A major survey of professionals in HR, published today by the Australian Human Resources Institute Ltd, confirms that the years 2005 to 2007 mark a period of significant change in the level of record keeping required by Australian employment law.
The highest percentage of those surveyed, 54.5%, rated the “level of record keeping” as the most significant change in those years.
Compliance by employers with employment law is simply no longer feasible with oral or mediocre records. The increased mandatory legal requirements for written records, consents and notices also mean that virtually no company or management team can rely on employment law templates and record keeping practices which pre-date Work Choices.
This dramatically changed reality is the outcome of Work Choices, ie the amended Workplaces Relations Act 1996 (Cth) and Workplace Relations Regulations 2006 (Cth). We argue this aspect of the law is a good thing.
Employment law record keeping obligations
For legal compliance they require use of the following minimum records:
- pay slips;
- records of time and wages;
- records of remuneration paid;
- records of the superannuation fund name and employer contributions paid;
- records of annual, personal or other types of leave accrual, leave taken and the balance due;
- records of the nature of the employment under which each employee is appointed, eg full-time or part-time and whether it is permanent, temporary or casual; and
- records of terminated employees – records of the manner of termination (eg by consent, by notice, summary), the termination notice date, the date of the last day of work, and the name of the person who acted to terminate the employment.
Further, for managerial best practice, add employment checklists, forms and organisational plans. If record keeping practices are driven by managerial objectives then it matters naught whether Work Choices legislation survives any change in government. Records are good for management.
Without appropriately updated documentation and systems, every employer faces not only the “strict liability” sting of court fines and court orders as well as exposure for a public relations blunder, but also failure to achieve higher-level outcomes. This is illustrated briefly below in the context of restraint of trade clauses in employment contracts.
How to comply with the obligations
To meet minimum record keeping legal requirements, our firm has customised the following legal documentation for several clients:
- Employment Details Form
- Bank Details Form
- Leave Application Form
- Leave Record Form
- Pay Slip (Salary-Based Employees)
- Pay Slip (Wage-Based Employees)
- Time and Wages Records (Weekly) Sheet
- Termination Notice Template
How to go beyond mere compliance and dazzle the competition!
We have also customised and integrated such forms for specific client business and management needs.
Are there benefits from this from a legal perspective? Definitely. Integration between legal and managerial documentation at the very least helps legal risk minimisation. Evidence for that is that integration requires drafting and design solutions to answer practical questions for each of the above types of forms, eg:
- Is the form easy to read, not overly visually busy, and hence confusing?
- Is the form’s design and layout OK for long periods of use on a computer screen?
- Is a common style and architecture used across the forms to speed comprehension?
- How likely is it that busy staff will input data into form fields with confidence?
The best question comes last:
- Will the form be understood and used to help achieve higher-level outcomes, eg:
- reduction in compliance time and costs,
- improved efficiency with paperwork as part of the solution not a problem, and
- workplace performance and productivity improvement.
Most new templates and forms for pay slips and leave records produced by Federal and State Government agencies exhibit astonishingly poor document design and layout. They are typically user unfriendly. They do not survive the scrutiny of the above tests or questions.
Being driven by the big picture produces substantial paybacks for employers. This arises when record making goes beyond the legal minimum and integrates managerial best practice. It’s then that records can dazzle the competition.
Here is an illustration. Take the case of an employer which decides to take court action seeking an injunction (a type of court order) to block a departing senior employee from joining a direct competitor and taking up a similar role to the one the employee is leaving. There continues to be a stream of such cases. It’s the era we live in.
In many cases that come before the courts the employer is hampered by its poor record keeping practices. In all cases the departing employee (often aided financially by the new employer or its legal team) attacks back, questions or is silent about the legal validity of his or her old employment contract’s non-competition or restraint of trade clause.
A constant legal lesson from these cases is that success is more certain for former employers who manage and document employment relationships and workplace records. Vigilance is essential. Woolworths, for example, had a hit in its 2004 case (the Olson case) but its 2007 sequel flopped (the Banks case). So what was different? The evidentiary records from Banks impressed the court to rule for him. It is noteworthy that in the sequel Woolworths relied on virtually the same standard in-house restraint of trade clause.
The injunction process in restraint of trade cases requires rapid access to credible records and documents. Without them cases fade to black. With them employers dazzle the competition with records.
Olson case: Woolworths Limited v Mark Konrad Olson & Anor  NSW SC 849
Banks case: Woolworths Ltd v Banks  NSW SC 45 (24 January 2007)