One of the most common phrases we hear, as Workplace Lawyers, is ‘I just want to do the right thing by my staff’. Most employers want to look after their staff, and want to make sure that they are paying them correctly.
Many employers think paying their staff over their award wage rate is enough.
This assumption puts employers at risk.
We continually see employers agree verbally, or by assumption, with their employees that they will ‘bundle’ all of their entitlements, such as leave loading, allowances or overtime, into one ‘flat rate’.
Often they are doing this believing that everything is fine – and, while the employment relationship is going well, it may be.
The problem often arises when the employment relationship turns sour.
…Your employee is not meeting performance standards and you are considering terminating their employment?
…Your employee is unhappy with their pay review?
…Your business is not doing so well, you need to make people redundant?
Your disgruntled employees, unfortunately, can take advantage of the fact that your ‘agreement’ is not in writing. Even though you are paying them more than their award, they may successfully claim ‘unpaid’ entitlements.
The Courts have found that even in circumstances where it is obvious that the employer was trying to do the right thing, the employer has been liable for ‘unpaid’ entitlements and been issued with penalties.
We have protected many employers from this risk by preparing written contracts and individual flexibility agreements which comply with the Fair Work Act giving clarity and peace of mind, ensuring they are ‘doing the right thing’ by their employees.
For further information, please contact the Workplace Law Team.