As a business owner, it’s important to understand Australia’s employment relations rules with regard to HR compliance. What does this mean? HR compliance is the process of ensuring that an organisation complies with all relevant employment laws and regulations. These rules are derived from common law, industrial practices, and legislation created by federal, state, and territory laws.
Why HR Compliance is Important
Some organisations choose to ignore these rules, but doing so can result in costly legal action. Compliance includes having all the required contracts, policies, processes and systems in place.
Many people underestimate how crucial HR is to keeping a business compliant with employment law. In fact, HR compliance is a major issue for businesses in Australia today.
National Employment Standards & Awards
The National Employment Standards (NES) cover the minimum requirements that businesses must provide to their employees. These standards are set out in the Fair Work Act Chapter 2, Part 2.2.
When it comes to HR compliance, businesses need to ensure they adhere to both the NES and any other relevant industrial instruments. This includes, but is not limited to: minimum wage, working hours, penalty rates, leave allowances, breaks, public holidays and termination of employment.
It is vital to properly classify an employee according to their award, job role, and requirements. Misclassification can lead to underpayment and loss of rewards and entitlements that businesses are legally required to provide. Ignorance of what employees are entitled to is not a viable legal excuse, so organisations need to get classification right.
Knowing the correct pay rates for each employee is a vital part of your HR compliance practice, and it’s up to you to check you have the right information.
While it’s not a legal requirement to give an employee a contract in Australia, many employees are asking for employment contracts to ensure they have the right conditions and know what their entitlements are, in writing.
Having the proper contract is key when you’re hiring an employee. Even though a handshake agreement can be legally binding, it’s always in your best interest to state the employment terms and conditions for both yourself and the other person.
Contract terms and conditions should be detailed in easy-to-understand language. The following specific topics need to be addressed:
- Work hours
- Post-employment conditions
Additionally, it is crucial to define what constitutes intellectual property and how confidential information will be safeguarded. Also, a job description and workplace policies of the business should also be included for the benefit of all parties involved.
Always keep in mind that an employment contract cannot offer less than the National Employment Standards (NES) or the relevant award. Furthermore, you will need to have some policies in place once you finalise the contract.
HR Policies in the Workplace
Workplace rules and policies need to be easy to comprehend. Just like with contracts, it’s advantageous for everyone when these things are well-planned and explained clearly. They also protect the business from potential financial risks.
At a minimum, you’ll need to provide a Fair Work Information Statement to each employee. However, it’s recommended that you have a code of conduct and ethics, a harassment and bullying policy, as well as a grievance handling policy set in place.
It’s critical that you communicate your expectations and the consequences for not following rules to your employees. They should also have easy access to workplace policies. When taking on new employees, ensure that you take the time to explain all protocols thoroughly during the induction phase. Get written acknowledgment from all employees that they understand the rules. Review policy regularly with team members and update as necessary.
As a small business owner, you play a vital role in setting the tone for your company culture. If you don’t care about compliance, it’s likely that your employees won’t either. By changing your company culture and promoting compliance from the top down, you can ensure that everyone in your organisation is on the same page.
Want to learn more about HR Compliance?
For further expert advice on human resources or if you have any questions about anything HR related, get in touch.
Karen Hillen is your HR Partner, she helps businesses by providing HR support and advice services.
For the right HR support and advice, book a My HR Partner HR Advice call with Karen Hillen.
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