This online magazine was recently sent a question and answer on the complex problem of falling foul of the minefield of legislation covering the subject of employing people.
I asked the two people involved if I could publish the correspondence with a view to assisting those in our industry that may be contemplating employing people. They replied in the affirmative.
Kevin Frew, the owner and CEO of Frew Signs & Graphics sent the question to Stephen Alexander, the principle of Alexander Industrial Relations.
The Question from Kevin Frew:...
I am proposong taking on a new employee. I would like to ask for some advice on how to avoid the essential pitfalls of employing people.
The answer from Stephen Alexander:
Dear Kevin,
Thank you for our query re starting a new employee – “What are the essential pitfalls?”
A timely question, and here is my advice -as it is to any employer. It is important to note that the suggestions herein relate to basic issues at the time employment commences.
There are literally thousands of pages of legislation relating to the employment relationship. The employer’s refrain that the system is far too complicated is true. You should seek advice as the relationship develops with your employee particularly if questions arise about the employee’s performance.
First and foremost – every employer should do as you have done – seek advice.
You, as the prospective employer, will have a first-hand understanding how many hours you will require your employee to work and what the duties of that employee will be.
When you advertise make certain the ad. is accurate. You will not want a disgruntled employee claiming later that he/she was not employed to carry out your specific requests. Believe me, it happens.
If you are requiring a full-time employee as a first employee you must be working exceedingly long hours – not good for lifestyle!
A part-time or casual employee is the most likely option. Part-time, or casual? Steer clear of casual employment – it sounds far better than it is in reality.
Most prospective employers justify casual employment on the basis that a casual employee can have his/her employment terminated usually with only two hours’ notice whereas it takes a week to terminate the employment of a part-timer, despite the fact that during the probation period you are free to terminate at a week’s notice at will. True. However, by far the greater majority of employees, part-time, full-time or casual last longer than one first imagines. Statistics demonstrate that casuals are more long-lived than full-time or part-time employees. Secondly, and most importantly, a casual employee costs the business a 25% loading in wages every single week – think about it – every four weeks the employer pays an extra week’s wages, or 13 weeks wages extra every year. It is also true that they are not paid sick pay. Neither do they receive holiday pay but on an annual basis a casual employee never-the-less, is paid far more hard-earned cash than a part-time or full-time employee.
Another supposed benefit is that a casual cannot bring an action for unfair dismissal – but remember, this only lasts for the first twelve months after which the employer is open to an action for unfair dismissal.
It is also critical to note that recent Fair Work Commission decisions have held that casual employees have been declared to be either part-time or full-time employees despite the fact that they have been employed as casuals and paid the 25% loading. All prospective employers MUST get advice!
If you do employ a casual be absolutely certain that the employment is on an irregular, intermittent basis. Such a position will not help an employer who needs regular hours whatever those hours may be.
Above all – get the employment agreement in writing. The Commission has recently stated that it wished employers would ensure all employments are reduced to writing. It helps time but note also, it does not solve all questions.
It is mandatory to provide the Fair Work Information Statement to all new employees.
If you would like further advice please contact Steve Alexander of Alexander Industrial Relations 5444 0061 on sortitout.com.au mobile 0419 776 447.
Frew Sign & Graphics
www.frewartworks.com.au
Alexander Industrial Relations
www.sortitout.com.au
