Employers cannot afford to relax their vigilance and strategic planning despite the start of a new year and the continuing distractions from COVID-19. Some key workplace risks and flashpoints look set to continue in 2022. This note discusses zombie agreements, Fair Work Ombudsman inspection and enforcement, workforce reductions if COVID-19 affects your business, and increased union efforts in enterprise bargaining.
Expired enterprise agreements – especially those made before 2009 - can provide benefits for employers that are no longer available in new agreements as they are inferior to modern awards. If they are not monitored properly, these so-called “zombie agreements” can create real compliance and underpayment issues and they are being hunted down. They can be terminated easily by a single employee or union.
In a recent case, the Fair Work Commission terminated an agreement covering 200 hospitality workers that provided lower than award weekend and evening penalties. The Commission allowed only three weeks before taking effect, reasoning that the employer should have been on notice that this could have occurred on application by a single employee at any point:
While the Employer will have to experience an increased wages bill, particularly with functions pre-paid and the Employer’s stated preparedness to not increase charges to customers of those functions, I consider that the burden should rest with the Employer when compared with the loss to employees of substantial hourly rates for work on weekends and public holidays.
Employers with zombie agreements should plan for their sudden termination so that this risk can be managed.
Fair Work Ombudsman blitzes and enforcement
The Fair Work Ombudsman has started 2022 by reinforcing its role as inspector and prosecutor of breaches of workplace law and payments. In addition to the well-publicised large company, high volume cases, it continues to conduct audits and “blitzes” in targeted industries.
Employers captured in these blitzes must cooperate fully. They will usually detect errors, even if they were unintentional.
Employers can be proactive and have some checks conducted on their own behalf to ensure they are paying correctly and are compliant with other key workplace laws. Please contact us if you want to know how to go about conducting a review.
Covid-19 workforce and hours reductions must be compliant
Many organisations continue to be adversely affected by downturns arising from the effects of COVID-19. It is sobering that as long ago as February 2021 we published an EMA Note outlining options for employers to deal lawfully with this following the demise of Jobkeeper flexibilities on workplace laws. The points are still valid.
Any employer needing to reduce labour costs in response to downturns will need to act lawfully and should seek specific advice.
Enterprise bargaining – pressure on
We have noticed increased pressure to renegotiate expired agreements. During the first two years of the pandemic, many employers delayed bargaining and workforces were less keen to agitate, especially in areas where union membership is lower. This resulted in relatively low wage increases. We have noticed increased wage expectations from employees, and unions becoming more proactive in renegotiation efforts - even if they do not have a majority in the workplace. Unions have also had some recent success in obtaining Majority Support Determinations by proving that the majority of employees want to bargain. This enables them to obtain bargaining orders from the Fair Work Commission, forcing the employer to the table.
We reiterate that employers with expired agreements should not ignore this risk. They should have a strategy that contemplates engaging with bargaining demands.
Require further information/assistance?
If you require further information or advice, please contact your Consultant.
EMA Consulting is not a law firm and therefore does not provide legal advice or services. The information contained within this document and associated material is general in nature and should not be relied upon. If you require specific advice on a particular matter, we recommend that you contact EMA Consulting on 08 8203 1700. Subject to the matter at hand, your EMAC Consultant may recommend that you obtain formal legal advice. If formal legal advice is required, upon your written instruction EMAC will brief your matter to a legal practitioner for this purpose. The contents of this document and associated materials do not represent legal advice.