Issue No. 26 - December/January 2005/06
AR changes are no magic bullet
by Mr Geoff Thomas
The introduction of the WorkChoices legislation in 2006 poses a challenge to Small to Medium Enterprises (SMEs) in South Australia.
Until now every SME had their workplace relations model prepared for them. The Industrial Commission of South Australia or the Australian Industrial Relations Commission created awards that applied to various industries or classes of work.
These awards were varied every year to include changes in pay, and to introduce new standards — redundancy pay, parental leave and so forth. The SME business owner/manager only had to understand which award(s) applied to their employees and apply the awards correctly.
Perhaps not surprisingly, some SME owners are not aware of awards applying at all. Those who do understand apply them as they see fit – sometimes correctly and sometimes not.
When the awards are not applied correctly an SME can be hit with claims — perhaps large and crippling ones — that can go back as far as six years.
On top of that, until now the SME employer had to contend with onerous unfair and unlawful dismissal laws. Most SMEs have little idea of their obligations until it is too late. The SME then has to cough up a lot of money to avoid expensive legal proceedings.
Life for the SME owner can be tough and seemingly unfair in the current industrial relations system. So what effect will the proposed federal WorkChoice changes have?
An example – John’s Plumbing Pty Ltd
John runs a plumbing business. He is aware that there is an industrial award for plumbers, but has never really paid a lot of attention to it. John knows demand for plumbers’ labour is high and has been getting worse in the past two years. He elects to pay his plumbers $20 per hour when the award rate is only $15 per hour.
Everyone seems happy with this, until November 2005 when he has to sack David.
David has been with John’s for two years. He turns up to work late, take...