IR laws confusion leads to underpaid workers

Small business operators are unintentionally underpaying staff due to confusion over Federal and State industrial relations laws, according to Business SA.


Business SA chief executive Peter Vaughan says employers struggle to keep up with ever-evolving IR laws, which can lead to inaccurate pay for their workers.


Vaughan’s comments follow a recent revelation by the Fair Work Ombudsman that 14 Adelaide workers have been back-paid $120,000.


The largest recovery was $37,500 for four housekeepers being underpaid while working at a city motel. The employees were reimbursed $14,300, $14,100, $8,300 and $770 respectively.


Fair Work Ombudsman executive director Michael Campbell says all the employers involved in the investigation cooperated with inspectors and voluntarily repaid the money owed, which meant no further action would be taken against them.


“Our preference is always to work with employers to educate them and help them voluntarily rectify any non-compliance issues we identify,” Campbell says.


He says employers need to regularly review their award or agreement to ensure they are fully aware of their obligations.


According to Vaughan, every business should come under the Federal system to avoid unnecessary duplication of state IR laws.


“The overwhelming proportion of employers pay their employees the legislated and agreed entitlements,” Vaughan says.


“But unfortunately, the complication of the current federal and state laws make it very hard for employers, even with the best of intentions, to keep up with the terms and conditions that are now mandated by law.”


The national workplace relations system underwent a series of significant changes at the start of 2010.


From January 1, 2010, state referrals of industrial relations powers from NSW, Queensland, SA and Tasmania to the Commonwealth have created a national workplace relations system, which now includes all private sector employment other than employment by non-constitutional corporations in WA.


All employment in Victoria, the Northern Territory and the ACT was already under the national workplace relations system.


Employers and employees other than in WA that were previously covered by state industrial relations systems are now covered by the national industrial relations system.


Employers and employees in the national system have the same workplace rights and obligations, regardless of the state they work in. Features of the national industrial relations system include:


  • A set of 10 minimum National Employment Standards.
  • Modern awards that apply nationally for specific industries and occupations.
  • A national minimum wage order.
  • Enterprise bargaining.
  • Protection from unfair dismissal.


Modern awards, together with the NES and the national minimum wage order, make up a new safety net for employees covered by the national workplace relations system.


Employers and employees not covered by the national industrial relations system will remain covered by the applicable state industrial relations system.


However, national entitlements to unpaid parental leave and notice of termination or payment in lieu of notice, as well as protection from unlawful termination of employment, do extend to employees who remain covered by a state industrial relations system.


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