No leave, No life!

Australian businesses are carrying billions of dollars’ worth of annual leave liability and millions of days of untaken annual leave. What does this say about the Australian modern workplace?

Paid annual leave is supposed to give people the freedom to enjoy regular rest and respite from work without financial hassles. This should be great for businesses because employees don’t get burnt out and great for employees because they can have a healthy work life balance. As is often the case things do not always turn out as one might expect.

Australia’s paid annual leave system is unique in that untaken annual leave is accrued indefinitely and paid on termination or when leave is eventually taken. Leave is always paid at the employees most recent salary (not the salary applicable at the time the leave was accrued) and it is often paid with an additional 17% annual leave loading (bonus). As a result many employees in Australia equate their annual leave account as a savings account which they can access at some point in the future, particularly when they are changing jobs.

Australia’s preference for banking annual leave has the following unintended consequences:

1. Employees end up burnt out
2. Businesses end up with large leave liabilities in their balance sheets which is money that could be invested in growing the business or paying down other debts
3. Employees view changing jobs as a means to access their accrued leave which leads to higher employee turnover
4. Taking all four weeks annual leave per year is subtly discouraged In many workplaces

In other jurisdictions, like the United Kingdom, things are very different. In the UK annual leave is provided on a “use it or lose it” basis (i.e. annual leave is not accrued from year to year). This policy relieves businesses from the balance sheet liabilities and encourages a positive attitude towards taking annual leave. People who have worked in the UK know that in July and August is a quiet time of the year as most employees take time out to enjoy what little summer weather is available. From personal experience working in the UK I think there is a much more healthy and positive attitude towards taking four weeks annual leave each year.

Here in Australia employers can better manage annual leave with well considered annual leave policies and procedures that work within Australia’s employment law to promote the taking of regular leave and the minimisation of annual leave banking. Call us if this is something you would like to explore for your business.

Social Media Policy & Unfair Dismissal

Most companies have resorted to social media as a promotional strategy and channel to reach their main customers. It has been found that for businesses operating particularly in the consumer goods and hospitality industries, social media is a must in order to simply remain alive within the competitive market that exists today. Businesses practice using social media for branding, communication and promotional purposes.  The fine line that lies between using social media for work purposes and social media for leisure can cause huge debate. Therefore, a social media policy strategy must be practiced to avoid unfair dismissals from arising.

Several employees all around Australia have already lost their jobs due to inappropriate comments, ‘likes’ and ‘tweets’ made on social media networks and a lacking social media policy. James Manning from the Sydney Morning Herald reported that, Alec Armstrong was sacked after commenting on Facebook that the council had too many office staff and not enough workers. Jane Morgan was fired from her job at a construction management company in Sydney in 2009 after she wrote a message on a friend's Facebook wall saying the company "sucks".

As our society focuses more on communicating using technology via social media networks, there are more risks to the reputations of businesses with unhappy or regular status updating employees. People can communicate to several hundreds of people at a time in just a few seconds and any bad comments mentioning a particular company’s name or processes can be more damaging and costly than the legal expenses required to go to court.

Mr. Young a partner at the Sydney-based law firm Holman Webb believes that coming out against the company in the public domain can be reasonable grounds for dismissal.

In contrast, “a decision handed down by Commissioner Roberts of Fair Work Australia reinstated an employee of Linfox who had been dismissed for material which the employee had posted on Facebook. Commissioner Roberts noted that Linfox did not have a social media policy either at the time of the employee's dismissal, or at the time of hearing. Instead, Linfox sought to rely on its induction training and handbook. The absence of a social media policy, Commissioner Roberts observed, was "not sufficient" and was considered an unfair dismissal.”

So what is the purpose for social media policy?

Social media policies have two main purposes, to provide reasonable guidance to employees so that their use of social media does not get them into trouble with their employer and to provide a written basis for any disciplinary action, including dismissal which the employer may consider necessary for adverse action.

What social media use is an employer entitled to regulate?

The most challenging part of creating the social media policy is differentiating between the social media use in the course of employment. Employees who are in charge of the social media communications channel vs. personal social media use that is unnecessary to complete the job description responsibilities. Guidance for such employees is best provided in their individual job descriptions and the social media policy is to be used as guidelines for social media use which occurs outside the course of employment.

Employers are entitled to address social media communication which is taking place outside of the course of employment on the employer’s equipment (i.e. computer or smartphones) as well as social media communication occurring in the employee’s home with their own equipment as it has the potential to damage the employer and their reputation.

“When it comes to social media use outside the course of employment, there are four broad areas in which that social media use has the capacity to affect employment (and thus, in turn, to concern the employer, and to merit attention in the employer's social media policy).” These include, social media use which has the capacity to damage the employee’s professional reputation, the reputation of the employer, the employee’s ability to work with their colleagues and finally social media use that breaches another of the employer’s policies e.g. discrimination, harassment and bullying policy.

These must be identified throughout the social media policy in order to truly inform employees of when and how they can use social media and when their actions can become a risk to their employment. This in turn will avoid claims for unfair dismissals and make the grounds of unfair dismissal easily understood by all parties.

Flexible Working Arrangements

With the introduction of the National Employment Standards (NES) from 1 January 2010; employees who are parents or carers of under school-aged children or parents or carers of children under the age of 18 with a disability, have the right to request flexible working arrangements from their employer.

What is a Flexible Working Arrangement?

A flexible workingarrangement is a change in the ordinary working arrangements of an employee based on their caring responsibilities for a child. Examples of flexible working arrangements include:

Flexible working hours.

A compressed work week.

Working from home.

Teleconferencing.

Job sharing.

A reduction in working hours.

Who can request a Flexible Working Arrangement?

For permanent employees, 12 months continuous service is required before a request can be made. For casual employees, they must be a long term casual and have a reasonable expectation of continuing employment on a regular and systematic basis. In addition to this, they must be a parent or carer who meets the conditions mentioned above. Requests from employees must be made in writing to the employer, stating the details for the changes that are sought and the reasons for the request.

Can a business refuse a request for a Flexible Working Arrangement?

The employer must provide a written response to the employee within 21 days of the employee’s request, stating whether the employer grants or refuses the request. The employer must also provide reasons if the request is refused. The response may offer other options to the employee. The Employer, however, can only refuse the request based on reasonable business grounds which include, but are not limited to, the following factors:

The effect on the workplace and the employer‘s business of approving the request, including the financial impact of doing so and the impact on efficiency, productivity and customer service:

The inability to organise the extra work amongst existing staff.

The inability to recruit a replacement employee to cover the changes/loss of hours.

The practicality or otherwise of the arrangements that may need to be put in place to accommodate the employee‘s request.

The financial impact on the business, as well as the impact of efficiency, productivity and customer service.

What can you do to ensure you are compliant?

Provide flexible work arrangement policies that are written in plain English, easy and clear to understand by all your employees.

Develop policies that explain what flexible work arrangements are available and the criteria that will be used to assess applications and implementation guidelines.

Provide easily accessible application forms for employees.

Develop flow charts outlining the application process, including timelines.

Circulate detailed implementation guidelines to relevant management.

Employers and employees are encouraged to discuss their working needs and arrangements in order to strive to reach an arrangement that balances the needs of both parties. As an employer, you should also be mindful of any State or Territory laws that provide employee entitlements in relation to flexible working arrangements, such as carer’s provisions under anti-discrimination laws.

If there is a dispute to what is agreed in an employment contract, enterprise agreement or other written agreement, then, to seek mediation in case of disagreement, the Fair Work Act 2009 empowers Fair Work Australia or some other person to deal with the dispute.