Small and medium businesses have been catalysts for economic growth and national development. Small to medium businesses range from simple single entities to businesses with complex group structures.

Small businesses can be defined as an actively trading business employing less than 20 employees. Under the Fair Work Act 2009 (Act), a National System Small Business Employer has been defined as a business employing less than 15 employees. While calculating the number of employees of a small business, all employees except casual employees are considered.

Medium businesses employ between 20 to 200 people. The Act has made substantial changes having direct impact on small and medium businesses. It is therefore crucial that all such businesses understand the requirements of employment law.

Owen Hodge’s team of Sydney-based small business employment lawyers are here to assist you with employment law.

Fair Work Act 2009 and Employment

The Fair Work Act introduced certain regulations for the small and medium businesses to comply with. These included the following:

  • National Employment Standards (NES) and Modern Awards: All national system employers must provide 10 minimum entitlements to full-time and part-time employees called the National Employment Standards. The NES minimum entitlements include a maximum standard working week of 38 hours plus reasonable additional hours for full time employees, right to request for flexible work arrangements, unpaid parental leave of 12 to 24 months after birth or adoption of a child, minimum 4 weeks annual leave, 10 days of paid personal/carer’s leave, community service leave, long service leave, public holidays, notice and redundancy pay in case of termination and a fair work information statement. Modern awards provide additional enforceable minimum employment standards. These awards contain a flexibility term which allows an employer and an employee to agree on an arrangement which varies the effect of certain terms of a modern award. These are known as individual flexibility arrangements (IFAs).
  • Unfair and unlawful dismissal laws:Employers are expected to be fair to their employees as far as termination of employment is concerned. An employer cannot dismiss his employees in circumstances that are harsh, unjust or unreasonable and is under an obligation to provide reasons for such dismissal and the employee should have an opportunity to respond. The employer needs to comply with the practices set out in the Small Business Fair Dismissal Code at the time of dismissing an employee.
  • Enterprise Agreement making obligations:The Act requires that employers and employees bargain in good faith while entering into enterprise agreements. Enterprise agreements must result in employees being better off overall. During negotiation of a new enterprise agreement, both the employer and an employee are entitled to be represented by a bargaining representative.
  • Redundancy: Employees of national system employers with 15 or more employees are entitled to redundancy pay. Casual employees and employees on fixed term contracts are not entitled to this pay. This new entitlement does not accrue upon an employee until he has completed a qualifying 12 months’ service period, commencing on and from 1 January 2010.
  • Record keeping: Under the Act, employers are required to keep accurate and up-to-date records for all employees including nature of employment, employee’s commencement date of employment, payment rates and duration of overtime, leave entitlements, superannuation contributions made, termination of employment details, wherever applicable and the employer’s Australian Business Number.
  • Fair Work Ombudsman (FWO) and Fair Work Commission (FWC):The FWO promotes harmony and cooperation in workplaces by educating employers and employees about workplace rights and obligations, ensuring compliance with workplace laws and commencing proceedings against those who breach workplace laws. The FWC is the national workplace relations tribunal carrying out a range of functions relating to the safety net of minimum wages and employment conditions, enterprise bargaining, industrial action, dispute resolution, termination of employment etc.

In addition to the above, our small business lawyers always recommend that small and medium businesses have a written policy on discrimination and harassment. A responsible senior employee should be nominated and given adequate training for handling discrimination and/or harassment incidences in the work place. The Fair Work Amendment Act 2012 which came into effect on 01 January 2013 introduced some key changes such as:

  • The FWC will review default superannuation fund terms of modern awards every four years;
  • Enterprise agreements cannot be made with a single employee;
  • Prohibiting terms enabling employees to opt out of an enterprise agreement;
  • Increasing the time limit for lodging unfair dismissal applications from 14 to 21 days;
  • Workplace rights shall apply to persons including employees, employers and contractors;
  • Enable the FWC to dismiss unfair dismissal applications in certain circumstances;
  • Empowering the FWC to dismiss unfair dismissal applications and make cost orders against parties, unfair dismissal lawyers and other paid agents in unfair dismissal matters in certain situations; and
  • Presidential members of the FWC can make stay orders.

For expert legal advice regarding employment law for small and medium businesses, contact Owen Hodge’s team of small business lawyers in Sydney today.

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