A group of industry peak bodies have teamed up, calling for a simplification of the General Retail Industry Award (GRIA) following a recent Federal Court decision.
In a joint statement, the Australian Chamber of Commerce and Industry (ACCI), Business Council of Australia (BCA), Australian Industry Group (Ai Group), Australian Retailers Association (ARA) and National Retail Association (NRA) said the consequences of the decision will be higher costs, an increased compliance burden and reduced productivity.
This teaming up comes more than a month after the Federal Court of Australia handed down its decisions in a case that involved the Fair Work Ombudsman, Woolworths Group, Coles Supermarkets and former employees of the latter two.
According to the five lobbying groups, the Federal Court decision shows how difficult it is for employers to provide employees with flexibility, whilst meeting the “burdens” of time and wage recording and award conditions.
They also spotlight the “onerous nature of requirements to keep detailed records of hours worked and award entitlements”, which they say can include circumstances where an employee may be paid an annual salary that significantly exceeds the value of entitlements.
“This case shows just how complex our workplace laws have become,” BCA chief executive Bran Black said. “Employees want flexibility to self-manage their workload, not a return to daily timesheets, while employers need clarity and simplicity, not more legal complexity.”
The FWO has outlined some of the new changes on its website, stating that an employer and employee may agree to an annual wage or salary to cover specified minimum entitlements that are payable to the employee under the relevant award or enterprise agreement. These include both contractual offsetting and annualised wage arrangements.
Contractual offsetting arrangements can be agreed in an employment contract to cover minimum entitlements. Employers must still pay correctly each period, keep proper records, and can’t offset overpayments from one period against another.
Under annualised wage arrangements, these are allowed under some awards or agreements, covering things like penalties, overtime and allowances, but must follow specific award rules.
The FWO added that all employers must keep accurate pay and record-keeping systems, including overtime and pay rate details on pay slips.
The five peak bodies outlined several examples of compliance burden based on the judgment in the joint statement. Salaries, including at senior levels, cannot be used to offset award entitlements on an annual basis, which the group pointed out has been a longstanding practice across most industries. This means salaried team members need to be paid similarly to waged team members instead of allowing for the smoothing of entitlements across the year.
Where an employer pays a senior employee on a salary basis which exceeds their monthly entitlement under the relevant award, the employer is required to keep a separate record of each penalty, allowance or overtime amount due under the award. According to the group, this rule would come despite the staff’s salary exceeding their award entitlements, with no practical impact on the amount of pay received by the employee.
They also claim that if a team member takes leave and the employer rosters them back at work on the following days, the leave days will now be treated as worked time.
ACCI CEO Andrew McKellar said the decision runs counter to government ambitions to improve productivity and provide job stability.
“We believe this judgment will have implications for millions of workers under a wide range of industry awards, including retail, hospitality and clerical positions across many sectors of the economy,” McKellar said.
“Requiring senior employees to clock on and clock off, measure breaks and be given no discretion to decide when they need to work extra hours creates a heavier regulatory burden for businesses already drowning in red tape.
“Australian business is looking for a green light to grow. Unfortunately, this sends a message that workplace relations remain a huge impediment to growth. Labour productivity is flatlining and the effective implications of this decision, alongside other recent changes in industrial relations, only serve to jeopardise it further.”
Ai Group CEO Innes Willox also chimed in, saying he decision highlights the need for genuine simplification of the “notorious minefield of technicalities and impractical rules” that constitute the GRIA.
“All too often, our laws are proving too complex and confusing for even the country’s largest employers to successfully navigate,” Willox said. “Small employers running the gauntlet of employing people in Australia without the assistance of armies of workplace relations advisors and lawyers are understandably often overwhelmed by the challenge.
“Recent years have seen the Government implement an avalanche of new workplace relations obligations, a suite of radical new powers and entitlements for unions to enforce the rules and terrifying new penalties for those that misapply them. What we haven’t seen are tangible steps to address the complexity that is the root cause of much non-compliance.”
Willox added that the decision will cause many employers to reconsider the viability and utility of continuing to provide annualised salaries to employees. “This will frequently be to the detriment of employees who value the certainty of a stable above award salary rather than receiving fluctuating hourly pay arrangements,” he said.
“In many industries, it is common for employers to allow well-paid employees to work flexible hours, typically to suit their own circumstances, without keeping the kinds of records that the decision contemplates. This is particularly the case in the context of working from home arrangements that many employees enjoy but which provide employers with limited visibility and control over precisely when employees are working. Given the decision, many employers will undoubtedly need to reconsider their ability to continue to offer these kinds of arrangements.
“At the very least, the decision will necessitate many employers returning to ‘bundy-clocks’ and undertaking much stricter monitoring and the kind of surveillance of staff that we know many workers and unions will resent.”
ARA CEO Chris Rodwell also weighed in, saying that both employees and employers should be better able to understand the award to avoid compliance issues.
“With 994 different pay rates across almost 100 pages, the GRIA is incredibly difficult for employers to understand,” Rodwell said. “The expectation that smaller mum-and-dad operated businesses, who lack legal and HR resources, can use the award appropriately is entirely unreasonable.
“This complexity has been the driver for our case in the Fair Work Commission to clarify, simplify and modernise the GRIA. If it requires teams of lawyers and HR experts to interpret the GRIA, it’s clear the system is broken, and it is setting up businesses to fail.
“It’s important to stress this isn’t simply about retailers. Employees deserve clarity, too. Workers have the right to understand their pay and conditions clearly and simply. We will continue to advocate for solutions that will make the retail award easy to understand while delivering choice and flexibility to employees.”
The BCA, ACCI, ARA, Ai Group and NRA were not parties to the FWO case.