A. CONTRACTS

1. Implied terms

Every employment relationship involves a contract between an employer and an employee. This contract may be verbal or in writing or may sometimes involve a mix of the two.It is not necessary to specifically agree on the terms of a contract for one to exist.The fact that an employee starts work for an employer brings with it certain fundamental implied terms, such as the right to payment for work performed and a duty of mutual trust and confidence. In summary, employers have a duty:

1. To provide the employee with the opportunity to earn wages by providing work;
2. To allow the employee to perform their work;
3. To provide, as far as practical, a safe workplace (although note strict requirements under workplace health and safety legislation, e.g, the Workplace Health and Safety Act 1995 (Qld));
4. Not to conduct themselves in a manner likely to destroy or seriously damage the relationship of confidence and trust between the employer and the employee; and
5. To treat people with respect and not berate them or damage their reputation.

Employees have a duty:

1. To obey reasonable and lawful orders and to be co-operative;
2. To be ready, willing and able to perform work;
3. To use skill and care in their work;
4. Of fidelity (honesty), confidentiality and good faith; and
5. To perform their job safely.

2. Written contracts

The inherent difficulty with verbal contracts or relying on implied terms (in cases where there is no specific written agreement or only a limited verbal agreement) is that there can be later disagreement about what was agreed in the first place. This is why a written contract is always preferable. The contract should set out the main terms of the employment and be signed by both the employer and the employee. Whilst agreements are subject to minimum legislative entitlements and any applicable award or collective agreement requirements, there is a large range of matters which should still be covered, such as:

It is also common practice for statutory entitlements to be repeated in a common law contract for the sake of completeness.

It is worthwhile to invest some time and money in the preparation of employment contracts that suit your business needs and reflect each individual position. Efforts at this stage may reap significant dividends later in the employment relationship. It should go without saying that an employment contract should be finalised and signed by both parties before a new employee starts work. It may be much more difficult to get a current employee to sign a contract because at this point, terms and conditions of employment cannot be changed without the agreement of both parties and an employee may feel threatened by an attempt to implement a written employment contract after they have been working for some time.

Any formal employment contract must take into account legislated minimum rights and entitlements and any award or collective agreement requirements. See minimum rights and entitlements

Some employers may say, “I haven’t got the time or the money to worry about employment contracts now. I will do it when I have the time/money”. This is a potentially risky commercial decision which may turn out to be a false economy. For example:

It is wise to have formal agreements for all employed positions, even for part time and casual and what you may consider to be fairly lowly positions. Even a simple letter of appointment is better than just relying on award provisions or implied terms. It is also good practice to review employment agreements every year or two to ensure they reflect the current requirements of the role being carried out by the employee.

In the downloads section of this website, you will find some simple agreements to give you an idea of what should be contained in a basic contract:

3. Position descriptions

Hand in hand with a good contract goes a good position description. A detailed position description setting out required tasks and performance benchmarks which is reviewed on a regular basis will go a long way to managing both yours and the employee’s expectations of a role.

B. COLLECTIVE AGREEMENTS

1. What are they?

The legal position is that basic employment rights and entitlements contained in the federal Workplace Relations Act and state industrial relations legislation take precedence over the contents of an existing award or common law agreement. However, WorkChoices makes provision for several different types of employer/employee agreements (which must be registered with the Workplace Authority at a federal level or approved by state industrial relations commissions).

An employee collective agreement is essentially a written agreement, made between the employer and a group of employees, which may be made with or without the involvement of a bargaining agent. The agreement overrides any terms and conditions of any relevant award and the legal requirement is that the terms of the agreement are, on balance, no less favourable than those contained in the applicable or benchmark award. They perform a similar role to awards in that they regulate various aspects of employment arrangements. The primary attraction of collective agreements is to overcome some of the more stringent award provisions which may otherwise have application to a workplace.

Prior to the change of government in 2007, there were two primary forms of legislatively sanctioned workplace agreements, namely collective agreements and individual agreements (called “Australian Workplace Agreements” or AWAs). The ability to make AWAs was abolished in early 2008 (although a form of AWA, called an Interim Transitional Employment Agreement or ITEA can be made in certain circumstances until 2010).

2. What are the advantages of making a collective agreement?

Collective agreements offer the capacity to achieve:

a.    more flexible working arrangements;

b.    lower staff turnover;

c.    greater staff satisfaction;

d.    an increase in productivity, profits and competitiveness;

e.    reduced staff absenteeism;

f.     pay increases for employees;

g.    the ability to balance work and family; and

h.    better career opportunities and career paths.

These types of agreements can be as simple or as complex as you wish and the types of provisions may be innovative or merely reflect existing award conditions. Below is a list of examples of the types of issues which might be addressed in a collective agreement:

• Intent and objectives of agreement;
• Period of operation;
• Types of employment;
• Confidential information;
• Probation;
• Hours of work;
• Remuneration including provision for annualised salaries or loaded hourly rates to compensate for penalty rates and allowances;
• Overtime and extra hours;
• Rostering;
• Salary packaging and performance related pay through bonus and incentive schemes, gainsharing, profit sharing and employee share plans;
• Staggered starting and finishing times for employees;
• Banking of additional hours to allow for additional annual leave days;
• Cashing out of accrued sick leave entitlements
• Introduction of family friendly policies;
• Anti-discrimination;
• Dispute resolution;
• Roles;
• Performance review and criteria and wage increases;
• Holidays;
• Voluntary swapping of shifts;
• Hours of work and breaks;
• Public holidays and personal and family time;
• Termination;
• Extra holiday funds/income sacrifice/cash in lieu of banked hours;
• Rent subsidies;
• Retention bonuses;
• Payment of health insurance/health club membership;
• Meal/beverage discounts;
• Uniforms/special clothing;
• Job sharing;
• Employee assistance programs;
• Childcare programs;
• Parental and child care leave;
• Lifestyle support – career breaks scheme;
• Training and family responsibilities;
• Superannuation;
• Trainee conditions, hours of work and wages
• Hours flexibility including flexi-time, staggered hours/flexible start and finish times, compressed working hours, annualised hours, working from home.

3. Process for making collective agreements

The process for making a collective agreement has been simplified significantly in recent years. For instance, an employee collective agreement is now “made” at the same time as the agreement is “approved”. This avoids the delay which used to occur between approval of an agreement and its coming into force. The process for making an employee collective agreement is as follows:

a.    The agreement must not contain provisions that are less favourable than those provided for in the applicable or benchmark award;

b.    The agreement must not contain prohibited content;

c.    The agreement must identify the protected content that is to be modified or excluded;

d.    The agreement must include a dispute settlement procedure;

e.    The agreement may include a nominal expiry date up to five years;

f.     The employer must ensure that:

1. All employees subject to the proposed agreement are to be given access to the agreement at least seven days prior to the agreement being approved. (Employees can waive this right to access, if done so in writing prior to the agreement being made);
2. All employees subject to the proposed agreement are to be provided with a document published by the government called an Information Statement for Employees (Collective Agreements) at least seven days prior to the agreement being signed. This document sets out the basic legal requirements for making an agreement, and how the employer will seek employee approval of a collective agreement, i.e. by vote or another method; (Employees cannot waive this right);
3. Employees are to be made aware that they can appoint a bargaining agent to act on their behalf. There must be no attempt to coerce an employee not to have a bargaining agent present at any negotiations. The employer must give the bargaining agent reasonable opportunity to meet with the employee during the seven day period before the making of the agreement;
4. All employees subject to the agreement are to be given a reasonable time to decide if they want to approve the agreement;

g.    The agreement must be approved by a valid majority of employees who will be subject to the proposed agreement;

h.    The agreement must be signed by the employer and a representative of the employees. The signature of each party must be accompanied by the full name and address of each person signing the agreement, as well as an explanation of the person’s authority to sign the employee collective agreement;

i.      The agreement must be lodged within 14 days of being approved by employees;

j.      An Employer Declaration Form- Employee Collective Agreement must be completed online, or if the agreement is lodged by post, a declaration form attached to the agreement;

k.    The employer will receive a receipt from the Workplace Authority, verifying that the employee collective agreement has been lodged. Copies of this receipt must be provided to all employees covered by the agreement;

l.      Employers must retain a copy of the signed agreement for the duration of the agreement and for a period of seven years after it is terminated.

In the event that an expiry date is not expressly included in the agreement, the expiry date will be the fifth anniversary of the lodgement of the agreement. After this period, the employee collective agreement will continue to apply until it is either terminated or replaced. Agreements may also be amended before the nominal expiry date, requiring a similar process to the above is followed.

C. POLICIES

It is desirable that your business establish a set of policies for your employees to follow at work. These policies can address such matters as:

• procedures for taking sick and personal leave, annual leave and leave without pay;
• disciplinary procedures;
• electronic mail and internet usage;
• sexual harassment and discrimination;
• workplace bullying;
• workplace health and safety;
• office procedures;
• work expenses and refunds;
• meals and breaks;
• attendance and punctuality;
• uniforms;
• use of phone and mail systems;
• use of equipment and vehicles;
• payment of wages/salary;
• overtime and time in lieu (if applicable);
• other employment;
• drugs, smoking and drinking;
• accidents;
• performance review policies.

It should be apparent that you can implement as many policies as you consider necessary and they can be as short or as complex as you wish. Any policies should be tailored to suit your particular business needs. The main point is that any policy should be explained to employees, they should be provided with a copy (either in hard form or electronically) and they should sign an acknowledgement of receiving and understanding the policies. It is also of assistance to have a quality assurance system for the updating of policies and ensuring that employees have the latest version of same.

CASE EXAMPLE

MORE THAN LIP SERVICE - THE IMPORTANCE OF MAKING SURE EMPLOYEES ACTUALLY UNDERSTAND WORKPLACE POLICIES

Geoffrey Atfield v Jupiters Limited trading as Conrad Jupiters Gold Coast, Australian Industrial Relations Commission, 10 December 2002, Commissioner Hodder, Brisbane

The case reinforces the importance for employers of ensuring that employees are not only made aware of but also understand workplace policies if employment is to be terminated for violation of company policy. The practice at Jupiters Casino was to have prospective employees sign a document called an Induction Checklist which included an acknowledgement that an employee had read and understood the contents of the Staff Employee Handbook and agreed to abide by the conditions in the handbook. The policies included a staff prohibition on gambling. Mr Atfield had signed an acknowledgement but subsequently placed a bet on the TAB and then withdrew it almost immediately upon being informed by the TAB operator that staff could not bet. The employee had stated that he did not know of the prohibition but was dismissed anyway for gross violation of company policy.

The AIRC found that it was unrealistic to expect an employee to fully read and digest the entire handbook following a 2 hour induction process in a group environment; that there was a very real probability that the employee did not understand the effect of what he had signed; that the procedure used to update and inform new and ongoing employees of policies and policy changes was not effective; that there was some confusion amongst staff about the full extent of the employee gambling prohibition and that it was not unreasonable to accept that the employee made a genuine and honest mistake. Accordingly, the dismissal was harsh, unjust and unreasonable. As difficult as it may seem, it really does pay to put in place systems to ensure and show that employees fully understand workplace policies.

Whilst policies are an important tool, you should take care to ensure that they take the form of a directive rather than a mutually binding condition of employment which may be able to be utilised by an employee in a claim against the business.