FROM THE EXECUTIVE DIRECTOR
Queanbeyan Technical College
In 2006, the Liberal Federal Government announced that a new Technical College would be established in Queanbeyan with sub colleges located in Broulee, Bega and Cooma. The Technical Colleges prime goal was to foster the needs of students wishing to complete their Senior Secondary Certificate of Education whilst at the same time undertaking an Australian School-based Apprenticeship.
The steering committee chaired by Mr. Bill Lilley comprised representatives from the Building and Construction – MBA, Queanbeyan Council, Blended Learning, Anglican Church, key business representatives from industries, Regional Group Training and MTA-ACT.
Whilst most college curriculums are structured around the secondary school requirements, the steering committee decided to first understand the current delivery of trade apprenticeship training within each sector and then structure the total curriculum around those programs.
The outcome is that for the first time within our region, the Queanbeyan Technical College will be offering students the opportunity to commence a Certificate III in Automotive Mechanical Technology (Light Vehicle) rather than a Certificate II. Students will be required to complete a minimum of two (2) days “On the Job” training per week with the other three days spent completing secondary school qualifications. Formal trade training will be conducted by Regional Group Training under their normal block release program.
The College will offer trade training in automotive and building and construction in 2008, and will also offer commercial cookery and electrotechnology from 2009. Unfortunately, due to reduced federal funding the board has postponed the establishment of any sub colleges.
MTA believes that commencing students in a Certificate III course, together with the stringent student interview process adopted by the college, that participating students are more likely to continue completing the course after receiving their Senior Secondary Certificate.
ATO UPDATE - CHANGES TO SUPER GUARANTEE
Use ordinary time earnings to calculate super guarantee
The Tax Office is reminding employers that from 1 July 2008 they have to use ordinary time earnings as defined in the superannuation guarantee law to calculate super guarantee contributions.
Ordinary time earnings are generally what employees earn for their ordinary hours of work. This includes over-award payments, commissions, allowances and paid leave. It excludes such things as overtime.
Most employers use ordinary time earnings to calculate super guarantee contributions. However, some employers are calculating super guarantee contributions on earning bases contained in:
- an industrial award
- an existing employment agreement
- a fund's trust deed, or
- a law of the Commonwealth, States or Territories.
All employers should check their current superannuation arrangements now to see if they are using an earnings base other than ordinary time earnings to calculate super contributions.
To see what is included or excluded from ordinary time earnings, employers can refer to the free guide Checklist for salary or wages and ordinary times earnings on www.ato.gov.au by searching for "ordinary time earnings".
From 1 July 2008, if the super contribution percentage in a specific earnings base is below the minimum 9%, employers will have to pay extra to meet the minimum 9% and avoid additional super guarantee charges.
Employers should think about building the increased super guarantee contributions into their workplace bargaining processes and payroll system now, to be reading for 1 July 2008.
The change to the law has been made to make sure all employees are treated the same for super guarantee purposes.
For more information on ordinary time earnings and the super guarantee, visit the Taxation Office website www.ato.gov.au>For Businesses>Super essentials or call 13 10 20.
Following are helpful examples for the motor vehicle industry
Motor vehicle companies may pay super contributions under an award which states that commission for salespersons is excluded from ordinary time earnings as defined in the relevant award. From 1 July 2008, commission must be included when calculating super guarantee contributions.
Bonuses are often paid by employers in a number of industries; however, many industries do not include bonuses when calculating the super guarantee. From 1 July 2008, there is a requirement under super guarantee law for the super guarantee to be paid on bonuses that relate to specific performance criteria.
EMPLOYMENT RELATIONS UPDATE
Recruitment and a Duty of Care
In the context of employers or their employment relations employees providing a written reference, being a referee or responding to prospective employers of employees that have left your employ, the employer has a duty of care to not omit relevant information or provide misleading information regarding an employee.
There is no duty implied by law on the employer to provide a character reference. Some awards make it an obligation to provide a “statement of service” but this is not a reference and is usually confined to recording the length of service or the capacities in which the employee worked. Where a reference is provided the following cases highlight some of the pitfalls that might arise, and suggest that a policy of only providing a “statement of service” is the best approach.
For example, in a United Kingdom case, an employer gave a sales employee such a bad reference, the employee successfully sued the employer for a breach of this duty of care noted above.
FACTS: the plaintiff was a sales manager at an insurance company (Co. A) which was taken over by another company (Co. B). Some months after the transmission of business, the new employer terminated the sales manager who then attempted to seek work at Company C. Company C conducted a reference check from his previous employer (Co. B). The employee, however, was given such a negative reference (stating he was dishonest and had no integrity) that they chose to reject his application.
The sales manager sued both Co. A and Co. B arguing they breached their implied contractual term that they would exercise reasonable care when giving him a reference. The plaintiff application was dismissed and the matter made its way up to the House of Lords where they agreed with the employee holding that:
A previous employer owed a duty of care to the plaints when preparing a reference and was liable for damages for any economic loss suffered by him because of its negligent preparation. The employer was considered to be not only preparing a reference for a third party but for the assistance of the employee who was relying on the employer to exercise due skill and care. It is fair, just and reasonable for the law to impose a duty on the employer to exercise care and not to act unreasonably when providing a reference. The fact the plaintiff could have sued for defamation did not prevent the law from recognising this duty of care.
Although a United Kingdom case, this House of Lords reasoning is used in Australia and applied as being “good law”.
In a more recent and similar case, the NSW Court of Appeal in Monie - v - The Commonwealth of Australia once again, looked at an employers duty of care (in a recruitment context) when considering a claim by an employer who was injured by an employee after being referred to him by the Commonwealth Employment Service (CES).
FACTS: Monie (a farmer in northern NSW), sought the assistance of the CES to fill a job vacancy. Winsor was referred to them by the CES. Winsor had a substantial criminal history including 41 prior convictions, however the CES knowing this, did not reveal Winsor’s criminal history to Monie. Approximately 3 months after commencing work on the farm, Winsor who was living on the premises shot Monie four times. Monie brought a personal injury claim for damages against the CES alleging negligence on the part of the CES. In addition, his wife and son brought damages claims for the psychiatric injuries they suffered. Ultimately, the court of appeal agreed with Monie stating the CES, having knowledge of the prior convictions relevant to the proposed employment, and the circumstances of that employment, owed a duty of care not to refer Winsor as suitable for interview or to refer Winsor
only after informing the Monies, with Winsor’s consent, of Winsor’s criminal history.
Although this case focuses on the duty of care recruitment agencies have when placing employees, it serves as a reminder to employers that the Court has confirmed that a third party can be held liable for the criminal actions of another party where the third party has failed to exercise reasonable care.
Message for employers
• There is no common law obligation (except if it is included in the contract of employment of the employee) to provide a reference or be a referee
• There can be no negligence if the statement is correct
• Employers or their employment relations employees need to be aware that there is a duty of care when checking references as well as giving them.
• In seeking references on employees, employers should exercise care not to defame any applicant. This includes making false or derogatory representations about them.
• When giving a reference, make sure it’s consistent with any written reference if one was given.
• Those giving references can be held personally liable for the representation they make.
• Employers should implement written policies and procedures regarding the giving of reference in your company and have staff sign those policies.
• Member can find additional information on reference checking, including a reference checklist in the “Recruitment Section” of www.eris.com.au .
REPORTABLE FRINGE BENEFITS
A change that affects the motor vehicle industry came into effect from 1 April 2007. The Fringe Benefits Tax Assessment Act has been amended to exclude FBT reporting for employees who use pooled or shared vehicles provided by their employer.
Most dealers calculate FBT on vehicles provided for employees' on the "pooling method". In recent years, the grossed-up taxable value of such fringe benefits had to be reported on employees' payment summaries (group certificates). Whilst employees did not pay any additional tax on the receipt of these benefits, the reporting of these benefits for some employees affected their entitlements to certain income tested deductions and tax offsets for superannuation contributions and government payments. It also affected HELP repayments, the amount of child support payable and the Medicare levy surcharge liabilities of an affected employee.
This amendment, which will have effect from 1 April 2007 (the commencement of the 2007-2008 FBT year), means that dealership employees who have access to the use of a pooled or shared vehicle provided by their employer will no longer have this benefit on their payment summaries. This may increase their access to certain government benefits and reduce their liability to income-related surcharges and obligations.
What should dealers do?
Between now and 30 June 2008, it is recommended that dealers should -
- consider the implications the superannuation change has for your business - work out what the additional cost is for your dealership when this change comes into effect on 1 July 2008.
- Consider re-negotiating your present commission structures to ensure that the superannuation contribution is part of your employees' total salary package - that is the commission is "inclusive" of the 9% superannuation contribution.
- Highlight the advantages that the change to FBT reporting brings. For some employees, this change will be financially benefical.
- For all new employees, ensure that their commission structure is inclusive of superannuation.
Article courtesy Auswild & Co.
2007 FEDERAL ELECTION - WORKCHOICES
The recent election victory to Labor will bring with it eventual change in employment relations laws and practice. The new Labor Government has undertaken to undo some of the WorkChoices reforms implemented by the previous government. The changes can be categorised as short/medium term and longer term initiatives. The following sets out a brief overview of proposed changes and the timing.
In the short/medium term it is the intention of the Rudd Government to introduce a Transition Bill into Parliament to:
- Prevent the making of any new AWA's. Existing AWA's will be able to continue until expiry date, MTA note that there appears to be a window of opportunity for members to enter into an AWA prior to the introduction of the above Transition Bill.
- Introduce the new but temporary individual agreement regime (Individual Transitional Employment Agreements) will commence and be accessible only to those employers that already have AWA's in their business. This system will cease at the end of 2009. It is uncertain as to the detail of this new individual agreement regime - there may be increased levels of checks and balances that may apply when compared with the AWA system.
- Continue the award rationalisation and review process which was commenced by the previous government, with the Australian Industrial Relations Commission being instructed to commence this process.
- Introduce the new additional National Employment Standards for all employees of corporations. These will include minimum long service leave entitlements, redundancy pay, public holiday work payments, community service leave and increased hours of work flexibility for parents of pre-school children. These new standards though will not apply until 2010.
It is noted that the Labor policy documents do not include the removal of present restrictions on unfair dismissal within the above Transitional Bill. Therefore it is more likely that the change will occur in the longer term.
The longer term initiatives will include:
- The creation of a new agency (Fair Work Australia) to take over the roles of the Australian Industrial Relations Commission, Fair Pay Commission, Workplace Ombudsman, Workplace Authority and the Building and Construction Commission.
- A new collective bargaining regime that will require employers to bargain should a majority of employees want an agreement. This will be accompanied with new obligations to bargain in good faith - there will be no obligation to reach agreement though. Content to go into agreements will be freed up.
- Removal of current restrictions on bringing an unfair dismissal. Labor has stated it wishes to consult with small business on the introduction of change including the introduction of a Fair Dismissal Code and the introduction of a system that is streamlined, simple, fast and that reduces inconvenience. For these reasons it is most likely that the present unfair dismissal arrangements will remain beyond the short term.
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