Workforce Effectiveness - HRM online https://www.hrmonline.com.au/hr/workforce-effectiveness/ Your HR news site Tue, 16 Jul 2024 07:10:51 +0000 en-AU hourly 1 https://wordpress.org/?v=6.5.5 https://www.hrmonline.com.au/wp-content/uploads/2018/03/cropped-HRM_Favicon-32x32.png Workforce Effectiveness - HRM online https://www.hrmonline.com.au/hr/workforce-effectiveness/ 32 32 Lessons on building high-performing teams from a sports psychologist https://www.hrmonline.com.au/performance/lessons-high-performing-teams-sports-psychologist/ https://www.hrmonline.com.au/performance/lessons-high-performing-teams-sports-psychologist/#comments Tue, 16 Jul 2024 07:10:51 +0000 https://www.hrmonline.com.au/?p=15479 To grow high-performing teams, organisations need to prioritise relationships, ensure regular debriefs and allow time for recovery, says sports psychologist Dr Pippa Grange.

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To grow high-performing teams, organisations need to prioritise relationships, ensure regular debriefs and allow time for recovery, says sports psychologist Dr Pippa Grange.

When sports psychologist, culture coach and author Dr Pippa Grange was recently tasked with helping a tense team navigate a high-stress acquisition discussion, she intervened with a surprising activity.

“I took them trampolining. Everybody said it was ridiculous, but within 10 minutes they were all laughing. It broke the tension and helped them regain perspective,” says Grange, who is a keynote speaker at AHRI’s upcoming National Convention and Exhibition in Melbourne, and is also conducting a masterclass on identifying and leveraging deep wins at work.

“Fun is a form of release. It’s a neurological, chemical and hormonal reset, and an opportunity to rebalance from over-performance and stress.”

Grange has worked as a psychologist with high-level soccer, AFL, rugby league and Olympic teams, with extreme endurance athletes, and with businesses all over the globe. 

One of her career highlights was working with the England soccer team at the 2018 World Cup. 

“They got to the semis after a long period of underperforming and the nation celebrated with them,” says Grange.

No matter her client, she has one core aim: boosting performance while also fostering a healthy, supportive culture.

“HR and sports psychology complement each other. Both are about helping people find their best and perform well. In this way, leaders are like coaches, and vice versa – always seeking the balance between output and wellbeing,” she says.

She believes the key to high-performance cultures is building strong relationships through honest connection, storytelling and genuine feedback, whether on the sports field or in the office. 

“The quality and character of relationships that we have with each other will determine the level of performance that we’re able to output,” says Grange, who, after working in Australia for 20 years and Los Angeles for two, now lives in England’s Peak District.

She was originally attracted to sports psychology because she liked the idea of working with motivated people.

“I thought this would provide opportunities for both one-on-one and systems work. It felt like an opportunity to create real change.”

As she got into the field, she realised that motivated humans are complex. 

“Most of the work I’ve done is about the human being, not their performance. [I’ve helped] people understand who they are, how they operate best, what they want and how they can get there.”

It’s not about her coming in and being a performance “guru”, she adds.

“If you’re not focused on both the person themselves and the system they’re operating in, you won’t find high performance.”

Team bonding for improved performance

On the sports field and in the workplace, performance starts with teamwork, says Grange. But this can’t be imposed from the top; it needs to come from the ground up through mutual understanding and clear communication around goals.

“Start with understanding what actually motivates your teams. It might not be what you think. Motivation builders are communication, purpose and feedback. Discipline builders are clarity, feedback, clear methods and skill building.

“In sport, it’s not all about the end goal, it’s also about what we’re working on this week. And that’s a nice translation into some workplaces too. It’s about a group’s clarity of purpose over a block of time.”

Keeping a team on track requires regular debriefs, she says.

“The ‘hot debrief’ after weekly or daily performance and ‘emotional hangover work’ after big events both speak to strong, cyclical feedback cultures that normalise continuous conversations about performing and succeeding while being human.”

“We used to see resilience in terms of bouncebackability and grit. For me, it’s a lot more to do with adaptability and being allowed to be a whole human.” – Dr Pippa Grange, sports psychologist and author

Busting misconceptions about high-performing teams 

Over her career, Grange has sought to unpack, break down and replace some of the destructive narratives that shape our lives.

Part of that work has manifested in her book Fear Less: How to Win at Life Without Losing Yourself, which is about living with less fear and more freedom.

“Fear is amplified or lessened in cultures and environments as much as in individuals’ minds. There’s a lot you can do in systems and processes, and with symbols, language and power dynamics, to lessen it and build confidence,” she says.

Just as fear can hold us back, so too can a constant pursuit of productivity.

Grange maintains that high-performing teams shouldn’t come at the cost of wellbeing, and having good, caring cultures shouldn’t come at the cost of winning. High-performance and good culture aren’t mutually exclusive. 

“Workplaces are under so much pressure for profit or shareholder values, and this creates a downward flow where people can [feel like] never-ending productivity machines. The level of burnout we’re seeing is not random.”

To rejuvenate their minds and spirits, people need space to both rest and recover, which are two different things, says Grange. 

“Recovery is about finding the space to regenerate our creativity and curiosity, our humour and our energy.

“Creating ‘psychological space’ for people means they don’t have to perform constantly and can regenerate. Compromising on wellbeing is only a short-term gain for a person and an organisation.”

So how can companies help employees find psychological space to recover? It can be as simple as giving permission, setting good boundaries around working hours and allowing the sharing of stories and experiences, she says. 

“When companies start talking about what high-performance looks like, they need to recognise that it’s a triangle of work, rest and recovery. It’s not just a line between work and rest.”

What generates motivation, she says, is people’s ability to be authentic and share their stories with each other.

“Everybody who walks through the door of a workplace is asked to buy into a story, a vision and a purpose. Stories shouldn’t just come from the top, but also from the shop floor and the home offices. They should be an exchange. It’s making everyone feel like they genuinely belong and are part of something.

“You need practices that genuinely build on belonging, not just inclusion.”

Building more resilient teams

While some people may feel that ‘resilience’ has become somewhat of a buzzword that’s tightly linked to output, Grange says its meaning has evolved.

“We used to see resilience in terms of bouncebackability and grit. For me, it’s a lot more to do with adaptability and being allowed to be whole and human while performing, versus living in roles, categories and boxes. It’s about minimising drama [while] being real and honest, allowing emotions to arise, but still processing them.”

How do you help employees and teams foster resilience? 

“It’s principally about quality relationships that provide a social web for all challenges. Cultures that embrace courage, vulnerability, challenge, care and the will to change are resilient,” she says. 

Anticipatory guidance and foresight helps boost resilience, she adds. If something tough has happened, such as a round of redundancies, giving people space to ask questions, air concerns and share perspectives is important. 

“People find it much tougher to maintain resilience when they get ambushed by circumstances, or if they’re kept in the dark. Telling the truth about where things are at and allowing people to participate in being resilient makes a big difference.” 

Culture work is unlike other kind of organisational work, says Grange, and culture leaders often need different timescales, methods and measures to drive real change. 

“Culture, like ethics, should be a verb – a doing word. It’s daily work that lives in interactions and exchanges, as well as in big initiatives,” she says.

“It’s an ongoing effort to create an environment that supports psychological safety, trust and compassion, and it’s also building systems that actually reward and resist what you do and don’t want to see in the culture. Great culture is signified by an organisation that is present, observing, focused and active in considering ‘what ought we to do’ – and then actually doing it.”

A longer version of this article first appeared in the June/July 2024 edition of HRM Magazine.


Dr Pippa Grange will be speaking on  cultivating authenticity and vulnerability in the workplace at AHRI’s National Convention and Exhibition in August. Don’t miss the chance to hear from inspiring thought leaders and master practical strategies for now and the future. Secure your spot today.


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The impact of multiple decision-makers in dismissal cases https://www.hrmonline.com.au/section/featured/multiple-decision-makers-in-dismissal-case/ https://www.hrmonline.com.au/section/featured/multiple-decision-makers-in-dismissal-case/#comments Fri, 28 Jun 2024 04:11:22 +0000 https://www.hrmonline.com.au/?p=15408 A recent Federal Court case has shed light on the complexities of dismissal decisions involving multiple stakeholders.

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A recent Federal Court case has shed light on the complexities of dismissal decisions involving multiple stakeholders.

A recent case has provided further guidance in Australian employment law on the role of multiple decision-makers in matters involving the termination of employment

This case serves as a critical lesson for HR and employers on the importance of either a unified approach by all decision-makers involved in the termination process, or having a single impartial decision maker. 

The case also illustrates the importance of employers providing thorough and transparent reasons for termination of employment.

A brief outline of the case in question

In April 2020, a former employee and truck driver for a freight and logistics employer filed an adverse action application, alleging that the employer wrongfully dismissed him from his position.      

Among other allegations, he claimed that this action was in contravention of statutory protections, as he had exercised a workplace right and believed that the dismissal was in response to him exercising this right.

The Federal Circuit and Family Court found that the former employee’s dismissal was not due to alleged safety breaches or unprofessional behaviour as asserted by the managers. Rather, the Court found that the dismissal constituted unlawful adverse action against the former employee by the employer in relation to having exercised workplace rights, including requesting flexible work arrangements, querying the alleged underpayment and initiating proceedings with the Fair Work Commission.

The dismissal occurred after the national HR manager perceived the former employee’s queries about a flexible work arrangement to care for his child, and his queries about alleged underpayment, as “badgering” and “harassing”. 

The Court found that most of the former employee’s email interactions were respectful, and that he was seeking solutions to genuine issues, not harassing the HR manager. 

The HR manager acknowledged to the Court that in the event of significant safety violations involving an employee, it would be standard procedure for the overseeing manager to initiate a comprehensive investigation. However, the HR manager admitted that there was no paperwork before the Court about any investigation having been conducted into any of the alleged safety matters involving the former employee.

The Court highlighted that there was no documented evidence showing how the single alleged safety incident, which reportedly resulted in a “verbal warning”, transformed into a history of safety issues in breach of the employer’s ‘Three Strike Policy’, or “continual breaches” of that policy, which were given by the employer as reasons for the dismissal decision. 

The Court pointed out that there was a deficiency of credible evidence from the employer regarding the investigation and clarification of supposed safety issues involving the former employee. Moreover, evidence of the explanations provided by the employer for the dismissal was either non-existent or lacked credibility as to how the alleged safety concerns were factored into the decision to terminate the worker’s employment. 

This lack of evidence and plausible explanation convinced the Court that the alleged safety issues likely never occurred. Further, the Court held that the safety issues could not have been significant or influential factors in the decision to dismiss the former employee. 

The Court found no evidence of the serious safety issues that were claimed to have occurred, and accordingly, concluded that these could not have been substantive or valid reasons for the dismissal.


Position yourself as a go-to employment law expert with this short course from AHRI.


The intricacies of decision-making in dismissal cases

A key aspect of this case was the involvement of multiple decision-makers, including the national HR manager, a partner of the business, the national transport manager and two state-level managers. 

Despite there being five decision makers, only two of these individuals provided evidence to the Court about the reasons for the dismissal of the former employee – the national HR manager, and the national transport manager. 

The Court found no explanation or evidence capable of discharging the reverse onus imposed on the employer in matters like this. 

Accordingly, the Court was satisfied that adverse action had been taken against the former employee by the employer in dismissing him from his employment for exercising his workplace rights.

Understanding the reverse onus of proof 

Under the applicable Australian law, once an employee establishes an apparent case that their dismissal may have been due to the exercise of workplace right(s), the onus shifts to the employer to prove otherwise. 

In this case, the employer had failed to discharge the reverse onus as it did not provide sufficient evidence or explanation from all decision-makers involved in the dismissal of the former employee.

The Court determined that the employer did not provide adequate evidence to counter the presumption that the former employee was dismissed for exercising his workplace rights. 

Image via Pexels

The absence of evidence from other decision-makers besides the national HR and transport managers left the Court without a substantive defence from the employer. 

The ruling stated: ‘There was no opportunity for the state of mind or mental processes of the not-called other joint decision-makers to be exposed to or considered by the Court. Further, the Court can also infer that those other joint decision-makers were not called because their evidence may not have assisted [the employer’s] case that the reasons for the dismissal were limited to alleged safety issues and alleged unprofessional behaviour.” 

The judge noted that the former employee’s minor disrespect in an email came late in a series of communications and did not justify dismissal. Instead, the timing suggested that a reason for dismissal may have been the former employee’s threat to involve the Fair Work Ombudsman, which occurred the day before the discussion of his dismissal.

Further, the national HR manager and national transport manager admitted that they had omitted some reasons for the former employee’s dismissal in the dismissal letter. The Court found that these omitted reasons included the former employee’s complaints about underpayment, which are a protected workplace right. 

Lessons for HR and employers 

This case highlights several important lessons for HR and employers. Firstly, it’s essential that all decision-makers are aligned and that their reasons for termination are comprehensively documented and presented. 

Had the employer in this case led uniform evidence from all the decision-makers about the reasons for termination, the result may have been different. Discrepancies or omissions in the reasons for dismissal will likely be detrimental, as seen in this case.

Secondly, employers must be aware of the reverse onus of proof where purported workplace rights are being exercised and prepare accordingly. This involves having a clear, documented rationale for termination that is not related to an employee exercising a workplace right. 

Finally, where possible, employers should elect to have an impartial and sole decision maker in dismissal matters – ideally, someone who is not involved in any previous process or the facts of a matter which may lead to the dismissal of an employee. 

The decision maker should ideally not be familiar with or involved in any workplace rights that the employee may have, or have exercised. Their decision regarding any disciplinary action, including dismissal, should be based objectively on the employee’s performance, conduct or behaviour. Accordingly the decision maker’s lack of knowledge about any workplace rights in the matter, would be advantageous. 

This decision is a reminder of the consequences of inadequate preparation and inconsistent decision-making in adverse action cases. 

The matter is set to proceed to a penalty hearing for the contravention of the relevant legislations, with legal costs reserved.

Aaron Goonrey is a Partner and leads the Australian and APAC Employment & Rewards practice at Pinsent Masons and Yuliya Chis is an Associate at Pinsent Masons. The advice in this article is general in nature and does not constitute formal legal advice.

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How a revamped onboarding program helped ASC navigate major change https://www.hrmonline.com.au/section/featured/revamped-onboarding-to-navigate-change-asc/ https://www.hrmonline.com.au/section/featured/revamped-onboarding-to-navigate-change-asc/#comments Thu, 13 Jun 2024 05:57:15 +0000 https://www.hrmonline.com.au/?p=15376 Through its award-winning onboarding program, ASC was able to navigate a challenging period and foster a supportive environment for a huge crop of new recruits.

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Through its award-winning onboarding program, ASC was able to navigate a challenging period and foster a supportive environment for a huge crop of new recruits.

An employee’s first few days in a new organisation can have an enormous impact, particularly during periods of change.

In 2021, ASC, which has served as Australia’s sovereign submarine builder and sustainer for almost 40 years, was faced with the challenge of onboarding hundreds of new employees during a period of intense change and against the backdrop of pandemic lockdowns. 

This challenge prompted ASC to devise a refreshed onboarding program with a more strategic, innovative and supportive approach. The success of the new program saw the company win the Best Learning and Development Strategy Award at the 2023 AHRI Awards.

“This program has resulted in a much better experience for all employees joining the business,” says Sally Renshaw, Talent and Organisational Development Manager at ASC. 

“We continue to run the induction program today, and ASC’s Executive Committee and senior leaders are very much invested into it. It’s not just an HR initiative – it’s actually how we as ASC care for our people as they join our business.”

Renshaw spoke with HRM to provide an in-depth look at the strategy that led to the program’s success.

Responding to change with a revamped onboarding process

The decision to develop a new onboarding program was made in 2021 in response to the announcement that approximately 350 employees would be joining ASC from other shipbuilding employers. 

This change came about as a result of a Government decision to cease the Attack class submarine program and the need to retain Australia’s submarine skilled workforce, which solidified plans for Australia to acquire nuclear-powered submarines. 

“It happened very quickly,” says Renshaw. “A number of people were essentially losing their jobs, and even though it was great news and they were being offered employment with us, that’s a huge change. We were thinking about that as part of our design – we really wanted to help people navigate that change and help them have some tools to be able to support themselves.”

Previously, explains Renshaw, ASC’s onboarding process consisted mostly of eLearning modules on safety and compliance. But, with so many new starters joining the organisation, the HR team recognised the need for a more consistent and well-rounded onboarding process that increased speed to competence and offered a real taste of the company’s culture and operations. 

This would also ensure leaders were not overwhelmed with having to onboard dozens of new employees from scratch. 

Based on these needs, the team devised the new Corporate Induction Program in just six weeks. They took care to ensure that the program offered a balanced view of the organisation’s mission and values to build an early sense of connection and belonging.

“We talk about our strategic pillars  and what this business is here to do – so the why of our business – but also it helps them understand the how of the business, the different structures, the different teams and how they interface with each other,” says Renshaw.

“[For example], we take them to the shipyard as part of this experience and get them to touch and see the submarine and understand what it really looks like… And I think it helps them understand our deeper purpose.”

Image supplied by ASC

Prioritising wellbeing during onboarding

Many of the employees who were redeployed faced sudden and unexpected changes to their careers, so it was important that the program addressed their wellbeing and readiness to join a new team, says Renshaw.

This led to the decision to structure the induction program around two distinct pillars: ‘About ASC’, and ‘About You’.

“[The ‘About You’ modules] supported people to learn some coping strategies and understand that change and loss are normal, and that, actually, they had a lot to gain as they were joining our organisation,” says Renshaw.

While the ‘About ASC’ sessions provided an understanding of the company’s history, mission and operations, the ‘About You’ sessions, interspersed throughout the program, covered diversity and inclusion, wellbeing, networking and personal development through tools such as the Team Management Profile (TMP).

TMP is a psychometric tool used to help individuals understand their work preferences, strengths and areas for development within a team context, explains Renshaw. It’s designed to enhance teamwork and communication by providing insights into how team members can best collaborate and support each other.

“It removes the hierarchy because we’re all new and we’re all here to learn together. And that creates a nice safe space for people.” – Sally Renshaw, Talent and Organisational Development Manager, ASC 

During the program, each participant completes a detailed questionnaire, which is analysed to create an individual profile. This profile highlights their work style and preferred roles in a team, and how they collaborate best. Participants are then given the chance to apply their unique work style in a group workshop.

“It helps them understand what their own preferences are, and then how they can work with others more effectively. That is always a huge hit,” says Renshaw.

Another popular aspect of these sessions is the use of device-based simulations to help employees understand the importance of strategic networking.

“It’s essentially gamification,” she says. “Everyone sits with a laptop, we set up the simulation and they are provided with a scenario. It’s nothing to do with submarines, or our business per se, but everything to do with understanding that if we’re just thinking about ourselves and our own needs, we’re not going to be able to move ourselves forward collectively. 

“At the start, people think it’s all about them and winning. And then, at some point, they realise it’s not, and they need to bring others along on the journey to succeed. It becomes more of a team approach, and you see the people who have a ‘we’ mindset are the ones who get further along in the game.”

Crafting a consistent onboarding experience 

As well as making new starters feel welcome and valued, one of the team’s key objectives was to ensure the program was as flexible as possible. Given the scale of onboarding required, it was important to ensure the program was suited to employees from all levels of the business.

“Whether you’re an apprentice, a graduate, an executive, or anywhere in between, you come into the organisation the same way. So it’s really consistent, and everyone gets to have the same experience when they join,” says Renshaw.

“They’re also from a diverse range of departments – we have engineers, supply chain professionals, project managers, et cetera… So there’s opportunity for people to start building a network, which is one of the key differentiators of the program. It removes the hierarchy because we’re all new and we’re all here to learn together. And that creates a nice safe space for people.”

This has had the knock-on effect of improving cross-departmental collaboration, she says, as employees feel comfortable reaching out to familiar faces from their induction regardless of where they sit in the business.

The team also had to take into account the fluctuating levels of new starters coming through the program, as well as adjustments to accommodate remote onboarding during the 2021 lockdown periods. 

While ASC’s preference is to deliver most of the program face-to-face, the individual workshops and sessions with expert speakers were designed to easily migrate online when necessary, and were made available on-demand to accommodate changing schedules.

In order to ensure the program was adaptable enough to withstand further periods of transition, it was broken down into flexible modules, which build on each other to create an overarching company story, but can be completed in any order. 

“We simplified our operating model into a one-page document, and the whole program has been built around that,” says Renshaw. “So, we’re slowly sharing the operating model and how each piece fits in, giving them bite-sized pieces of information that they could retain and understand, and then building on that for the next piece.”

An empathetic approach

For organisations looking to embark on similar initiatives, Renshaw stresses the importance of taking the time to understand the unique needs and circumstances of participants when crafting an onboarding program like this.

“Part of our design was taking an empathetic approach,” she says. “It’s really important that we put ourselves in the shoes of others and that time is spent connecting with stakeholders to understand the challenges and the opportunities through their eyes. Then we design solutions that meet those needs.”

The value of this approach has shone through in feedback from new hires. Following the induction, 93 per cent of participants agreed or strongly agreed that they felt more comfortable about starting at ASC, and 99 per cent agreed or strongly agreed that the program provided them with key information about ASC and how the business operates. 

The fact that the program had been designed and implemented in a very short timeframe in a turbulent environment made its success all the more rewarding, says Renshaw, and having this achievement recognised with an AHRI Award last year was an immensely satisfying moment.

“We were quite a small team – there were just four of us,” she says. “We put our heart and soul into developing this program, so to get that recognition of our work was fantastic.”


Know someone who has made award-worthy contributions to their organisation or the HR profession? Applications for the 2024 AHRI Awards are open until 21 June. Read more and apply here.


 

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4 ways organisations are using AI to enhance their HR processes https://www.hrmonline.com.au/artificial-intelligence/4-ways-organisations-are-using-ai-to-enhance-their-hr-processes/ https://www.hrmonline.com.au/artificial-intelligence/4-ways-organisations-are-using-ai-to-enhance-their-hr-processes/#respond Fri, 24 May 2024 06:13:17 +0000 https://www.hrmonline.com.au/?p=15325 From automated onboarding to personalised learning pathways, here’s how AI is helping HR practitioners create more supportive, dynamic and innovative workplaces.

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From automated onboarding to personalised learning pathways, here’s how AI is helping HR practitioners create more supportive, dynamic and innovative workplaces.

As organisations strive to stay competitive in an increasingly digital world, HR’s ability to leverage AI has become indispensable.

According to research by Employment Hero, 86 per cent of HR leaders in Australia and New Zealand are already using AI-powered software. The most popular areas where HR is harnessing AI’s capabilities are identifying and reporting on employee data trends (used by 40 per cent of HR leaders) and writing content such as job descriptions and employment updates (39 per cent). 

However, analysing data and drafting communications are just the tip of the iceberg when it comes to AI’s potential to revolutionise HR’s workflow.

HRM spoke with two HR leaders to understand how organisations are working with AI in creative ways to drive growth and innovation.

1. Creating an AI employee

One potential obstacle in implementing AI-powered processes is resistance from employees who see AI as complex and unapproachable, and might think they need to be subject-matter experts to use it effectively. 

To create a more positive perception of AI, HR agency HumanX introduced it in the form of an AI-generated ‘employee’ named Xai.

“Writing a policy around something that we hadn’t yet explored didn’t really make much sense for us. So, instead, we gave it a name, a personality and a job description,” says Tahnee McWhirter, Partner at HumanX.

“What that job description does is set expectations not only for how the AI tools will be used, but also how the people in our team and in our system will engage with those tools. This creates an openness for them to play and to explore with AI.”

Naming the tool also contributes to making it feel like part of the team rather than an abstract technological addition, she says. This helped to address varying levels of comfort and confidence with AI in the team. 

“We published the job description and introduced Xai to the team – we literally did an onboarding the same way that we would any other employee… it was a little tongue-in-cheek to create a level of accessibility because AI is not something that everybody is comfortable with.”

Twelve months after its implementation, after allowing for a period of experimentation, the entire team is comfortably using and experimenting with Xai.

As well as taking on repetitive, administrative tasks, Xai functions like a personal coach for employees, providing real-time feedback, information and support. 

“Say you’re an HR professional and you really want to develop your public speaking skills,” says McWhirter. “An AI tool can watch you present, give you feedback on the things that you did well, the things that you should change and areas where you need to be more concise or compelling. 

“That’s a really non-threatening way of upskilling. Instead of sitting down with your boss and having that [intimidating] feedback conversation, you have this tool that helps you get better. And you can do that live in real-time.”

Read more about how HumanX uses Xai here.

2. Understanding and using different communication styles

While generative AI tends to be associated with technical and administrative skills, employers should not overlook its capacity to enhance skills such as communication and empathy, says McWhirter. 

She recalls an instance when her team used out-of-the-box thinking with AI to enhance their communication and get a project over the line with her.

“Some of my team have identified a use for AI to understand how to better influence me as their decision maker. 

“[They were] feeding into a generative AI tool like ChatGPT examples of how I communicate – whether that’s an email, my conversation from a transcript, examples of LinkedIn posts that I’ve written – to skill AI up on my thought process and my opinion about certain relevant topics. They were then asking AI to help them draft the plan for an internal project that they wanted to get across the line.”

By absorbing this information, the software was able to create a persuasive pitch in a tone that would naturally resonate with her.

“ChatGPT inserted some humour, or it attempted to, because it identified that I like a bit of a laugh,” she says. “It was such an interesting, creative use case, and one that has had broader commercial impacts on the business because when we are pitching to potential clients, the same concept and the same methodology could be followed.”

“What’s really quite incredible about AI, and particularly generative AI, is that it [functions] at a self-paced user rhythm, which we can’t curate as an experience as HR professionals.” – Laura Stonebank, Co-Lead of Talent and Change at Accenture ANZ

3. Building customisable learning pathways

In and outside the workplace, technological advancement has had a profound impact on the way we access and absorb new information, says Laura Stonebank, Co-Lead of Talent and Change at Accenture ANZ.

“What’s interesting here is the democratisation of information and, therefore, learning being at people’s fingertips,” she says. “Between AI and social media, learning has completely changed over the past five or six years.”

Now that learning has become somewhat informalised, the amount of time and attention people are willing to dedicate to it has dwindled, she says. Accenture has kept this front-of-mind in designing new AI-driven learning pathways for its employees.

“What’s really quite incredible about AI, and particularly generative AI, is that it [functions] at a self-paced user rhythm, which we can’t curate as an experience as HR professionals,” says Stonebank.

“We can automate the generation of learning materials now. And I think while that’s a really nascent offering, it’s going to fundamentally shift from building learning materials and learning experiences, and really make it about the purpose and experience of the learner.”

Accenture’s AI-powered platform, MyLearning, serves as the home for learning and skills development within the company. It integrates a tool that continuously updates an employee’s skill profile based on their learning activities and achievements.

This dynamic approach ensures that employees receive relevant and timely learning recommendations tailored to their current skill levels and career aspirations. And, what’s more, these insights can contribute to workforce planning decisions by helping to identify skills gaps across the organisation.

“It’s allowing us access to more people with the requisite skills to get the work done for our clients,” says Stonebank. 

“It’s [also] changing HR’s executive reporting from being [purely] qualitative to being a quantitative function in the same way finance might be. AI is a hugely powerful tool to maximise all of the data at your fingertips, and then churn that data and turn it into a narrative that you can then take to the executive. It’s making us, as HR professionals, game-changers.”

4. Using an ‘HR buddy’ to manage feedback

In addition to its AI innovations in the learning and development sphere, Accenture has also rolled out a tool called ‘HR buddy’, powered by generative AI, to assist employees in a myriad of tasks. 

“It’s sort of similar to ChatGPT, or that type of AI where we can ask it a question, and it’s going to scrape all this information that sits in the back-end and come back to us with the answer that it considers to be the most appropriate,” says Stonebank.

This tool has been particularly effective in improving the way feedback is given and received, she says.

“If [someone] has got a difficult conversation to have, [they ask], ‘How do I do that?’ – and the AI can help you with an example of what you might want to say or how you might want to structure that conversation.”

The AI model is capable of retaining information about how people prefer to receive feedback, making it more inclusive of different communication styles when producing its output, she adds. 

What’s more, it has the ability to provide real-time support when difficult conversations arise suddenly or unexpectedly.

When managed correctly, resources like these give every employee access to a wealth of HR knowledge at the touch of a button, says Stonebank.

“It’s amplifying and elevating the voice of millions of HR professionals, so that everyone feels that they’ve got that support.”

How are you using AI as an HR practitioner? Let us know in the comment section.

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Accrued leave must be paid out on day of employees’ termination, Federal Court finds https://www.hrmonline.com.au/section/legal/accrued-leave-termination-federal-court/ https://www.hrmonline.com.au/section/legal/accrued-leave-termination-federal-court/#comments Mon, 20 May 2024 01:46:32 +0000 https://www.hrmonline.com.au/?p=15308 An employer has been hit with a $17K fine for delayed payment of a terminated employee's accrued annual leave, plus damages. This case sets an important precedent for employers.

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An employer has been hit with a $17K fine for delayed payment of a terminated employee’s accrued annual leave, plus damages. This case sets an important precedent for employers.

A recent Federal Court ruling has shed light on confusion about when employers are required to pay certain entitlements to an employee following their termination, including payment in lieu of notice, accrued but untaken annual leave and redundancy pay. 

The Fair Work Act (FW Act) itself does not prescribe a deadline or express time frame, aside from the general provision governing payments and frequency of salary under section 323(1) of the FW Act that requires all amounts payable to an employee to be paid in full and at least monthly. 

However, the Federal Court has recently examined the section of the FW Act governing the payment of accrued but untaken annual leave and found that it must be paid out on the day the termination took place.

The case concerned an employee who received payment of their accrued but untaken annual leave three months after their termination. The Federal Court held that this payment was three months late and in contravention of section 90(2) of the FW Act. As a result, the Court handed down a penalty of $17,000, which comprised approximately 25 per cent of the maximum applicable penalty.  

In an unusual twist, the Court also awarded $10,000 general damages to the Applicant due to the material effect the delay had on them, which resulted in distress due to the financial strain he experienced. 

Ignorance of the law is “no excuse” 

Whether an employee leaves your organisation voluntarily or if they are fired or dismissed because of redundancy, you must pay their unused annual leave.

In this case, the employer submitted that the delay in payment was due to limited knowledge of Australian employment law, and concerns about the accuracy of the leave records. 

The payment was processed once the employer was made aware that they needed to meet their obligation to pay the accrued annual leave as they had no explicit proof that the annual leave records were incorrect.  

The Court highlighted that to achieve general deterrence, a clear signal needs to be sent to the Australian community that all employers must know and understand their obligations under the FW Act and that lack of care and ignorance of the law is no excuse.  

This decision serves as a reminder to not only fulfil your obligation as an employer to know and understand the law, but, if in doubt as to whether an entitlement is payable or not, take adequate steps to investigate or seek expert advice. 

Following best-practice guidelines may not be enough to ensure compliance if you’re not up to date with case law.

As summarised by the Court, “It is not sufficient that one can have a mistaken belief and then take no steps to verify the circumstances.”  

“Following best-practice guidelines may not be enough to ensure compliance if you’re not up to date with case law.” – Michael Kriewaldt, Associate, Jewell Hancock Employment Lawyers

The legal implications 

Interestingly, this decision follows another Federal Court decision concerning paying notice upon termination. On appeal, the Court held that under section 117(2)(b) of the FW Act, payment in lieu of notice is a mandatory prerequisite to lawful termination and must be paid before the dismissal comes into effect.

It has become common practice for employers to provide payments in lieu of notice to outgoing employees after the termination date of their employment due to conflicting information available online. This decision makes it clear that to be considered a lawful termination, notice payments must not occur after the date the employment has ended.

A legal interpretation of the two Federal Court decisions suggests payment of notice and any accrued unused entitlements must be received by the outgoing employee on the day employment ends – something that’s not widely known by employers.      

These two decisions are particularly significant because they’re likely to be binding authorities for any junior courts, such as the Federal Circuit and Family Court of Australia, where the majority of termination entitlements disputes are ventilated. 

Further, it seems likely that the timing of redundancy payments would follow the same reasoning.

Ensuring compliance  

The decision to terminate an employee is generally demanding and can be challenging to enact.      

Before moving to terminate, it’s imperative to understand your obligations as set out in the FW Act and any applicable award or agreement. Non-compliance with these obligations will contravene the FW Act and may subject your organisation to pecuniary penalties. 

Employers should always practice procedural fairness when determining whether to end an employment relationship. 

The employee should receive written notice of their termination, which states the date that the dismissal will take effect from and ensure payment of any owed entitlements on termination. This includes any outstanding wages owed, notice, accrued annual leave, long service leave, the balance of any time off instead of overtime, and any redundancy pay, as applicable. 

Michael Kriewaldt is an Associate at Jewell Hancock Employment Lawyers.


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Non-compete clauses face increasing scrutiny amid calls for reform https://www.hrmonline.com.au/section/legal/non-compete-clauses-face-increasing-scrutiny/ https://www.hrmonline.com.au/section/legal/non-compete-clauses-face-increasing-scrutiny/#comments Fri, 03 May 2024 07:05:36 +0000 https://www.hrmonline.com.au/?p=15266 Non-compete clauses are in the spotlight following significant legal developments in Australia and abroad. Could it be the time of reckoning for these restraints?

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Non-compete clauses are in the spotlight following significant legal developments in Australia and abroad. Could it be the time of reckoning for these restraints?

Non-com­pete claus­es are currently under scrutiny from var­i­ous quarters.

Broad­ly speak­ing, non-com­pete claus­es are a form of post-employ­ment restraint that pro­hib­it an employ­ee from work­ing for a com­peti­tor of their pre­vi­ous employ­er for a spec­i­fied peri­od in a defined geo­graph­ic area.

The ratio­nale for non-com­pete claus­es being imposed on depart­ing employ­ees is to pro­tect the legit­i­mate busi­ness inter­ests of the for­mer employ­er, usu­al­ly con­fi­den­tial infor­ma­tion and cus­tomer rela­tion­ships. This pro­tec­tion, how­ev­er, needs to be bal­anced against the right and need of the for­mer employ­ee to ply their trade or pro­fes­sion and earn a liv­ing. 

This bal­ance is why there is a ques­tion as to the enforce­abil­i­ty of non-com­pete restraints, with courts called upon to adju­di­cate as to whether a non-com­pete restraint should be enforced against a for­mer employ­ee and, if so, to what extent (in terms of time peri­od and geo­graph­ic scope). 

A court will not enforce the restraint beyond what is rea­son­ably nec­es­sary to pro­tect the legit­i­mate busi­ness inter­ests of the for­mer employ­er seek­ing to rely upon it. As a rule of thumb, it’s usually senior employ­ees who have sig­nif­i­cant access to con­fi­den­tial infor­ma­tion and cus­tomer rela­tion­ships who may have their non-compete clauses enforced. 

As such, there can be a prop­er basis for impos­ing a non-com­pete restraint against such employ­ees, as they can dam­age the busi­ness inter­ests of the for­mer employ­er by mov­ing to a com­peti­tor. There is a real prospect a court will enforce a non-com­pete in such circumstances.

However, there is an increas­ing­ly influ­en­tial view that it may be unfair for employ­ers to impose restraints on rel­a­tive­ly junior or low­er-lev­el employ­ees who have not had access to con­fi­den­tial infor­ma­tion or cus­tomer rela­tion­ships.This unjus­ti­fi­ably keeps those employ­ees from oppor­tu­ni­ties with oth­er employ­ers, and impedes labour mar­ket mobil­i­ty. In these cir­cum­stances, a court would like­ly give any attempt by an employ­er to enforce such a restraint against a for­mer employ­ee short shrift.

Unfair dismissal case brings non-compete clause into question 

In a recent unfair dis­missal deci­sion, the Fair Work Com­mis­sion con­sid­ered the impact of a non-com­pete clause imposed on an appli­cant on his oblig­a­tion to mit­i­gate the loss from his dismissal. 

The appli­cant in this case was a sales­per­son sell­ing grout­ing and grout­ing ser­vices. The FWC addressed the issue of the non-com­pete clause and its rel­e­vance to mit­i­ga­tion of loss.

Deputy Pres­i­dent Col­man, by way of back­ground, observed:

“Sec­tion 392(2)(d) requires the Com­mis­sion to con­sid­er the efforts of the per­son to mit­i­gate the loss suf­fered as a result of the dis­missal. [the applicant] said that he had applied for hun­dreds of jobs on ​‘Seek’, includ­ing sales jobs, in which he had a lot of expe­ri­ence. How­ev­er, he said that he had not applied for jobs in the same sec­tor as his pre­vi­ous work, because of the pres­ence of a post-employ­ment restraint pro­vi­sion in his con­tract of employ­ment (clause 10.1). 

“This stat­ed that for a peri­od of 12 months after the ter­mi­na­tion of his con­tract of employ­ment, [he] was not to work as an employ­ee or con­trac­tor or advi­sor or in any oth­er capac­i­ty in any busi­ness which was ​‘engaged in activ­i­ties sub­stan­tial­ly sim­i­lar or iden­ti­cal to the Com­pa­ny and pro­vides ser­vices sub­stan­tial­ly sim­i­lar or ser­vices offered by the Company.’”

Deputy Pres­i­dent Col­man then pro­vid­ed com­men­tary on the restraint, rel­e­vant to the appli­cant but also of inter­est more broad­ly on the issue of post-employ­ment restraints imposed on ​‘ordi­nary’ workers:

“One won­ders why such restraint of trade pro­vi­sions are so com­mon­ly found in the con­tracts of ordi­nary work­ers and whether they real­ly pro­tect any legit­i­mate busi­ness inter­est of the employ­er, or mere­ly serve to fet­ter the abil­i­ty of work­ers to ply their trade, and to reduce com­pe­ti­tion for labour and ser­vices.

Ordi­nar­i­ly, one would expect a per­son to have applied for jobs in the sec­tor of their exper­tise as a rea­son­able step in mit­i­gat­ing loss. How the pres­ence of a non-com­pete pro­vi­sion in his con­tract explains [the applicant’s] deci­sion not to do so.

“A court will not enforce the restraint beyond what is rea­son­ably nec­es­sary to pro­tect the legit­i­mate busi­ness inter­ests of the for­mer employ­er.”

Although the pro­vi­sion is most like­ly unen­force­able on the basis that its scope is unrea­son­able, an ordi­nary work­er can­not be expect­ed to know this, and it is under­stand­able that [the applicant] would not want to risk embroil­ing him­self in a legal con­tro­ver­sy by act­ing con­trary to an express pro­vi­sion in his con­tract.”

As a result, the FWC refused to reduce the amount of compensation awarded to the applicant for unfair dismissal.

This decision highlights the disconnect between legal principles for non-compete clauses and how many employers enforce these restrictions on employees, regardless of whether they had enough access to confidential information or customer relationships to justify the restrictions.

This sit­u­a­tion often aris­es from employ­ers using pro for­ma employ­ment agree­ments which con­tain, as part of their stan­dard terms, post-employ­ment restraints such as non-com­pete and non-solic­it claus­es. 

Often lit­tle thought or con­sid­er­a­tion is giv­en to whether to include the post-employ­ment restraints or to their ulti­mate enforce­abil­i­ty if test­ed. Indeed, there may be no inten­tion on the part of the employ­er to ever enforce the restraints. 

Of course, employ­ees are not to know this – as far as they are con­cerned there is a post-employ­ment restraint in their con­tract and, as Deputy Pres­i­dent Col­man observed, they may not want to be poten­tial­ly drawn into a legal dis­pute with a for­mer employ­er and so com­ply with the restraint, even if the employ­er had no inten­tion of enforc­ing it. 

Reviews of non-competes in the USA and Australia

This deci­sion comes at a time when post-employ­ment restraints are under review, both in Aus­tralia and the USA. 

In the USA, the Fed­er­al Trade Com­mis­sion (FTC) has tak­en the dras­tic step of ban­ning non-com­pete claus­es in employ­ment con­tracts com­plete­ly. 

Only exist­ing non-com­pete claus­es for senior exec­u­tives (a cohort of less than 0.75 per cent of work­ers in the US) will con­tin­ue to be enforce­able. Moving forward, there can be no new non-com­pete restraints for any employ­ees, includ­ing senior executives. 

In Aus­tralia, the Com­pe­ti­tion Review Task­force is present­ly exam­in­ing non-com­pete claus­es and var­i­ous oth­er form of employ­ment restraints, with sub­mis­sions being sought. 

The Issues Paper released by the Com­pe­ti­tion Review Task­force pro­vides this summary:

“Sev­er­al issues have been iden­ti­fied relat­ing to the use and impact of non-com­pete claus­es. Many issues iden­ti­fied in empir­i­cal analy­sis have been affirmed as prac­ti­cal issues affect­ing Aus­tralia today through the Com­pe­ti­tion Review Taskforce’s ear­ly engage­ment, and include con­cerns about:

  • The ​“chill­ing effect” of restraint claus­es on work­er mobil­i­ty, par­tic­u­lar­ly among low­er-income work­ers, to choose bet­ter-pay­ing jobs, and the abil­i­ty for busi­ness­es to start up, recruit tal­ent and grow.
  • The high cost of lit­i­ga­tion, the lack of clear guid­ance and ​‘bright line’ rules, and the use of cas­cad­ing claus­es or the ​‘blue pen­cil test’, which can leave both work­ers and busi­ness­es with an unclear under­stand­ing whether an agreed restraint will be upheld as rea­son­able and enforce­able.
  • The eco­nom­ic con­se­quences of poten­tial­ly inef­fi­cient allo­ca­tion of labour and infor­ma­tion, which may be ham­per­ing pro­duc­tiv­i­ty growth and innovation.”

These are rea­son­able con­cerns, but they can be addressed with­out ban­ning non-com­pete claus­es alto­geth­er. 

In deter­min­ing the enforce­abil­i­ty of such restraints, the courts, through prin­ci­ples devel­oped over decades of judi­cial con­sid­er­a­tion, care­ful­ly endeav­our to ensure an appro­pri­ate bal­ance is struck between the right of employ­ers to pro­tect their legit­i­mate busi­ness inter­ests and the right of employ­ees to change posi­tions and earn a liv­ing. 

Do you think non-compete clauses should be banned? Let us know in the comment section.

Michael Byrnes is a Partner at Swaab. A version of this article first appeared on Swaab’s website. You can view the original here.


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How to tell the difference between a contractor and an employee https://www.hrmonline.com.au/section/legal/how-to-tell-the-difference-between-a-contractor-and-an-employee/ https://www.hrmonline.com.au/section/legal/how-to-tell-the-difference-between-a-contractor-and-an-employee/#comments Wed, 17 Apr 2024 06:23:22 +0000 https://www.hrmonline.com.au/?p=15213 Federal legislation passed in February creates a statutory definition of the employer-employee relationship – and it’s imperative that HR professionals review relevant contracts and working relationships sooner rather than later.

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Federal legislation passed in February creates a statutory definition of the employer-employee relationship – and it’s imperative that HR professionals review relevant contracts and working relationships sooner rather than later.

Under new federal laws, our understanding of the distinction between an independent contractor and an employee is changing.

Passed on 12 February – and coming into effect in the first and second half of 2024, and in early 2025 – the Fair Work Legislation Amendment (Closing Loopholes No. 2) Bill 2023 introduces statutory guidance for defining the relationship between an employer and a worker. 

This guidance states that the relationship should be determined by ascertaining the “real substance, practical reality and true nature of the relationship”.

In other words, explains David Sigler, Senior Associate, Koffels Solicitors and Barristers, “To determine whether a worker is an independent contractor or an employee, regard must be had to the totality of the relationship between the parties. 

“[This] means a multifactorial test will apply,” says Sigler.

  • Factors include, but are not limited to: 
  • Who controls the work performed, and how it is performed.
  • Where financial responsibility and risk lies. 
  • Who supplies the tools and equipment.
  • The worker’s ability to delegate or subcontract the work.
  • Whether the worker is engaged by other businesses.
  • The expected work hours.
  • The expectation of work continuing.

The multifactorial test is not new. Rather, it was usually applied by courts until 2022 – when, in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2, the High Court of Australia determined that where a contract exists, the employer-worker relationship should be determined by that contract – and that the multifactorial test should only apply in the absence of a contract. 

Under the new law, the practical reality of the working relationship should always be considered, whether there’s a contract or not.

What might these changes mean in practice? In short, an employer can no longer simply point to a contract to prove that a worker should be considered a contractor rather than an employee. 

Instead, it is necessary to assess the relationship holistically, considering the factors listed earlier, as well as others, such as those listed below:

 

In doing so, it’s important not to rely on any single factor. 

“The test doesn’t place any one, or other, indicia as completely indicative of the relationship,” says James True, Practice Group Leader, Employment Law, LegalVision. “All indicia need to be weighed in making the determination.” 

An example in action

Practically applying the factors can be somewhat challenging, given there is yet to be a case decided under the new laws. However, previous cases can provide some guidance for HR professionals and employers. 

In one such case, a worker was engaged as a tiler/grouter with a company from May 2022 to June 2023. There was no written contract. The worker argued she was an employee, while the company said she was a contractor.

The FWC, in applying the multifactorial test, agreed that the worker was an employee due to a range of factors. First, she did not work for other businesses, and therefore did not carry on a trade or business of her own. 

“Where [the worker] exclusively works for the principal or employer, this can indicate employment,” says True.

The fact that the worker submitted an ABN, provided invoices and was responsible for taxation were considered as potentially indicative of an independent contractor relationship, but “not strong reflections of the reality of the working relationship”.

Second, when it came to assessing the level and nature of control over the work performed, the FWC held that the worker could not freely refuse work. This conclusion was based on messages between her and the employer, including the following exchange: 

Worker: Can I please have a day off tomorrow? 

Her manager: [Expletive], you cannot take a day off. [ADDRESS REDACTED], Go there and roll the glue.

Further, the worker, in performing tasks set by the employer, was required to follow instructions, and did not control her hours, nor how she completed the work.

“Where controls exist [on the employer’s part], it’s indicative of an employment relationship,” says True. 

Third, even though the worker supplied tools and equipment, in that she bought the materials needed to perform the job, these purchases took place according to the employer’s instructions. 

“Typically, an independent contractor would have their own tools of trade.”

The FWC emphasised that the outcome of the multifactorial test should be determined “on balance and considering the totality of the evidence”. 

How can HR prepare?

The first step for HR is to review existing engagements with independent contractors.

“[When] the legislation comes into effect, it will be necessary to ensure that the entire relationship between the parties is considered – in other words, the multifactorial test is applied – to determine whether the relationship has been appropriately characterised,” says True. 

It won’t be enough to consider the contract only. HR must look at how the relationship operates practically.

“Where controls exist [on the employer’s part], it’s indicative of an employment relationship.” – James True, Practice Group Leader, Employment Law, LegalVision

If it emerges that, despite a contract, an arrangement resembles an employer-employee relationship, then the employer should make adjustments to ensure the worker receives appropriate entitlements and rights, such as general protections.

“Where [a relationship] hasn’t [been appropriately characterised], there can be exposure to back-payment claims of employment entitlements or penalties for sham contracting,” says True.

Template contracts should be examined particularly thoroughly to ensure there are no unfair contract terms. Terms that could introduce risk might include paying a contractor less than an employee for the same work, placing restrictions on the contractor or insisting on unreasonable working hours. 

In addition, HR should be aware that high earners who are already contracted can choose to retain contractor status. 

“Existing independent contractors who earn more than the contractor high income threshold may opt out of becoming employees,” says Sigler. 

“The contractor high income threshold has not been set, and it may be the same as the employee high income threshold, which is $167,500.”

Finally, it should be noted that the changes won’t apply to businesses that are only “national system employers” due to a state’s referral of powers to the Commonwealth. For these businesses, the cases decided by the High Court in 2022 will still apply.

With just months to go before the new laws are implemented, it’s time for HR to take the bull by the horns and get in early. 

This will optimise employer-worker relationships and ensure that all workers – be they contractors or employees – receive the legal rights and remuneration due to them.

This article originally appeared in the April-May 2024 edition of HRM Magazine.


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Employer ordered to pay $4 million in penalties for “calculated” wage theft https://www.hrmonline.com.au/section/legal/employer-ordered-to-pay-4-million-in-penalties-for-calculated-wage-theft/ https://www.hrmonline.com.au/section/legal/employer-ordered-to-pay-4-million-in-penalties-for-calculated-wage-theft/#comments Mon, 15 Apr 2024 04:21:14 +0000 https://www.hrmonline.com.au/?p=15205 The Federal Court has imposed over $4 million in penalties against an employer for “deceitful and unscrupulous” wage theft. With the criminalisation of wage theft looming, now is the time to put legal safeguards in place to reduce underpayment risks.

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The Federal Court has imposed over $4 million in penalties against an employer for “deceitful and unscrupulous” wage theft. With the criminalisation of wage theft looming, now is the time to put legal safeguards in place to reduce underpayment risks.

In a ruling announced last week, the Federal Court of Australia has imposed over $4 million in penalties on a restaurant chain and two of its former officials for systemic wage theft and falsification of records. 

The offences, brought forward by the Fair Work Ombudsman (FWO), involved deliberately underpaying 17 employees, most of whom were migrant workers predominantly from Indonesia and China, a total of $157,025.

The underpayments, which occurred between November 2017 and June 2018, involved casual and full-time employees across multiple locations in Sydney and Melbourne.

The penalties imposed included $1.99 million against the restaurant, $1.89 million against the third-party company who employed the workers at the store, $92,232 against the former general manager and $105,084 against the former HR coordinator. 

These fines represent the second-highest penalties ever secured by the FWO. 

In addition to paying the fine, the organisation was also ordered to back-pay the underpaid employees in full, plus interest and superannuation.

The Federal Court’s ruling is particularly significant in light of the potential introduction of new wage theft laws in Australia, announced by the government last year as part of the Closing Loopholes Bill. 

Read more about the legislative changes coming from the Closing Loopholes Bill here.

Pending the passing of the new legislation, which could come into effect as soon as 1 January 2025, instances of deliberate underpayments such as this one could soon result in jail time for perpetrators.

“This is the exact sort of matter that the provisions to criminalise intentional wage theft under Closing Loopholes are aimed at addressing,” says Emma Lutwyche, Special Counsel at Pinsent Masons.

“It certainly demonstrates that these issues are being taken extremely seriously, and will be taken extremely seriously going forward.”

What constitutes intentional wage theft?

The high penalties imposed on the employer in this case were related not only to the extent of the underpayments, which varied by worker from $2,165 to $50,588, but by the “calculated” way the former general manager and former HR coordinator oversaw them.

The Court labelled the behaviour of the involved parties as “deceitful and unscrupulous,” highlighting that they not only deprived employees of their rightful wages, but also attempted to hide their misconduct by providing false records to inspectors, which understated hours worked and included false rates of pay for casual employees.

“The laws are very clear on applying the criminal standard of intentionality,” says Lutwyche.

“Even things like willful blindness, neglect or failure to conduct due diligence probably won’t be enough [to be classified as deliberate wage theft]. It has to be at an intentional level, like what we’ve seen in this case.”

“Hiding behind a corporation isn’t going to be enough anymore. The regulators are regularly looking at who is the controlling mind behind [wage theft].” – Emma Lutwyche, Special Counsel, Pinsent Masons

The penalties imposed were also influenced by the vulnerable nature of the workers involved.

Since many of the underpaid workers were migrant workers on a casual basis and/or under 26 years old, the employer was penalised under Australia’s Protecting Vulnerable Workers laws. Under these laws, the maximum penalties for serious contraventions are 10 times the penalties which would ordinarily apply.

The heavy individual fines imposed on the perpetrators of these offences are an important reminder to employers of personal culpability in cases like these, says Lutwyche.

“Hiding behind a corporation isn’t going to be enough anymore. The regulators are regularly looking at who is the controlling mind behind wage theft, and how to ensure that person doesn’t go and do a similar thing with another corporation somewhere else.”

Preparing for new wage theft laws to take effect

With the potential criminalisation of wage theft on the horizon, cases like this serve as a warning to HR to double down on compliance to avoid the risk of prosecution.

To prevent cases of unintentional wage theft slipping through the cracks, HR should be attuned to both their legal requirements and the effectiveness of their systems, says Lutwyche.

“You need to be applying your consideration to which awards apply on a regular basis, whether your classifications are correct, and whether your payroll system is correctly applying the pay rules that come from the relevant awards,” she says. 

“Making sure that, as a business, you’re recording that you are turning your mind to these issues is really important.”

If instances of accidental underpayment are identified, failure to address it promptly could result in it being classified as a deliberate act of wage theft. As a result, underpayments should be remedied in a timely and transparent manner, she says.

“You should be notifying the regulator that it’s happened and that you addressed it. Because the other thing that’s part of the criminalisation of wage theft, and the current wage theft regime, is that cooperation with the regulator will avoid things getting worse.”

By taking these steps now, employers can stay ahead of the legal curve and avoid the costly penalties associated with wage theft.


Need help brushing up on HR laws and compliance? AHRI’s short course will give you an understanding of the key elements of legislation, regulation and practices HR needs to be across.


 

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When are overseas employees eligible for general protections? https://www.hrmonline.com.au/section/featured/overseas-employee-eligible-for-general-protections/ https://www.hrmonline.com.au/section/featured/overseas-employee-eligible-for-general-protections/#respond Wed, 10 Apr 2024 01:21:21 +0000 https://www.hrmonline.com.au/?p=15197 A recent FWC ruling provides important lessons for recruiters on essential legal considerations when engaging global talent.

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A recent FWC ruling provides important lessons for recruiters on essential legal considerations when engaging global talent.

Hiring talent across international borders introduces a myriad of potential legal complications for HR. Staying on top of Australia’s evolving legislative landscape can be challenging enough – when new jurisdictional layers are added to the equation, ensuring compliance becomes even more daunting.

For instance, imagine a case where an Australian company employed a US citizen, born in India, to work in Argentina. Which jurisdictional laws might apply to them? Would they technically be an Australian-based employee? 

This scenario might sound outlandish, but, in fact, this was a genuine legal dilemma recently dealt with by the Fair Work Commission (FWC).

The dispute was brought forward by a former employee of a lithium mine in Argentina, which was owned and operated by a Sydney-based company. After being dismissed from the mine in January last year, the employee filed a general protections claim with the FWC. 

In response, his employer raised a jurisdictional objection, claiming he had been “engaged outside Australia, to perform duties outside Australia, and was therefore not an Australian-based employee”.

The debate largely centred around where the contract was formed: was it at the physical location of the employee at the time of signing the offer, or the company’s registered address in Sydney to which the signed offer was emailed?

Was the employee Australian-based?

In order to be entitled to the general protections afforded by the Fair Work Act 2009, employees need to fall under the Act’s definition of an “Australian-based employee”; namely, an employee:

(a) whose primary place of work is in Australia; or

(b) who is employed by an Australian employer (whether the employee is located in Australia or elsewhere); or

(c) who is prescribed by the regulations.

However, the Act stipulates an exception to this in cases where an employee is “is engaged outside Australia and the external Territories to perform duties outside Australia and the external Territories”.

This exception formed the crux of the employer’s argument that the employee was not Australian-based, given he had been outside Australia when he signed his employment contract.

“In this case, the employer probably thought they had pretty good prospects, given that they had an Indian-born US citizen, who was recruited overseas, had never stepped foot in Australia, and was recruited to work on an Argentinian project,” says Charles Power, Partner and National Practice Chair of the Workplace Relations and Safety Group at Holding Redlich.

“[However], it’s a basic principle of contract law that the acceptance of an offer isn’t effective until it’s communicated to the person or entity that made the offer.”

In this instance, as the entity was based in Australia when it received his signed contract, the employment relationship had officially started on Australian soil. 

“In most cases, it will cost the employer less to settle the claim than to contest the jurisdiction on technical grounds.” – Charles Power, Partner and National Practice Chair of the Workplace Relations and Safety Group at Holding Redlich

There is an exception to this rule called the “postal rule”, he says, where acceptance of an offer is established at the moment of sending a contract by post, rather than when the acceptance is received by the employer. However, the FWC found no good reason to apply the postal rule in this case where the communication of the accepted offer was instantaneous by email. 

As a result, it found that the worker was an Australian-based employee, employed by an Australian employer and engaged in Australia, and thus rejected the company’s jurisdictional objection. The employee is now free to proceed with the general protections claim.

“I think the case shows the risks in challenging the jurisdiction of the Commission when it comes to dismissal disputes, whether they be unfair dismissal claims or general protections claims,” says Power.

“In most cases, it will cost the employer less to settle the claim than to contest the jurisdiction on technical grounds. You want to have good reasons and to have considered your situation carefully before you embark on a jurisdictional challenge.”

Legal considerations when hiring global talent

For employers engaging or hoping to engage global talent, navigating the legal and jurisdictional complexities of the process can seem like an intimidating task.

In a recent informal poll of AHRI’s LinkedIn audience, which surveyed over 100 AHRI members, legal compliance was voted the number-one challenge in managing a global workforce (cited by 44 per cent of respondents), followed by managing cultural expectations (23 per cent). 

However, in the current skills landscape, the opportunities provided by global talent are growing harder to overlook. 

According to data from Jobs and Skills Australia, more than one in three occupations assessed were in national shortage (36 per cent) in 2023. This marks an increase of 5 percentage points compared to 2022.

In the age of remote and hybrid work, many employers are more set up to hire global talent than ever before. However, according to Power, workplace law has yet to catch up with the shift towards borderless workforces.

“The common law is very slow to evolve,” he says. “While, inevitably, as a result of increasing globalisation, there is an increasing convergence around what international labour law is, a lot of that’s often not reflected in laws in a domestic jurisdiction.”

As a result, it’s important for employers to ensure their employment contracts contain the right provisions to cover their backs in cases like this. 

“Ideally, the contract itself would specify where the employer’s place of business is, so there’s no doubt about that,” says Power. “It should also specify which laws govern the employment relationship that it regulates.”

Whether or not a global employee is subject to local entitlements, such as paid leave or termination rights, as well as Australian entitlements, will depend on the location of the employee and the nature of the organisation. As a result, it’s advisable to seek advice from a local third party about whether they are covered by the local law.  

“Sometimes, I’ve [also] seen provisions that deal with services for employees to get tax advice, because you need to turn your mind to whether or not superannuation contributions need to be made when they’re overseas, and what kind of income protection insurance applies for work-related injuries,” says Power.

To simplify the process, employers might consider using an Employer of Record – a third-party company operating in the global employee’s local jurisdiction which hires workers on behalf of your company and takes on legal responsibility for aspects such as payroll, tax and more.

By carefully considering these factors before engaging overseas employees, HR and recruiters can open up their organisations to the massive skills potential of a borderless workforce while minimising the legal risks attached to it.


Need help brushing up on HR laws and compliance? AHRI’s short course will give you an understanding of the key elements of legislation, regulation and practices HR needs to be across.


 

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Busting 4 myths about the Right to Disconnect legislation https://www.hrmonline.com.au/section/legal/4-myths-right-to-disconnect-legislation/ https://www.hrmonline.com.au/section/legal/4-myths-right-to-disconnect-legislation/#comments Tue, 09 Apr 2024 06:43:44 +0000 https://www.hrmonline.com.au/?p=15194 With the Right to Disconnect legislation set to be implemented in just a few months' time, an expert on the matter clears up some common misconceptions about what the changes will mean for businesses.

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With the Right to Disconnect legislation set to be implemented in just a few months’ time, an expert on the matter clears up some common misconceptions about what the changes will mean for businesses.

As of 26 August this year, a new Right to Disconnect entitlement will be added to the Fair Work Act. 

For small businesses (those with less than 15 employees), the legislation will come into effect in August 2025.

However, for all other businesses, there are just a few months left to ensure your processes are compliant and in line with the new legislation.

Below, HRM speaks with expert Dr Gabrielle Golding, Senior Lecturer at Adelaide Law School, about some common myths about this new legislation and easy steps employers can take to prepare.

Myth #1: Employers can no longer contact employees after official work hours

In some instances, the narrative around the Right to Disconnect legislation has been that employers will no longer be able to contact employees out of hours, but that’s not necessarily true.

While it’s certainly best practice for employers to avoid sending a barrage of emails at 10pm, this new rule doesn’t mean employers will be penalised for accidentally hitting ‘send’ instead of ‘schedule’ on an email.

“It’s not like there’s a penalty for someone who sends an email out of normal working hours. It just means the employee carries the right not to respond. And if they exercise that right, they can’t be penalised for it,” says Dr Golding.

Employers will still be able to exercise “managerial prerogative”, she says, meaning there will be instances where it’s reasonable for them to contact employees out of hours and expect a response.

For example, the Fair Work Commission (FWC) may deem it ‘reasonable’ to expect a response from the employee if they’re on call or have a specific provision in their employment contract that extends their employment hours.

“Provided they are compensated appropriately for that,” she says.

Employers may also contact employees out of hours to discuss changes to shift times or any other operational notices that can’t wait until the following work day, such as notice of an office closure. The Right to Disconnect legislation itself sets out matters to be taken into account when determining reasonableness.

Myth #2: This rule only extends to employers

The Right to Disconnect not only encompasses communication between an employer and employee – it also includes communication from third parties.

“That could be a client or customer of the business in which the employee is working. Essentially, it’s the exact same right for the employee to be able to disconnect or not respond to that communication outside their normal working hours,” says Dr Golding.

This will be important to note for employers who provide services to clients and customers. It might be wise to consider communicating with  these third parties ahead of the legislation taking effect so they know what to expect. 

This may be especially important for those working with global clients or customers who may not be across legislative changes in Australia.

Myth #3: Only employees can raise a dispute

A dispute can be raised by either an employee or an employer, says Dr Golding.

“It could be something like the employee raising concern that perhaps they haven’t been afforded the Right to Disconnect or they’ve been treated adversely because of exercising [that right].

“An employer could similarly raise a dispute. They might say something like, ‘You’ve been incorrectly exercising a Right to Disconnect when, in actual fact, you’re required to respond to these kinds of communications because you’re on call,’ for example.”

The resolution process will look similar to any other workplace dispute, says Dr Golding.

“The first step happens at a workplace level with a conversation between the employer and the employee. The Act mandates that this happens first and I would hope the dispute is resolved [at this level].”

If it’s not resolved, one of the parties can bring an application for a stop order to the FWC, such as would happen in the case of a stop bullying order.

“That could be either that the employer stops engaging in contact or conduct that potentially infringes the Right to Disconnect or, on the flip side, that the employee ceases engaging in activity that’s not akin to the Right to Disconnect. Perhaps that’s ignoring calls when they shouldn’t be. And then, at that point, the FWC will have to decide whether or not to grant a stop order.”

If an order is granted, and the behaviour is continued from either party, that’s when civil penalties could come into effect for employers or disciplinary actions for employees. 

“It’s not like there’s a penalty for someone who sends an email out of normal working hours. It just means the employee carries the right not to respond.” –  Dr Gabrielle Golding, Senior Lecturer, Adelaide Law School

The maximum penalty for employers who breach a stop order is $18,784 for an individual per contravention and $93,900 per contravention for a company or employer.

“So, if there are a few employees with a few stop orders, the potential penalty amounts are quite high. That should be quite a significant deterrent for employers.”

Importantly, even when a stop order is in place, that doesn’t mean employees can’t file another application under the Work Health and Safety legislation, says Dr Golding.

“There’s a lot more being written about now in terms of codes of practice around psychosocial hazards at work. And so an employee could, alongside an application like this, make an application for a breach of the Work Health and Safety Act to say that in continually contacting them or expecting responses, the employer has breached their duty of care.”

Another thing to consider is the discrimination legislation that protects employees from being treated differently should they exercise their Right to Disconnect.

“Any infringement of that could result in an adverse action claim,” she says.

Myth #4: It will mean the end of flexibility

Since the Right to Disconnect legislation was first floated, many groups claimed it was too prescriptive and could mean a step back for flexible work practices. 

Instead, some want to see disconnection agreements made at an organisational level to account for the unique nature of different work environments.

In fact, AHRI’s December Quarter 2023 Work Outlook report found that four in 10 employers have already implemented such policies in their workplaces.

Read a case study about how Victoria Police implemented a Right to Disconnect.

However, Dr Golding believes this legislation can co-exist with our steps towards a more flexible working future.

“One doesn’t cancel out the other; the two need to operate alongside one another.

“What I’ve found in my research is that working flexibly is great up until a particular point, at which you might then be infringing on the ability to disconnect because of the flexibility that’s been afforded to you. So there’s got to be a limit on it.

“There has been a bit said… about the fact that this will set women back if they’re in caring roles, for example.”

But this legislation isn’t restricting anyone who chooses to work in the evening or on weekends to account for flexibility afforded elsewhere in their week to, say, pick up children or care for elderly parents. It simply means utilising the ‘schedule message’ function so their preferred working hours don’t interrupt someone’s preferred down time.

“I have read some articles in the media that suggest allowing employees to disconnect means they’ll become less productive – that they won’t be punching out as many outputs, for example, and KPIs will start to drop. But [some] research suggests that just simply isn’t true. That in fact, you get more efficiency out of people.

“For us here at the law school, we’ve got a Right to Disconnect guideline that we work by and we’ve got a lot of people who work flexibly. We just have agreed-on communication hours, so we will email between ourselves as staff, and with our students, between the hours of 8:30am and 5:30pm on weekdays, excluding public holidays, and that has worked fine.”

How can your business prepare?

Dr Golding suggests employers start by doing an audit of current work hours and communication needs.

“For example, do you have employees working overseas or remotely who work at odd hours? Underpinning that, it’s important to understand what the normal working hours of your employees are. Be clear on that and then generate a policy document around the Right to Disconnect. 

“That would be very helpful to get on the front foot, so employees are clear on what it means to exercise their Right to Disconnect, and also what it doesn’t mean. [This way] they don’t risk potential recourse from their employer for exercising a right as they see it, but it isn’t actually in reality.”

Other steps she suggests considering include:

  • Creating a process for on-call allowances and overtime pay for the instances that require employees to be contacted out of hours.
  • Identifying what might constitute reasonable out-of-hours communications, such as needing to change shift times or communicate about work locations, for example.
  • Making sure managers lead by example. They need to model the right behaviours in their own habits around emails and phone calls out of hours and outline communication guidelines to clients and customers.

“[Out-of-hours-communication] has become part and parcel of the way work has been done, especially since the pandemic. So to break those habits, it’s going to take some time and reflection on how communication practices occur.”


Want to take your employment law skills to the next level? AHRI’s Advanced HR Law short course is grounded in practical, expert insights to help you navigate Australia’s complex employment law landscape.


 

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