The recent election of the Labor government is likely to lead to significant employment and industrial relations changes. With the new government, I anticipate several large scale changes that have the potential to occur quickly and will affect anyone who is employing staff, including farmers.
In this climate, it is incredibly important that farmers have a handle on their HR before changes come into place. The Labor Party has proposed two key changes I believe farmers should be aware of; the criminalisation of wage theft and the potential overhaul of the Fair Work Act (2009).
The Labor Party have made it clear they plan on criminalising wage theft. This means that business owners who underpay their employees or incorrectly calculate employee entitlements could face jail time on top of fines and penalties.
While it is not yet clear if accidental or deliberate wage theft will be criminalised, it is clear that underpaying employees will have more serious consequences from now on. It is highly likely that in these cases ignorance will not be bliss and long term pay issues will be reprimanded even if unintentional.
This poses a huge risk to farmers, who may not intentionally underpay employees, but due to the nature of agricultural and seasonal work, need to account for several employee entitlements. Farmers are at risk of underpaying employees by applying the wrong award, incorrectly classifying employee levels, misclassifying casual employees or contractors, or incorrectly calculating flat rates.
Another significant change Labor has proposed is the redrafting of the Fair Work Act (2009). Modern Awards have been reasonably stable, and Australia has been operating under Fair Work Act (2009) for some time, so any changes are likely to have a large scale impact on businesses. This has the potential to result in changes to areas such as leave entitlements, rules around casual employment and the definition and engagement of contractors.
What can you do to protect your business?
To protect your farm from the penalties of wage theft you must have employment contracts for all of your employees as well as Individual Flexibility Agreements (IFA) for employees being paid a flat rate. IFAs act to change the clauses of an Award so that employees are paid a flat rate for all hours worked, which accurately accounts for the entitlements they would’ve received under the Award.
It is also crucial that businesses run a better off overall test (BOOT) every year to ensure their employee’s work patterns are accurately reflected in the calculation of flat rates. ProcessWorx has extensive experience providing contracts, IFAs and BOOTs for businesses in the agricultural industry and can help you remain compliant.
To protect your business from ongoing changes, it is important to ensure your broader HR system is compliant and remains so. With the demands farmers face it is nearly impossible to keep up with such rapid legislative change, that’s where ProcessWorx comes in. We ensure our Agri HR package is always compliant with legislation and alert our clients when changes occur. Our HR package also includes contracts, IFAs and BOOT to ensure you are paying your people correctly.
If you need assistance reviewing your Farm HR or have other questions, please contact the ProcessWorx HR consultants on (08) 9316 9896. Our friendly expert team will be happy to help you.
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Originally Written for Farm Weekly Magazine June Edition
