Newsletter No 87 - 4 September 2008 |  |
News
Feature article
Your questions – Our answers
Recent updates
News
Pre-WorkChoices federal awards varied – minimum rates 1 September 2008
The usual flow-on of the federal mimimum rates decision to pre-WorkChoices federal awards was handed down by the AIRC on 27 August 2008.
In line with the 2008 Minimum Wage Case, an amount of $21.70 a week (rounded up from $21.66) safety net rise for workers on transitional awards was granted.
Date of increase
The Full Bench noted that the 1 October date would also apply:
‘Where application is made to reflect this decision in other transitional and pre-reform awards, any variation should not operate before the first pay period to commence on or after 1 October 2008. We addressed the question of retrospective operation of variations in the Wages and Allowances Review 2007 decision. It is unnecessary to repeat all of what was said there. Unless the Commission is satisfied that there are exceptional circumstances the date an award variation is expressed to come into force must not be earlier than the date on which the variation is made.’
The increase will apply to minimum wage rates and the federal minimum wage in 12 transitional awards. It would also apply proportionately to allowances in those transitional awards and 12 pre-reform awards.
Payroll tax rulings – Contractors and Construction Industry (VIC) 29 August 2008
New Payroll Tax Revenue Rulings affecting Contractors and the Construction Industry have been issued by the Victorian State Revenue Office. Both offer interpretation of the new Payroll Tax Act 2007.
Contractors - Services ancillary to the supply of goods (PTA033)
The new Revenue Ruling PTA033 relates to the percentage of a contract which is made up of ‘the supply of goods’ which then takes that contract outside of the payroll tax system. As a result of harmonisation with NSW, the percentage has been reduced from 65% to 50%.
Note that the new Revenue Ruling replaces a previous Ruling – PT.123 – and is more favourable to taxpayers.
In PT.123, if the supply of goods constituted more than 65% of the contract amount, the contract would not be regarded as a relevant contract as the provision of services would be considered as ancillary to the provision of goods.
Contributions to the Construction Industry LSL and Redundancy Funds (PTA034)
A new Revenue Ruling – PTA034 – replaces and combines previous Rulings PT.049 and PT.126. It covers the issue of whether payroll tax is payable on contributions made to construction industry long service leave and redundancy funds. There are minor wording changes but essentially the new Ruling is the same as those it replaces.
Whilst there are minor changes in the wording, in substance, the content of this Revenue
You must provide employment records to Ombudsman 26 August 2008
Two companies are facing prosecution for allegedly refusing to provide employment records to a workplace inspector. In both instances, the company had received repeated requests to provide the records from the Workplace Ombudsman which had received complaints of underpayment from ex-employees.
The Commonwealth Director of Public Prosecutions has commenced prosecutions of the companies.
Workplace Ombudsman Executive Director Michael Campbell says all companies should take the action of the CDPP very seriously and comply with all formal requests from workplace inspectors.
Roofing company
Nicholas Terizakis, director of Atlas Roofing Pty Ltd faces criminal proceedings in the Adelaide Magistrate’s Court, following claims by a former staff member that he was owed more than $28,000 for unpaid overtime worked over a three-year period between 2004 and 2007. If convicted he faces a maximum penalty of six months’ jail and/or a fine of $3300.
The Workplace Ombudsman says it tried unsuccessfully between October 2007 and January 2008 to obtain employment records to investigate the claim.
While Terizakis informed the Workplace Ombudsman in January the matter had been settled over the Christmas period, he failed to provide any evidence of the negotiated outcome.
Hairdresser
An application has been lodged in the Federal Magistrates Court in Western Australia against Sterling Crown Pty Ltd, trading as Partners for Hair.
Despite paying a $550 infringement notice, the company has failed to provide documents requested by the Workplace Ombudsman to allow it to investigate allegations made against it in May, 2007, by a former employee.
Claims made by the ex-worker include non-payment for time worked, failure to provide payslips, failure to pay superannuation and non-payment of annual leave.
As a result, the Workplace Ombudsman sought to audit the business but it will allege in court that Sterling Crown could not be audited, nor could the allegations against it be investigated, because it has failed to provide records formally requested on two separate occasions.
If found guilty, the company faces a maximum penalty of $5500 for each contravention of the Workplace Relations Regulations 2006.
Feature article
Federal employers can be subject to state wages laws Source: Paul Munro, IR consultant
27 August 2008
There are state laws that apply to federally covered employers that can result in prosecution for underpayment even though the employer is complying with federal law.
This recent query from a subscriber addresses this issue.
Q. We have a number of AWAs within our organisation which have been verified by the Workplace Authority as passing the (then) ‘fairness test’ when compared to the applicable NSW NAPSA.
Because of the retail nature of our business, we employ a significant number of young people under AWAs, including people as young as 16 years.
We recently received a letter of complaint from the parent of a 17 year old employee employed in one of our New South Wales outlets claiming we are underpaying the employee, because their wage under the AWA is less than the rate prescribed under a NSW State award.
We made enquiries with the NSW Office of Industrial Relations and were advised their claim for underpayment would succeed, adding that the company could be sued by their Office to recover the correct wages if the company did not rectify the situation.
Because we are an incorporated employer, it is our understanding that the WorkChoices laws apply and override any state law dealing with wage rates and those employment conditions provided by the Workplace Relations Act (WRAct). Having had the AWA assessed by the relevant federal authority as passing the fairness test, we are bemused that a State authority is insisting we comply with state laws, particularly as the Workplace Authority made no mention of complying with state laws when applying the fairness test to our AWAs.
Because of the number of employees involved, the underpayment claim, if successful, would involve considerable back pay, apparently back to 27 March 2006 in some instances.
Are we liable for any underpayment of wages in this circumstance?
A. The answer is yes, where the junior employee is under 18 years of age, employed in New South Wales and the arrangement was entered into on or after 27 March 2006.
The Industrial Relations (Child Employment) Act 2006 [NSW] provides that an employer of a child under 18 years of age not covered under a state industrial instrument, who entered into an agreement or other arrangement on or after 27 March 2006, must ensure that there is no net detrimental result in relation to the child’s minimum conditions of employment under the comparable State award, or relevant industrial relations legislation (Annual Holidays Act, Employment Protection Act (redundancy pay) or Long Service Leave Act).
In this case, the wage rate for a 17 year old under the NSW State Award is greater than the relevant APCS rate of pay, therefore, the state award wage rate would prevail. Conversely, the minimum rate of pay for junior employees aged 18 years and above would be subject to the relevant APCS wage rates within the scope of the applicable NAPSA.
Child labour laws
The reason this particular State law overrides federal law, in this respect, is that s.16(3) of the WRAct does not exclude state or territory laws covering certain matters, including ‘child labour’. This particular state legislation is deemed to fall under the matter of child labour.
Laws in other states and the territories that govern the employment of children (as defined) would also override the relevant provisions of an AWA, although most state or territory child labour laws usually prescribes matters such as restrictions on certain types of work under a prescribed age and restrictions on the time of day when work can be performed by a child.
Lack of communication
Unfortunately, from the employer’s perspective, it would appear the respective federal and state or territory government authorities are not required to communicate the necessary obligations to be observed under the other’s respective jurisdiction.
Your questions – Our answers
Q. Emergency service leave obligations
What are our obligations concerning emergency services (CFA/SES etc) volunteers in relation to leave they may need to take in times of crisis? I have been unable to find provisions in the Workplace Relations Act.
A. The source of entitlement to such leave is generally an award or certified agreement. No legislation exists which prescribes paid or unpaid leave. However, legislation does exist to protect an employee from being 'victimised' by their employer for participating in emergency services work.
Q. Super contributions and 457 and 413 visa holders Could you please tell me if our company is required to pay superannuation for employees who are on 413 (executive) & 457 (professional) visas?
A. An employer does not have to make Superannuation Guarantee contributions for employees who are working in Australia on visas that are listed in regulation 7 of the SG regulations.
Subclass 457 and 413 visas are both listed, so an employer does not have make SG contributions for such employees.
The following topics have recently been updated on the Payroll Companion website:
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