Fast Food Employers Confused on Employment Obligations

The recent wide-reporting of inadvertent award breaches by some fast food employers has thrown into vivid focus the highly complex industrial relations regime that has emerged under the Fair Work Act – despite it being meant to simplify employment obligations.

With a well-resourced and proactive Fair Work Ombudsman regularly auditing QSR employers, many in the industry are finding it difficult to comply with employment laws despite their best efforts. QSR Media recently reported on comments from Mark Lindsay, CEO of QSRH, that “We’ve got our franchisees looking for advice all the time. We’re trying to provide them leadership and direction and we can’t even do much about it.”

A key aspect of the complexity is caused by the “modernised” awards implemented by Fair Work Australia. A new Fast Food Award was created by FWA under the award modernisation process, which reduced 4500 state and federal awards down to 122. However, rather than have all employees and employers in the industry have a single set of rates, the new rates and penalties are transitioning in over the 4 year period finishing 1 July 2014.
Which particular set of rates and penalties applies depends on factors such as when an employers’ business started employing under the award, what state or territory the business is operating in, what obligations applied to the previous owner, and whether employees transferred as part of the purchase of a business from a previous operator.

Employee relations consultancy ER Strategies, a regular contributor to QSRMedia, says that government provided tools to help businesses calculate wages and penalty rates are themselves confusing. ER Strategies’ Director Steve Champion told QSRMedia that, “Because the Fair Work Ombudsman (FWO) is dealing with every possible combination of employer across Australia, their tools have to be complex. Our experience is employers just want simple information and not have to interpret awards and classification structures to get there.”

10 basic employment entitlements under the National Employment Standards (NES) also came in under the Fair Work Act on 1 July 2009. Champion says these weren’t wildly different to the minimum standards under the previous Liberal Government’s Work Choices, but there are some important differences in the details. “The NES introduced national redundancy standards for all employees in the federal system, although even these are subject to some transitional protections for higher standards that applied under state NAPSAs.”

“Whilst they continue to change employment laws, fortunately for us consultants we will continue to thrive. Employers just want someone to tell them what they have to do. It is just one aspect of their business, and an expensive one at that. They want answers, not complexities”.

The Fair Work Act is due to be reviewed by a panel of 3 appointed by new IR Minister, Bill Shorten. The panel - Reserve Bank board member John Edwards, former Federal Court judge Michael Moore and Sydney University Emeritus Law Professor Ron McCallum - is due to report to the Government by May 31 this year. However, the Minister has downplayed hopes of significant changes in the laws, describing the review as a "10,000 kilometre road check" looking at "what we consider to be a robust system".

He continued that "I think that we do have a strong system, but like all systems it needs a check to make sure that its working as it should." Submissions to the review panel have been invited and need to be lodged by Friday, February 17.

Read related article here: Hungry Jack's Apologizes to Bendigo’s Underpaid Employees

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