Dirty Truth of Handshake Agreements (Part 4)

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YOU CAN NOW HAVE CORPORATE LEVEL COMPLIANCE

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Expert HR Support is no longer expensive

What was once only affordable to the largest corporations, purpose workplace compliance support is now available to all sized budgets. . Although there are only a few online systems in the market, the best support is that which is:

  • independent (not selling bank, superannuation, or insurance products to your employees);
  • provides a full range of policy documents and management guides that may be used as is or customised to your business; and
  • support is direct online/phone access to real EXPERTS who can compliant advice and guidance on the entire range of employment issues in the context of your business strategies.

Meanwhile, we’ve compiled a few ‘tips and hints’ about each of the six key workplace compliance components (mentioned in our earlier articles) that you may find useful. These are:

1) The Letter of Appointment - Getting it Right!

Unlike many we have seen (and fix!), it is best that the Letter of Appointment document not just be cut and pasted together from various templates from the internet.  The ‘cut and paste’ or ‘copied from elsewhere’ versions often feature key terms and conditions that are totally irrelevant, illegal or refer to attachments that don’t exist.

Ideally a Letter of Appointment is written in easy to understand language, has all the requisite elements and customised to both the business and specific role. A Letter of Appointment must reflect the type of employment (full time, part time, casual, fixed term, etc), and addresses the following considerations; being,

  • that there is a very clear legislated requirement that all employees are provided with a written description of their employment terms and conditions (aka Letter of Appointment);
  • legislation prescribes that certain terms and conditions must be included in the written agreement;
  • providing a well written and compliant Letter of Appointment is an important opportunity for employers to exercise rights that are available to them; and,
  • as a written contract, the Letter of Appointment is a document that can be referred to and relied upon in disputes.

2) Pay rates - Flat rate or Award Rate?

2) Pay rates – Flat rate or Award Rate?

Essentially, we believe that it is worth the time and effort to ensure that rates paid to employees are correct. Unfortunately, calculating pay rates accurately is not always easy and most employers who are paying a flat rate or “above the Award” rates may not be doing so correctly. A few common errors we see are:

  • Calculating rates of pay can be a challenge especially when industry allowances apply. And, the most common error that we see is that an assumption is made that an above the Award flat rate of pay includes the annual leave loading. Unless the Letter of Appointment specifically notates such, and the appropriate amount has been included in the flat rate of pay, employers may be in breach of the law. Likewise, with overtime, penalty rates and allowances.
  • Also, if the employer does not specify in the Letter of Appointment that permissible flexibility has been applied to rates of pay, overtime, or hours of work, the flat rate or above the Award rate paid may not be sufficient, and again the arrangement is in breach of the law.
  • Often over optimistic employers make commitments to new employees that promise incentives or bonuses that may not eventuate. These offers need to be carefully worded and communicated to the employee so the expectation of entitlement is always well managed.

Our suggestion is to never take pay rates for granted and always get them checked.  Further, if you are offering employees other benefits, such as incentives, bonuses, car allowances and so on, ensure that the appropriate tax and superannuation is applied.

Robust workplace compliance requires more than payrates and letters of appointment.  Keep reading this article that explains why policies and practices underpin success and protect you’re your business and your employees against scrutiny.

3) Painless (and precise) policies

3) Painless (and precise) policies

Although Company policies may have a reputation as being at best a tedious necessity, and at worst, out of control bureaucracy, well written and compliant policies do have many useful and worthwhile features for the employer, the company and the employees.

Policies in the form that is easy to read and invoke consistent standards across the whole organisation:

  1. provide a plain English interpretation of the complex employment laws as they relate to your business;
  2. explain in detail the most important expectations that the business owner/s have of all employees;
  3. articulates the business owner/s commitments to the employees as to how they themselves will make business decisions, carry out business operations, and handle any interactions and dealings with others internally or externally;
  4. saves time and diminishes debate; minimises ambiguity and misinterpretation; and reduces wasteful re-iteration;
  5. gives employees and managers confidence and assurance that they are working within acceptable parameters, therefore reducing uncertainty and anxiety because they don’t have to waste energy and time always second guessing what is considered to be right or not;
  6. sets guidelines and may provide evidentiary support for significant decisions when managing employee issues or resolving disputes;
  7. is an opportunity to define workplace standards as to how you expect employees and managers to behave, interact and represent to each other and externally whilst representing your business; and,
  8. most importantly, certain policies are required to meet compliance and governance obligations including (and not limited to) Workplace Health and Safety, Fair Work Act, Human Rights, Corporations Law, State legislation and Industry standards.

4) Procedures save costs, reduce waste and win larger business

4) Procedures save costs, reduce waste and win larger business

Most businesses need documented procedures to meet certain industry standards or to win business with larger clients. However, when it comes to Workplace Compliance, there are several benefits in having the company procedures in writing and shared with employees and managers, including:

  • Saves managers and employee time and productivity not having to repeat instructions or micro manage, even new employees;
  • Diminishes single point sensitivity (for example, when someone holds critical information and can’t take leave without the place falling apart);
  • Provides easy accessible “how to” guides supporting policies and standards across the business;
  • Reduces risk of failure, error while detailing the important and proven steps for critical processes in the business; and,
  • Increases consistency, fairness and lawful treatment and interactions between staff, managers and others.

5) Protecting or exposing the owner?

5) Protecting or exposing the owner?

The value of policies, procedures and documents is either enhanced or diminished by the standard practices within the workplace.  Practices not only set the tone of the workplace, and reflect on to the customer dealings, they may protect or expose the owner, the business and the employees from adverse implications.

When defending against claims of wrong doing in the workplace, the typical practices and protocols of owners, managers and employees within may be scrutinised. It is the day to day behaviours, actions and decisions that define what is to be considered normal or standard practice within the business. Therefore, regardless of having all the right policies, procedures, and other compliance in place, it is the practices that tell if certain behaviours, actions or decisions are being condoned, role modelled and accepted by the managers and owners.

This means that a claim can be more readily defended if the right practices and protocols, including those that meet compliance and governance standards, are the norm within the workplace.

And our final comment on the ultimate protection for you, your business, and your employees….

6) Workplace Compliance Training

6) Workplace Compliance Training

Ideally all managers and business owners have been educated as to what is workplace compliance, how it impacts the business, them and their employees and what they can do about it.  Again, they don’t need to become employment law experts, however, they do need to know what and why certain compliance is mandatory.

Local business and industry associations provide masterclasses and workshops that are tailored to adult learning, the various levels of knowledge and time poor business owners and managers.

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WARNING!  Ignorance doesn’t cut it.

When it relates to being an employer of people, the regulators do not accept ignorance as an acceptable excuse.  Employees don’t care if you have the capacity to pay large back pay sums, they just want their money.  Also, it is very quick and easy for any employee to make a quick phone call or online enquiry to the Fair Work Ombudsman to make a complaint, especially now that they can do so anonymously.

100% of attendees at our training programs, including the most conscientious, did not know important elements of workplace compliance that expose their business daily.

Why comply?

Approximately 45,000 claims are dealt with in the Fair Work system per annum. We suggest you be the business owners who do the right thing. Don’t rely on ‘handshake agreements’, be pro-active, source the right HR/People management advice and support, and invest in a tidy up of your workplace compliance.

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Dirty Truth of Handshake Agreements (Part 3)

Good News, Compliance is Not Too Hard

The good news is that in most cases, it’s not too hard nor expensive for any sized business to become compliant. In fact, for the majority, you don’t need to become an expert who delves into the vast myriad of legislation, set up bureaucratic piles of paper processes, engage a team of lawyers, nor hire someone exclusively to write everything from scratch.

A business owner rang me to share the news that the ATO had visited his restaurant unannounced at 7pm during dinner service to conduct a random audit. He jubilantly described how the ATO auditor was apparently “surprised and impressed” that not only did the restaurant have all their Tax and Superannuation payments up to date, it also had time keeping (finger print sign in/out), Letters of Appointment, Fair Work Statements and Award Rates in order. 

To protect you, the business and your employees, the better and lawful alternative to a ‘handshake agreement’ is to invest and implement at least the basics of essential workplace compliance.

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Lawful alternative to the handshake agreement

He and I both knew that had the ATO arrived 9 months earlier, they would have seen a very different situation. Working with us, the business owner had invested a small amount to get up to date, which saved him potential fines, ongoing audits and scrutiny by the ATO and Fair Work. At the same time, the business owners’ moral reputation, which was at the time, being challenged by an adversary within his local cultural community was appropriately defended.  

Six fundamental aspects of compliance

Particularly, we suggest that all businesses, regardless the number of employees, must have the following six fundamental aspects current and compliant, being:

  1. Letters of appointment (plus the mandatory Fair Work Statement)
  2. Remuneration (Pay rates, tax and superannuation)
  3. Policies
  4. Procedures
  5. Practices
  6. Workplace compliance training

So, we recommend that your workplace compliance infrastructure make the most of the rights and opportunities that are available for employers, as well as addressing the requisite entitlements for employees as a minimum.

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Easy solutions exist for all businesses

Though we are frequently told and do appreciate that each business ‘is unique and special’, it is possible to work with good quality standard templates rather than ‘re-inventing the wheel’. In fact, the most experienced People Management/HR advisors will tell you that workplace compliance structures in the largest corporations can be readily scaled to suit even the smallest businesses, regardless of industry, State, or number of employees.

Go to our next article (Part 4 of 4) that discusses readily available online options for small to medium sized companies to implement Workplace Compliance.

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Dirty Truth of Handshake Agreements (Part 2 )

Dodgy Business Owners

The realities of disgruntled employees (and former employees), dodgy business owners, or the enforcement of Australian employment laws and regulations, render a ‘handshake agreement’ as a potentially dangerous liability. Unfortunately, just a ‘handshake agreement’ does not protect you, your business or your employees.

Getting caught out at Fair Work

Incredibly, despite all the recent media examples of high profile cases including Australian wide franchise organisations, entire industry sectors, and celebrity chefs, being heavily and publicly fined by the Fair Work system, many business owners are still prepared to take a risk, ignore the rules, and hope they don’t get caught out.

It is our experience, and as evidenced in the annual statistics from Fair Work, ‘handshake’, scam, and simply ‘half-baked’ employment agreements and arrangements, are still widespread throughout Australian industries. In fact, we are pleasantly surprised and extremely impressed when a small to medium sized business already has robust workplace compliance in place before we start working with them, as it is simply not the norm.

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Why SME’s have their fingers crossed?

While proper workplace compliance is the exception for most small to medium sized enterprises (SME’s), means that many businesses, business owners and employees are not adequately protected. However, when discussing these issues with business owners, we hear a range of attitudes and responses such as, the ever optimistic ‘she’ll be right’, the stressed hopeful ‘fingers crossed we don’t get caught’ to the more malevolent and defensive position of taking umbrage and display of arrogance.

And, in cases when an employer is trying to do the right thing by implementing workplace compliance essentials such as Letters of Appointment and policies, often he or she is confronted with push back and irrational (possibly suspect) indignation from their employees.

Old fashioned puts lives at risk

Recently we assisted a responsible client to issue updated Letters of Appointment and a few pertinent policies (such as Drug and Alcohol) to each of his 20 tradies. These employees were consigned to work on major new commercial construction works, where Workplace Health and Safety is paramount, the owner must comply to extensive site and contract terms and conditions, and the jobs for the whole team were put at risk if there are any compliance issues or breaches.

So, the business owner was understandably upset when at least one of the employees resigned saying he preferred to work the old-fashioned way with just a ‘handshake agreement’.

Resistance at substantial risk

However, despite even the loudest opinions of business owners, managers or employees, if any employer does not have proper workplace compliance in place, they are at immediate and substantial risk of:

  • the surprise visits, audits or scrutiny of the regulators, such as the ATO, Fair Work Ombudsman, ASIC or Worksafe
  • time consuming responses to employee claims, hearings and court appearances
  • the cost of defending your position, regardless of having been otherwise fair in your dealings
  • loss of sales and reputation
  • negative media attention
  • disruption to the company, and turnover of staff
  • hefty fines, penalties and/or jail terms
  • civil law suits
  • non-budgeted lump sum back payments or settlements
  • inability to properly address performance issues with employees

We believe that being haphazard or choosing to ignore Workplace Compliance is not worth the risk to you, your business or your employees. Look for our next article in which we discuss the good news and how workplace compliance is not too hard to achieve for any sized business.

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Ready to be a respected, appreciated and

lawful Employer?

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Dirty Truth of Handshake Agreements (Part 1)

Can’t be bothered with the employer paperwork?

A ‘handshake agreement’ between you the employer, and employees is very convenient. A deal is done, a flat rate is agreed, and rigmarole is kept to a minimum. It is no fuss, no cost and you haven’t had to prepare and exchange formal employment contracts, fill out and approve timesheets, or administer and manage inconvenient filing systems.

Payroll isn’t an employment contract

You may even set up a quick and standard payment through the weekly transactions and call it ‘payroll’, pay some tax, and make superannuation contributions. The beauty of a good ‘old fashioned’ ‘handshake agreement’ is that it lets you get on and run your company, whilst the employee gets on and does the job.

“But we had a deal” lamented the caller. ‘We had an agreement” he kept saying over and over. This business owner was clearly distraught, angry and scared.  He was asking me if I could help him somehow reduce the back payment that was being claimed by a former, and very disgruntled, employee. The claim was for approximately $7,000.

Compliance Works

Disgruntled mates have no loyalty

Some handshake agreements are even more convenient, with cash in hand, no tax, no superannuation, no time sheets and no paperwork whatsoever. In the very best examples, handshake agreements represent trust, loyalty, collaboration and true blue Aussie mateship; and, yes, we agree, that sounds like a wonderful and mature way to do business!

The ‘handshake agreement’ between this business owner and his employee was simple, and both were agreeable to it at the time. He would pay a flat hourly rate of $20.00 to the employee who would work at least 38 hours a week driving his commercial vehicles.  For several years, he kept his word, and the employee kept hers.  He was absolutely furious that this now former employee had reneged on their agreement, had ‘dobbed him in’ and had ‘betrayed him’.

The follow-on effect

Basically, while there maybe a few convenient advantages, there are far too many downsides of verbal arrangements and ‘handshake agreements’ between an employer and employee. Such informal agreements may assume an aberration of trust, integrity and fairness between the employer and the employees. They also may rely upon the vagaries of memory, nebulous details, and, two completely different perspectives and circumstances that inevitably change over time.

Although an unbudgeted $7,000 is a lot of money for a small business, the real issue was that at least another 20 employees (including his existing workforce) had the same verbal ‘handshake agreement’ with the owner. And of course, by the graciousness of the former employee, the existing employees had all been made aware of her claim and their potential entitlements.

Most of these 20 employees were due back payments of more than $20,000 each. Also, by this stage, the Fair Work Ombudsman had been notified, so potential fines and other penalties were a real possibility. Unfortunately, summing the back payments and entitlements due, the business owner was facing potential bankruptcy of his business.  

This is not an exceptional call nor story, it is typical of what we hear every week. Look for our next article Part 2 Dodgy Business Owners in which we discuss the true risks of ‘handshake agreements’.

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Warning Signs of Trouble

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The bookkeeper or office manager usually notices the trouble first! With the automation of bookkeeping systems such as MYOB and Xero, bookkeepers are now spending less time uploading banking transactions so could be spending more time providing better reports to their clients.

Often a business owner or manager is struggling with an issue within their business especially when it involves conflict on any level.  As conflict situations are usually hazed by emotion, it usually results a reaction of procrastination, avoidance or denial.  However, the breakthrough point, to see through the emotion of a situation, can be when the facts and right information is simply revealed.

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A bookkeeper can provide that key information which may unlock the stalwart stress or blinding barrier to success in a business.

Not only do bookkeepers process critical financial information, they may sit inside a company and hear or see what is going on.  Whether it be anecdotal or quantified evidence, a bookkeeper is often privy to the good, bad and ugly of the operations, administration and management of a business.

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Having a good working relationship with the owner and armed with evidential information, a bookkeeper may at least show the owner/manager the relevant information, and explain what it means in terms of the business issues.  At worst, the discussion and data may get the ball rolling as a thought starter or it may even provide the ‘aha revelation’ that solves a critical problem for the owner/manager.

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Bookkeepers may also sense if the owner/manager is out of his or her depth. Understanding how to help the owner/manager can be as easily as understanding what some of the key triggers might be and then when and where to get good advice.

If you find your business is answering yes to multiple questions in a category, or if your company answers yes to more than 10 items in the checklist, your company can resolve the issues before there is big trouble. Save your company from legal disputes, fraud or a review by the Fair Work Commission by getting in touch with our experts.

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Business Embassy has Your Go To Experts for fixing the issue before bigger trouble develops.  We can

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I Hate Managing People!

Over several decades of being in HR I have never had anyone say they love managing staff.

In fact, many supervisors and managers have confessed they don’t even like talking to people. They find it uncomfortable and put off having to do so as long as possible.  My observations is that when it comes to conversations between a boss and an employee it seems that football, the weather or the latest cat videos trending on social media are the most comfortable and common.

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Conversations between Managers and employees really fall into three broad categories – too much, too little or just right.  Getting it just right can seem like a challenge.  Especially when we add the daunting layer of workplace compliance, and potential laws that might impact what we can and cannot say in the workplace.

In the corporate world, typically, managers are taught that they should always be very clear and articulate expectations for employees. These expectations are then written into job descriptions and ideally aligned with business objectives under the headings of Key Result Areas.  The managers are then required to give employees ongoing feedback as they are to monitor and measure progress for success or otherwise, then manage the employee accordingly.

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However, most managers find this whole performance management process tedious, time consuming and difficult.  But, employees need and want this two-way communication so they will feel valued and supported in doing their job.

So, at Business Embassy we have solved this dilemma. We will manage your people for you. We take this necessary but time consuming task off your managers.

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RECENT ARTICLES

Why Do You Need a Budget?

Why do I need a budget? Business Embassy answers

Recently a client rebuked to me “Kath, stop telling me I need a budget, I need a forecast, I need these things to run my business.”  So I said, “Well, you are right. You don’t need a budget or forecast or any of those things to run a business”.  And then I went on to say, “However, let me put it this way, I strongly suggest that you use a budget, a forecast and those sort of things to run your business better”.

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My client has been conducting a successful business for over five years and on the surface it seemed like it was buzzing. Clients wanted more, staff were dedicated and the owner was creative, innovative and relaxed.

However, when I first starting working with the owner and his business, it became quickly evident that he also was struggling with cash flow especially when it came to paying quarterly BAS and other lump sum tax payments.  A few more conversations and it was apparent that his staff were frustrated with lack of positive feedback, guidance and direction from the owner.  They each complained that the owner didn’t trust them or value their individual contributions to his business, and they didn’t have budgets, nor did they know how much they could spend on capital improvements

On the financial side, the owner knew his profit margin had dramatically shrunk over the past two years, and that his supplier costs had gone up but hadn’t factored that into any flow on impact into his own product pricing – he hadn’t increased his prices for over two years. He also knew that utilities bills had also increased substantially over that period of time as had salary and wages.

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Business Embassy actively worked with the owner on a number of different aspects of his business. We streamlined his bookkeeping and clarified roles/functions; set up weekly team leader meeting in which the owner would give updates, discuss his ideas, and agree to upcoming priorities.

We also set up meetings with each of the managers so they had the opportunity to dialogue directly with the owner and engage in two way communications. At times, we would be part of those meetings and sometimes we had to step in for the owner when he wasn’t available. This meant that the momentum was kept up and the team leaders were encouraged and supported.

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We sat down with the accountant and bookkeeper to set up and obtain fundamental budget and costing information and reports. This information enabled the team leaders to cost the products and to manage their operational costs. Until now, the product line had not been costed – ever, to take into account the actual costs of production per item

We guided the owner through discussions with employees who were not performing, and assisted the decision making and implementation process for bringing in new staff or letting some go.

After six months of our working with the owner, we reviewed the financial numbers.  Whilst we had been told the business was at capacity when we started working with the owner, it was clear that the specific improvements we introduced delivered a 20% increase in revenue and substantial positive impact on the profit margin.  The cash flow was now smooth and there was cash in the bank sitting ready and allocated for future payments.

The business is now ready for the next step – and that is, to expand and double its capacity.  As the business mentors, we’re working with the owner to achieve this future growth.

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Business Embassy works quickly and efficiently. We have years of experience and practical templates to get the budget and cash-flow started.

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The Right to Hire and Fire

Right to hire and fire Business Embassy blog

You have the right to hire and fire.

Here in Australia, you must always ensure that you treat employees with respect. If you need to terminate someone’s employment it must be done properly and lawfully.

We advise and guide business owners through the process of people management. Should they need to terminate an employee, we work with the owners to ensure that the termination is lawful and respectful.

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However, I can’t count how many times, a business owner or manager has said to me “I can’t keep that person in my business, but I don’t want to do [the actual firing].”   Having to terminate an employee is emotionally challenging, whether it be the very sad situation of having to make a long-term, loyal employee redundant; a new hire on probation that’s just not working out; or when you have an extreme case of an employee who has been involved in a clear case of gross misconduct.

I’ve seen very calm experienced senior executives stress so much that they can’t speak in their 100th redundancy discussion; and the sternest of business owners so anxious that they don’t go through with the termination even though the employee had punched a client in the face; and a gentle soul of a manager become manic and yelling (at me, his venting buddy), before he had to face his employee who had been given 50 chances to improve performance.

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It’s not a good experience to have terminate an employee. I’ve been told I am being mean because I am not paying the payroll manager his fraudulently calculated entitlements; I’ve been protected by five body guards when the police had warned me of the dangerous nature of the employee I was terminating; and I have held back the tears when I knew the person was from then on, unemployable.

Business Embassy compassionately and professionally guides owners and managers through the traumatic process of employee terminations.   Our termination procedures and documents have been applied many thousands of times over, with the right outcomes. We treat all employees with respect and dignity.

3 Problems Managing Difficult Employees

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Many employers find they are managing difficult employees instead of managing their business. Being an employer essentially means that you have the commitment to pay employees to provide you with their time, skills and capability to a certain level of proficiency that will add fundamental value to your company.

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You already know that employing people is an expensive business cost by its very nature. As a manager of people, you know that it is your role to keep the business running smoothly. You have to find the most cost effective manner whilst maximising productivity. Any distraction, complication or reduction of achieving the maximum benefit detrimentally impacts your business and its bottom line.

Given that your role as a business leader is to achieve maximum value for the company shareholders in all aspects of the business operations, obtaining robust and appropriate advice and support for those ‘expensive’ employees and all their related matters is, at a minimum, tantamount to fulfilling your basic governance and obligations to deliver business success.

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Like their executive and business peers, HR experts identify how to reduce costs, increase profit and productivity. Neglecting people management issues or addressing them with minimal expertise might at best suppress the issues and will rarely eradicate the problem.

By not affording an HR expert for your business, minor problems and poor people management practices become the normal way of operating, or as is known in the industry define the ‘workplace culture.’

Workplace culture is considered to be the repeating habits, norms, language and actions of those within the company. Business are at risk of creating a workplace culture that repeats poor practices and which inflicts unnecessary frequent pain and costs to the business both in the immediate and longer term.

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Experienced managers know that employee issues are rarely straightforward and usually involve unique facts and context. To provide the best advice in seeking a solution, investigative questions need to be asked.

However, employers often don’t know the actual questions that need to be asked. In many cases, even a very experienced manager may never have lived through a particular situation or dealt with a similar issue.

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The Business Embassy team appreciates that employee issues tend to be unique rather than generic, and each needs to be treated in its own right.

Knowing the right questions to ask comes from a combination of both specialist knowledge and experience. We provide you with specific advice and can act as your short-term or regular human resources manager when you don’t have someone who can enact the advice in a timely fashion. Our services include training and mentoring your managers in both the legal and leadership skills to handle difficult employees.

Business Embassy’s commitment to ensuring your employees add value to your company is our Employer Value Proposition. We work with you and for you to effectively maximise the true potential of your employees. Call us to discuss the problems you are having with a difficult employee. We offer a free, 30-minute phone consultation and a quote for any follow on actions you need. All discussions are confidential.

Why did the minimum wage increase?

Each year the federal Fair Work Commission determines if the minimum wages need to be increased. The Commission adjusts wages to keep up with the impact of financial changes that are occurring in the Australian economy. The Commission reviews cases put forward by the industry representatives, including the employer associations and the unions. It takes into account key factors, including changes in the Consumer Price Index (CPI).

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Any job that is paid on the Award rates will be directly impacted. This includes apprentices, casuals, full-time, and part-time employees who are paid on Award rates. Overtime and other penalty rates will also change.

What happens if an employer does not raise the wage rates of affected employees?

If an employer does not increase the wages of those being paid on the Award rates, they could be severely penalised by the Fair Work Commission with an order to pay, plus heavy fines and possible jail. Also, the employees may make a successful claim for back payment later down the track, which could be years later and a lot of money for the employer.

How do I measure the total cost of the wage increase in my business?

Well, the wage increase must be applied to your total wages bill for those on Award rates. It will impact superannuation amounts as a flow-on effect, and any accruals such as annual leave or long service leave balances which are sitting on your books as a current liability.

We recommend your employees take their leave when it falls due and for employers to work with your employees to keep your annual leave liabilities as low as you can.

What can a business do to offset the added expense of high wages?

How to offset the added expense is a tough question. Many companies add the increase into their pricing of their products and services. For example, the price of menu items may go up in restaurants.

The best solution is to use this opportunity to review the business for opportunities to save money, control costs and improve profit. The announcement of the minimum wage increase is a good time to check that your inventory, suppliers’ contracts and overhead costs are fair and cost effective.

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[block_title title=”Dealing with the Minimum Wage Increase”][/block_title]

Why does Business Embassy want to help businesses deal with the wage increase?

Business Embassy wants to help you apply the increase appropriately. With the extra pressure on your operating costs of your business, we want to help you ensure your employees still feel secure in their jobs.  We are Your Go To Experts to help you manage your labor costs effectively. Don’t hesitate to give us a call. We offer a free, confidential 30-minute telephone conversation and quote.

HR Problems Google Can’t Solve

At a social gathering, I asked my two accountant friends Larry and Graham, why they don’t use a Human Resource expert in their respective businesses. To which Larry the CFO immediately quipped, “… because I have Google.”

Larry then regaled yet another anecdote regarding current HR problems.  Suffice to say the incident involved a recently hired manager uploading his workplace ‘selfies’ onto the company computer as his screen saver. Unfortunately, the employee was wearing nothing but the company logo t-shirt in the photos!

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Whilst this little story made amusing dinner party conversation, it became clear that Larry was spending an inordinate amount of his time dealing with the consequences of inadequately equipped HR practices.

In fact, Larry is heavily involved in hiring, firing and addressing employee related issues on a regular basis in addition to his busy CFO responsibilities. He also works long hours, travels extensively and is a committed, dedicated and an invaluable contributor to the success of the company. Surfing the internet for employer advice is a serious distraction from his real job, as well as impinging upon his family life.

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More complete than Googling workplace compliance. We are Your Go To Experts to gain the knowledge of the full-range of Australian employer rights and obligations. We have HR experts located throughout Australia to deliver training on a date and at a location that works for you.

Call us or fill out this form to get a must-know, half-day training course on workplace compliance.

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Graham, my other CPA friend at the dinner party, gave a contrasting answer to my question. “Most of my clients could really do with HR expert advice. They are frequently troubled with how to deal with employee related situations but don’t know how. So I refer them to lawyers”

Hearing both Larry and Graham’s approaches, as trusted accountants, support their clients confirmed what I had already been told by others. It’s clear that my experience with larger corporations is not necessarily reflected by what smaller companies do in practice.

Whilst larger corporations typically recognise the necessity and criticality of engaging appropriate expertise to look after the company’s often most valuable investment, being its employees, smaller businesses generally do not.

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Most start-up businesses readily source an accountant and bookkeeper to look after financial matters either prior to or within the first few months of achieving an ABN.

However, it is quite unusual for a company to have engaged an expert HR advisor on retainer or as staff until employee numbers have grown beyond 50 or 100 people.  This perhaps suggests that there are many smaller businesses with salary commitments of, say, $2m annually that are not efficiently or adequately managing their most expensive, complex and critical investment!

Further, as all successful leaders know, and as a colleague prompted me to emphasise here, that “a business’ most valuable commodity is not its bricks and mortar or product but its people. If you don’t attract and retain the best people your business will suffer greatly”.

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[block_title inner_style_title=”only_text” title=”Ask Us About Workplace Compliance “]Faster than Googling it![/block_title]

We will train your managers in how to handle employee issues. Know what your rights are as an employer. Reduce the risk of breaking a law.