of the FW Act, employees who are members of a recognised emergency management body may be entitled to take unpaid community service leave for the purpose of engaging in an eligible community service activity, such as dealing with an emergency or a natural disaster, on a voluntary basis.

The FW Act does not specify the amount of time that can be taken. However, the absence of work must be reasonable having regard to the following circumstances:

time when the employee engages in the activity;
reasonable travelling time associated with the activity; and
reasonable rest time immediately following the activity.

During the recent bushfire crisis, the current legislation has been criticised as providing insufficient support to those assisting emergency services as volunteers. The minimum standards in the FW Act can be improved by state law, enterprise agreements or other arrangements implemented by employers in the private sector. It may be unreasonable to expect small businesses to pay their employees when volunteering. However, larger companies have started to implement more generous volunteer leave arrangements allowing employees to take paid leave when they are away volunteering in emergency services. In response to the crisis, the government has announced a federal scheme to compensate volunteer firefighters. They have also granted an additional four weeks’ paid leave for volunteers firefighters employed in the public sector. However, those announcements have not been enough to stop criticisms in the management of the recent bushfire crisis.

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April 30

Junior pay rates in modern awards: Are young people being ripped off?

A “fair go all around” has long been an underlying principle in the Australian industrial relations system. However, under many modern awards, employees aged between 15 and 20 years receive only a portion of the full adult wage despite often undertaking the same work as an adult. For those junior workers who do not fall under a modern award, the national minimum wage operates to a similar effect. This begs the question, are these young workers really getting a fair go all around?

Why are young people on a lower wage?

The justification for paying young people a lower rate for the same job is that it is actually for young people’s benefit. For instance, a lot of young people seeking work are generally inexperienced and unskilled. An employer thus needs a reason to employ them over someone who has experience and skills which are qualities that older workers often bring to the table. Therefore, lower wages for young people is said to encourage employers to employ young people, providing more entry level jobs for young people whilst compensating employers for the higher training costs associated with younger workers.

Should lower wages for young people be abolished?

If the youth wage were to be abolished, then the rationale goes that employers would have no incentive to employ young, unskilled workers and as such, entry into the job market would become increasingly difficult and youth unemployment would sky-rocket. The 1999 Productivity Commission Report on the youth wage confirmed as much. That report found that a ‘1% increase in youth wages would result in a decrease in youth employment from about 2-5%’. The findings of this report have consistently been touted in support of indexed youth wages.

How are adults with no experience treated under modern awards?

The justification for paying young people junior rates regardless of their skills and experience starts to unravel with a few examples. For instance, a 19-year old might have worked as a kitchen hand for 3 years but will receive 85% of the adult rate under the General Retail Industry Award 2010. In contrast, a 26-year old who has no experience working as a kitchen hand will receive the full adult wage.

Similarly, an 18-year old starting their first job at a fast food restaurant as a casual will receive $20.08/hour which is 80% of the adult wage under the Fast Food Industry Award 2010. However, a 23-year old also with no experience will receive the full adult wage of $25.10/hour. Although the 18-year old and 23-year old both have no experience, the 23-year old is still paid the adult wage.

Indeed, the Fair Work Commission (FWC) has somewhat recognised the inequality generated by the junior rates. In March 2014, the FWC decided to increase the Award wage for 20-year old employees that were covered by the General Retail Award. The ruling ensured that 20-year old employees were now paid the same rate as adults provided they had worked with the company for 6 months.

So, what is the solution?

If the whole point of junior rates is to incentivise employers to employ inexperienced and unskilled workers, then the solution may be to pay new and inexperienced workers a lower rate. For instance, in New Zealand, there is a “starting-out wage”. This is paid to 16 and 17 year old employees for the first six months of continuous employment with their current employer and is equal to 80% of the adult minimum wage.

At present, the system is not ideal and can result in unfairness to young people who are performing the same work as similarly experienced and skilled adults but are not receiving the same pay. I will be interested to see how this area of law develops in the coming years as the FWC strives to balance the notion of “a fair go all around” with facilitating entry into the job market for young, unskilled workers.

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January 24

Growing support for a workplace response to domestic violence

Violence against women is now recognised as a serious and widespread problem in Australia. Whilst awareness has increased of domestic violence as a community issue, there is still much to be done to support victims. 2017 saw an increase in support for a workplace response to family violence, through the inclusion of family and domestic violence leave in all modern awards, or the National Employment Standards. At a minimum, unpaid leave looks likely to be inserted into modern awards in 2018, meanwhile the unions, Greens and Labor Party continue to push for paid leave.

What is domestic violence leave and why is it needed?

Family and domestic violence leave provides victims of violence by a family member time off work to attend legal proceedings, counselling, and medical appointments, as well as relocating or making other safety arrangements. Paid family and domestic violence leave can ensure financial security and support victims escaping abusive relationships.

Some large private sector employees, such as Telstra, KPMG, Woolworths, IKEA, NAB, Westpac and PwC, currently provide paid family and domestic violence leave entitlements. In addition, most State governments have domestic violence protections for their public servants, some of which include paid leave. However, the majority of Australian employees are reliant on a modern award for their minimum entitlements, and the unions are pushing to standardise workplace support.

ACTU’s application for paid domestic violence leave

In July 2017, a bid by the Australian Council of Trade Unions (ACTU) to have 10 days paid leave available to Australia’s two million award dependent employees, was rejected by the Fair Work Commission.

The Commission acknowledged that domestic violence is a significant problem in society, in the workplace, and for the national economy. It noted the inability of existing workplace entitlements to meet the needs of employees who experience domestic violence as their need for leave is often urgent and they may not able to request annual leave or flexible work arrangements at short notice. However, the Commission was not satisfied that ten days paid domestic violence leave was necessary to meet the objectives of the modern award and concluded that a cautious approach should be taken to the introduction of domestic violence leave, citing concerns over increased employer’s costs and the lack of data or evidence regarding the operation of such leave.

However, the Commission formed the preliminary view that an unpaid leave entitlement should be included in modern awards to enable victims to deal with the consequences of the violence. The Commission is currently reviewing submissions on the drafting of such a provision, such as what quantum of unpaid leave is appropriate, who can access it, and notice and evidence requirements.

Introduction of the Greens bill

In late November 2017, The Greens released draft legislation to introduce 10 days’ paid family and domestic violence leave as a new entitlement in the National Employment Standards (NES). The Australian Labor Party had previously committed to five days paid leave in the NES, but in response to the Greens bill, in early December, they raised their commitment to ten days.

Resistance to the introduction of paid domestic violence leave

The Coalition and some employer representatives have resisted the extension of paid family violence leave to all employees in Australia, through inclusion in modern awards or the NES. Their primary concern is that paid domestic violence leave would impose a significant and undue expense on employers, with the Australian Chamber of Commerce and Industry (ACCI) claiming it could cost employers as much as $205m to create just one day of domestic violence leave per worker per year.

A common objection from employer groups is that domestic violence is a societal issue, not a problem that is created by employers, and as such, a government funded national system of domestic violence leave is required, in the same manner as paid parental leave. Other opponents of the proposal argue domestic violence leave is just another union shakedown, and any paid family violence leave provisions will be abused to justify non-necessary work absences, i.e. it will become the new “sickie”.

There is also a concern that the current proposals might drive a further divide between the entitlements of permanent and casual employees. The paid family violence leave provisions currently available in some enterprise agreements generally only cover employees in full time or part time employment, when casual employees facing violence do not even have access to paid annual or sick leave entitlements. The ACTU submits that 51% of award-covered women are employed as casuals, so it is essential that casuals are included in any amendments. Otherwise, paid family violence leave will only serve to further incentivise employers toward casualisation of the workforce.

There is also recent research which challenges the effectiveness of paid domestic leave policies, with the conversion from policy into practice falling short. A survey of HR professionals published by the Australian HR Institute in September 2017 concluded that Australian workplace domestic violence policies don’t translate into practice. Only 14% of respondents currently report any form of specific training for supervisors and managers to help victims disclose domestic violence, and only 18% have any form of manager training to recognise victims of domestic violence.

Arguments in response

Research by the Centre for Future Work at the Australia Institute suggests that the costs of paid domestic violence leave is unlikely to impose a noticeable increase in labour costs for employers, and any costs are likely to be largely offset by benefits such as reduced turnover and improved productivity. Only about 1.5% of female employees and around 0.3% of male employees are likely to utilise paid domestic leave provisions, costing $80m to $120m per year. The massive discrepancy in cost compared the ACCI’s modelling, derives from utilisation assumptions, with the ACCI’s figures based on 25% of female and 10% of male workers accessing the leave each year. The ACCI utilisation rate is far greater than what has been experienced by employers who already have paid domestic leave provisions in place.

Supporters of paid family violence leave argue that there would be two tests to ensure the system is not open to abuse, and would restrict the incidence of leave-taking to subset of those workers who actually experience domestic violence. Firstly, the leave must be related to specific activities or events related to the violence, to support employees in their efforts to escape the violence. It’s not intended as compensatory leave for victims. Secondly, documentary evidence must be provided regarding the nature and timing of those events if requested, such as a note issued by police, a doctor, or a lawyer, for example.

With regards to casuals, the unions bid for paid leave to be included in the modern awards, and the Greens’ bill regarding the NES, both provide for paid leave entitlements to be extended to casual employees. Under the ALP’s proposal, casual workers would be entitled to unpaid leave.
Conclusion

The argument that paid family and domestic violence leave is too expensive has been refuted by the research which considers the actual experience of several Australian employers who have already implemented paid leave policies. It shows that in practice, paid leave entitlements are not frequently utilised, and any incremental costs are offset by the broader economic benefits.

The complexity of family violence requires a strategic approach by all levels of government, business, and the community. Developing a workplace response to domestic violence also requires support measures besides paid leave, such as training for managers to help victims disclose domestic violence, referral of employees to appropriate domestic violence support services, flexible work arrangements; and no adverse action or discrimination of the victims of domestic violence. Unless workplaces take measures to promote disclosure, and managers are trained to support their employees, the stigma already involved in revealing domestic violence is unlikely to dissipate, and the purported benefits and costs of providing paid family and domestic violence leave are unlikely to be realised in any event.

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