Update on recent workplace issues

How will new penalty rates be phased in and can accountancy firms be found liable when their clients breach the Fair Work Act?

Phase in of penalty rates

The Fair Work Commission has ruled the cut to Sunday penalty rates will be phased-in over four financial years in the retail sector.

A full bench led said the reductions in Sunday penalty rates were more significant in the retail award, which favoured a longer transition.

However, the first cut in penalty rates from July 1 will be relatively small, while cuts in later years will be bigger.

For example, Sunday rates for full-time retail workers will fall from 200 per cent on July 1 to 195 per cent.

The decision supported the finding in the original decision that cutting Sunday penalty rates was likely to have a positive impact on employment, even if it might be difficult to forecast Update on recent workplace.

The full bench has been deliberating on how to reduce hardship flowing from the decision by phasing in cuts over a number of years through reductions on July 1 of each year, meaning lower Sunday penalty rates would be partly offset by increases in the minimum wage.

However, both United Voice and the SDA have flagged that they will challenge the decision to cut penalty rates in the Federal Court, meaning the first cut due on July 1 might not go ahead until the case is decided. Update on recent workplace issues

The transition for reductions in Sunday penalty rates in the four sectors is:

Retail Award: Full-time and part-time employees;

1 July 2017: 200% to 195%
1 July 2018: 195% to 180%
1 July 2019: 180% to 165%
1 July 2020: 165% to 150%

Casual employees (inclusive of casual loading);

1 July 2017: 200% to 195%
1 July 2018: 195% to 185%
1 July 2019: 185% to 175%

The Unions may appeal; they are working on an appeal to the Federal Court to stop the cuts to penalty rates.

National wage case – 3.3% pay rise – 1 July 2017

The Fair Work Commission granted award covered workers a
3.3 per cent increase, lifting the national minimum wage by $22.20 a week, or 59 cents an hour in this year’s annual wage review ruling.

The new weekly minimum wage will be $694.90—or $18.29 an hour—from July 1 2017.

President of the Fair Work Commission, Justice Ross, said that the decision directly affects more than 2.3 million employees who are reliant on award rates of pay.

Accountancy firm liable as accessory for underpayments

Under the Fair Work Act those that assist a person in breaching the Act can be held liable for the breach. They are liable as an accessory (just like an accessory to a crime).

An accountancy firm that knowingly failed to maintain current award rates of pay in its MYOB payroll system has been found liable for an employer’s underpayments, as an accessory to the breach.

Ezy Accounting 123 Pty Ltd, which claimed it was simply a service provider and that its role was confined to entering data provided by Japanese restaurant operator Blue Impression, denied liability. The firm’s principal told the court in an affidavit that its “role as a service provider was limited to certain bookkeeping work: data entry work and the uploading of MYOB files to Blue Impression’s bank.”

But Federal Circuit Court Judge John O’Sullivan accepted the Fair Work Ombudsman’s evidence that Ezy’s principal had been aware of underpayments when he emailed IR advisor Employsure in 2014 about a Taiwanese subclass 417 working holiday visa holder he suspected was being underpaid at a restaurant in the Melbourne suburb of Doncaster.

In one email in June 2014 he compared the “MYOB rate” of pay with the “Fair Work rate” and in a July email he referred to the award rate and the “actual rate”.

Judge O’Sullivan said he accepted the FWO’s submissions that Ezy and its principal “had at their fingertips all the necessary information that confirmed the failure to meet the award obligations by [Blue Impression] and nonetheless persisted with the maintenance of its (payroll) system with the inevitable result that the award breaches occurred.”

He found Ezy involved in all of the contraventions alleged by the FWO against Blue Impression, except a meal break breach, and ruled that it was accessorially liable Update on recent workplace.

The FWO told the court that Ezy’s principal “must have known” that Blue Impression was underpaying its workers because Ezy knew the rates in its MYOB payroll system were not sufficient to enable the employer to comply with the award.

Judge O’Sullivan accepted that the knowledge of the structural problem was “clearly fixed in the mind” of the principal as a result of an audit conducted by the FWO in 2014.

He criticised the “blasé” and “deliberately obtuse” evidence provided by the principal in advancing the position that he “wasn’t cognisant” of issues he had previously assisted the employer with or acted on its behalf to resolve.

“I reject that as a transparent attempt to limit his (and that of Ezy) responsibility for what Ezy was actually involved in,” he said.