The Fair Work Commission is considering a proposal to introduce 10 days of domestic violence leave for workers. Maria Hurley-Smith, a special counsel at Baker & McKenzie, discusses the proposal and existing domestic violence leave regimes – listen here.
The Fair Work Commission’s panel for annual wage reviews released its Annual Wage Review 2015-2016 decision today, 31 May 2016.
The decision provides that minimum award wages will increase across the board by 2.4%, effective 1 July 2016.
This decision will result in the following increases to Federal minimum wage rates:
- Weekly minimum wage: from $656.90 to $672.70 (increase of $15.80)
- Hourly minimum rate: from $17.29 to $17.70 (increase of 41 cents)
Otherwise, the percentage increase will apply to the minimum rates of pay contained in modern awards. Increases to minimum weekly wages will be rounded to the nearest 10 cents.
In fixing the increase at 2.4% (down on last years 2.5% increase), the Panel observed all measures of inflation and wages growth to be at historically low levels, but that the general economic climate was good, providing an opportunity for a modest increase.
Employers should now start to review their employees’ existing rates of pay to ensure compliance with minimum rates when the above changes commence on 1 July 2016.
As part of the Fair Work Commission’s first 4 yearly review of modern awards a Fair Work Commission full bench has handed down a decision which makes significant changes to the annual leave provisions in most modern awards.
The new annual leave model clause will give employers the right to direct employees to take annual leave in order to reduce “excessive” leave accruals (if specific requirements are satisfied) and will bolster the cashing out of annual leave provisions in the Fair Work Act 2009.
The model clause defines “excessive leave accruals” as eight weeks for full time employees or 10 weeks for shift workers, and establishes mechanisms to allow both employers and employees to reduce excessive leave accruals. This includes the requirement for:
a) either party to request a meeting; and
b) the parties to try and reach agreement on steps to be taken to reduce or eliminate excessive leave.
Tightening up the rules
In relation to the cashing out of annual leave, the full bench added four new “safeguards” to be included in all modern awards. These new rules:
- allow a maximum of two weeks’ paid annual leave to be cashed out in any 12 month period;
- impose specific record keeping obligations on employers;
- necessitate the signature of a parent or guardian if the employee is under 18 years of age; and
- will draw an employer’s attention to the general protection provisions in Part 3-1 of the Fair Work Act 2009 against undue employer influence and misrepresentation in relation to an employee.
The full bench also agreed to vary a number of modern awards to remove the obligation on employers to pay annual leave in advance (as opposed to during the usual pay cycle) and to facilitate agreement between an employer and an employee to take annual leave in advance.
Addressing leave rule changes in your business
Given the significant changes to the annual leave provisions in most modern awards, employers should:
a) ensure that they have an up-to-date copy of the modern award or awards which apply to their business;
b) take the time to familiarise themselves with the changes to the annual leave provisions in any applicable modern awards; and
c) ensure that current leave policies and/or procedures are consistent with the new minimum legal obligations.
 FWCFB 3406
An employer cannot assume that just because an employee has been absent, unwell, from the workplace for longer than a “temporary absence”, any ensuing termination will be lawful.
The Federal Circuit Court recently considered a termination following an employee’s lengthy absence. The employer in this case made a decision to terminate the employment of an employee due to his absence from the workplace on a period of unpaid leave for a period of ten (10) months and his then inability to return to work on a full time basis. Following the termination of his employment, the employee commenced adverse action proceedings in which he claimed that he had been dismissed because of his physical disability in having to be absent from the workplace to receive treatment for cancer.
The employer argued that the decision to terminate was lawful and not capable of constituting adverse action. The employer had relied upon the “temporary absence” provisions in the Fair Work Act 2009 (Cth) as a guide to determining when a lengthy absence might lawfully give rise to a reason to terminate. Those provisions prohibit termination for a “temporary absence”. A “temporary absence” is an absence taken for illness or injury (where notification and evidentiary requirements of the Fair Work Act have been met). However, an absence of this kind will not be a “temporary absence” where an employee’s absence extends for more than 3 months (or a total aggregate of 3 months within a 12 month period) where the employee is not on paid personal/carer’s leave (however described) for the duration of the absence.
In other words, terminating the employment of an employee for an absence that is longer than a “temporary absence” will not prohibit the discrete termination for temporary absence provisions of the Fair Work Act. However, there are a number of other provisions of the Fair Work Act (and other legislation) that are relevant in an illness-related termination. For example, more general provisions relating to disability discrimination.
His Honour Justice Driver found that the mere fact that termination for the employee’s absence was not prohibited by the “temporary absence” provisions of the Fair Work Act was not fatal to the employee’s claims about the lawfulness of his dismissal at large.
Lessons for Employers
This case is a timely reminder of the care that must be taken in considering ending the employment of employees with long-term illnesses. The fact of a lengthy absence alone will not provide a defence to general adverse action provisions (regarding workplace rights) or disability discrimination laws. Employers should at least seek current and relevant information from the individual employee, their treating doctor and/or an independent doctor (if appropriate) regarding the employee’s prognosis and likelihood of return to work. This level of due diligence will allow an employer to make informed decisions regarding matters such as an employees fitness for work, the basis of any return to the workplace and whether any reasonable adjustments could be made to accommodate such a return.
McGarva v Enghouse Australia Pty Ltd  FCCA