Australia’s complex awards system is a real barrier to workers being paid properly by small businesses, the head of Australia’s industrial relations umpire says.
The ABC has recently revealed allegations in the hospitality sector of employers underpaying staff by hundreds of dollars a week, taking tips as punishment or cancelling shifts after being asked for award rates.
Fair Work Commission (FWC) president Iain Ross believes such cases represent a minority of employers.
“Overwhelmingly small business operators want to meet their legal obligations,” he said.
But many of those operators are saying the award system is too complicated to understand, and Justice Ross agrees with them.
In a rare interview, he told RN’s Best Practice the system needs “significant improvements” to make awards easier to understand for small business operators.
“For the balance, they want to know what it is they have to pay their employees and what their legal obligations are,” he said.
“Our obligation is to try to make that as clear as we can so that they can comply.”
Ashik Ahmed, CEO of workforce management software company Deputy, says there is a lack of awareness and understanding among small business owners of what their workers should be paid.
He says when he helps businesses manage varying rates of pay for their staff, it’s “an eye-opener” for employers.
“People realise, ‘oh, we haven’t been doing this right. We need to be doing this right. We need to back pay. We need to get it right’.”
Hospitality, clerical, manufacturing and construction are among the industries most affected by what Justice Ross describes as “a high proportion of small businesses and a complexity in the current award that needs to be addressed”.
As part of a FWC-initiated plain language review, awards are being edited, redesigned and re-written.
Removing the legalese
The Australian award system is clearer than it was — there were once three awards for brush and broom-making, two for glue-making and a standalone award for potato crisp makers.
Hundreds of manufacturing awards have been condensed into just one, and since the 2009 Fair Work Act came in, 122 awards exist where there used to be thousands.
But awards remain bogged down by jargon.
In research conducted in 2014 for the FWC by Sweeney Research, small business operators described awards as “convoluted, complex, ambiguous [and] of questionable relevance”.
“[Awards are] written by lawyers as a legal document, which neither the employee nor the employer or the manager can interpret,” Mr Ahmed said.
He says the rates aren’t wrong, but the language is.
“If I’m working weekends where I’m sacrificing my social life or my family time, yes, I need to be rewarded appropriately for the work that I’m doing — or if I’m working after hours,” he said.
“Everything as far as the penalty rates are concerned is perfectly fine in my opinion.”
Small business operators in industries like construction are finding awards convoluted and ambiguous. (Cameron Pashak/iStockphoto.)
What’s not right, he says, is the “super complex” language used in the awards.
“I think the award we have is fair and just, but it’s not user-friendly,” he said.
Justice Ross says the FWC’s review has prioritised this concern, focusing on plain language translations.
“The objective of this review process is that an award should be able to be read by an employer or an employee at the workplace without needing a history lesson or a paid advocate to interpret it,” he said.
“The challenge is how do you address the vast range of practical issues that might arise and yet keep an award to a reasonable length.
“What we have to try and do is find a way of re-expressing that sort of tortuous language in something that is easy to understand.
“That’s the process we’re going through at the moment.”
Ignorance no excuse, says union
ACTU secretary Sally McManus says the balance of the industrial relations system swings too far towards employers, and that too often employers’ interests are catered to above the needs of workers.
She disagrees that the problem of workers being incorrectly paid is attributable to complicated awards.
“We know from numerous inquiries and investigations that wage theft is systemic and cannot be blamed on ignorance of the rules,” Ms McManus said.
“Often wage theft involves deliberate manipulation of the system followed by contrived ignorance as a first defence.”
She says the process of recovering stolen wages needs to be simplified.
“Stopping wage theft is in the interest of both working people and those employers who pay fairly and have to compete with crooks,” she said.
“Rather than pandering to dodgy employers at the cost of fairness to the victims of wage theft, we need to make recovery much simpler and more accessible for working people.”
Input from small business owners
The Sweeney Research — part of a “citizen co-design” project — has informed the FWC’s redesign of the awards system.
The co-design project involved group discussions and in-depth interviews with 47 small business owners from across Victoria and New South Wales.
“The information needs of participants were clear,” the report states; “they sought certainty, efficiency, ease and support”.
Business operators didn’t want to know, for example, that a barista should get ‘107 per cent of c14 classification level’, Justice Ross explains.
“What they wanted to know was, what’s the hourly rate to pay at particular times, and they wanted a schedule for that purpose,” he said.
“They also wanted the award logically structured; so, for example, you deal with termination of employment at the end of the award not the beginning, and you group similar provisions together.”
Justice Ross says small business owners can expect to see revised awards, that have absorbed feedback such as this, by the first quarter of next year.