For any line of work first and foremost thing that needs to be addressed after the acquisition of employment is to bargain the terms for employment contract. Employer holds the right to acquire the best possible human resource that is available to him. Employee on other hand holds the right to be compensated in dignified manner for his services. But will it remain the same as it was agreed upon the time you were hired. It’s an ever changing world now, business mergers and acquisitions are happening in abundance. And in situations like these first thing the buyers need to address is the employee contracts as they are liable to the current and previous employers.
For a prospective buyer it is imperative to gain the knowledge and worth of the asset he is going to bid for. And that includes the human resource as well which forms the building block of any organization. In due course of accessing review of existing Confidentiality agreements, employee agreements and other documents that intend to insure property rights of the organization. Being a seller employer must get all the employee contracts up to date.
Check these employee records are up-to-date before selling a business:
What if there is a change in law regarding employee contracts
In Australia in recent years, workplace legislation has been an ever changing area of the law and with the introduction of Fair Work Act 2009 and employment changes for 1 January 2010, employee contracts are bound to be updated. This act applies to all “national system employers” this means all Australian businesses who are an incorporated entity and are actually trading. This act includes two major changes in the shape of 10 National employee standards and new modern awards. New modern awards provide a minimum set of conditions which apply to workers in certain industries in addition to the 10 NES. If the Award provides for higher conditions than a NES then the Award will override that particular NES.
If you employ staff using Common Law Contracts the new changes will only effect the minimum entitlements which you must provide. You may still use Common Law Contracts; however these should only be used if you are providing entitlements which are above the Award or if there is no applicable Award for the employee’s role.
Following are the new changes that will be incorporated
Standard weekly work hours
A worker will work maximum of 38 hours in a week time over a period of 26 weeks. Overwork will only be allowed pertaining to following reasons
If you are a parent or guardian of a child or you’ve completed a year in the organization, this entitles you to place a request to your employer for manageable work shifts or work location which suits you best. This also implies in case of a disability.
But employers also hold the right to dismiss the request on following grounds
Both parents can take up to 12 months unpaid leave following the birth or adoption of a child, although not at the same time. It also allows one parent to request to extend their leave period by a further 12 months.
Any request must be made at least 4 weeks prior to the end of the original leave period. The employer is bound to agree to any request unless ‘reasonable business grounds’ exist for refusal.
ANNUAL LEAVE
PERSONAL/CARERS LEAVE AND COMPASSIONATE LEAVE
Each employee is entitled to 10 days paid personal/carer’s leave plus 2 days unpaid carer’s leave if required; sick leave is a form of personal leave. Each employee is also entitled to 2 days paid compassionate leave, compassionate leave is unpaid for casual employees.
Some Awards may allow for the ‘cashing out’ of these leave entitlements.
COMMUNITY SERVICE LEAVE
Community services leave includes both jury service and any ‘voluntary emergency management activity’. All community services leave is unpaid with the exception of jury service which has an entitlement to 10 days paid leave for employees excluding casual employees.
There is no limit to the amount of community services leave which can be taken by an employee however the amount must be ‘reasonable’.
LONG SERVICE LEAVE
The long service leave NES is still being finalised by the government, until a uniform system is developed the existing state legislation still applies.
PUBLIC HOLIDAYS
An employee is entitled to payment for not working on a public holiday only if their normal working routine falls on the public holiday, a part time employee who’s regular hours do not fall on a public holiday is not entitled to payment for that particular day.
Employers may request that an employee work on a public holiday and the employee may refuse, both the request and the refusal both need to be ‘reasonable’. ‘Reasonable’ is determined in the same manner as for requests to work additional hours.
NOTICE OF TERMINATION AND REDUNDANCY PAY
On the day of termination employers must provide an employee with a written notification regarding their termination. In the event of redundancy the NES sets out a minimum amount of redundancy pay which is required to be given by an employer, in some cases the Modern Award may set out a higher amount. But Employers with fewer than 15 full time staff are exempt from the requirement to pay redundancy to staff members who are terminated for genuine redundancy reasons.
Further provisions
Each Modern Award contains a number of provisions which apply to the employee in addition to the 10
National Employment Standards, these provisions relate to;
For a prospective buyer it is imperative to gain the knowledge and worth of the asset he is going to bid for. And that includes the human resource as well which forms the building block of any organization. In due course of accessing review of existing Confidentiality agreements, employee agreements and other documents that intend to insure property rights of the organization. Being a seller employer must get all the employee contracts up to date.
Check these employee records are up-to-date before selling a business:
- Tax (PAYG,FBT etc.)
- leave (long service, personal, parenting)
- Work Safe
- Retirement
- Trainee agreements
- Probation or training records
- Performance reviews, if any
- Personal contact details.
What if there is a change in law regarding employee contracts
In Australia in recent years, workplace legislation has been an ever changing area of the law and with the introduction of Fair Work Act 2009 and employment changes for 1 January 2010, employee contracts are bound to be updated. This act applies to all “national system employers” this means all Australian businesses who are an incorporated entity and are actually trading. This act includes two major changes in the shape of 10 National employee standards and new modern awards. New modern awards provide a minimum set of conditions which apply to workers in certain industries in addition to the 10 NES. If the Award provides for higher conditions than a NES then the Award will override that particular NES.
If you employ staff using Common Law Contracts the new changes will only effect the minimum entitlements which you must provide. You may still use Common Law Contracts; however these should only be used if you are providing entitlements which are above the Award or if there is no applicable Award for the employee’s role.
Following are the new changes that will be incorporated
Standard weekly work hours
A worker will work maximum of 38 hours in a week time over a period of 26 weeks. Overwork will only be allowed pertaining to following reasons
- Risk to the employee’s health and safety.
- Additional monetary needs or rewards for overwork.
- Employing entity need.
- Amount of notice given by employer.
- Nature and need of employee’s role.
- Situation related aspects.
If you are a parent or guardian of a child or you’ve completed a year in the organization, this entitles you to place a request to your employer for manageable work shifts or work location which suits you best. This also implies in case of a disability.
But employers also hold the right to dismiss the request on following grounds
- Negative impact on the finances, efficiency, productivity or customer service of the business.
- Inability to recruit a replacement employee.
- Practicality of arrangements which need to be put in place to accommodate the employees ‘request.
Both parents can take up to 12 months unpaid leave following the birth or adoption of a child, although not at the same time. It also allows one parent to request to extend their leave period by a further 12 months.
Any request must be made at least 4 weeks prior to the end of the original leave period. The employer is bound to agree to any request unless ‘reasonable business grounds’ exist for refusal.
ANNUAL LEAVE
- For full time employees are entitled to 4 weeks annual leave for each 12 month period of service.
- For Shift workers an additional 1 week of annual leave making their total entitlement 5 weeks for each 12 month period of service.
PERSONAL/CARERS LEAVE AND COMPASSIONATE LEAVE
Each employee is entitled to 10 days paid personal/carer’s leave plus 2 days unpaid carer’s leave if required; sick leave is a form of personal leave. Each employee is also entitled to 2 days paid compassionate leave, compassionate leave is unpaid for casual employees.
Some Awards may allow for the ‘cashing out’ of these leave entitlements.
COMMUNITY SERVICE LEAVE
Community services leave includes both jury service and any ‘voluntary emergency management activity’. All community services leave is unpaid with the exception of jury service which has an entitlement to 10 days paid leave for employees excluding casual employees.
There is no limit to the amount of community services leave which can be taken by an employee however the amount must be ‘reasonable’.
LONG SERVICE LEAVE
The long service leave NES is still being finalised by the government, until a uniform system is developed the existing state legislation still applies.
PUBLIC HOLIDAYS
An employee is entitled to payment for not working on a public holiday only if their normal working routine falls on the public holiday, a part time employee who’s regular hours do not fall on a public holiday is not entitled to payment for that particular day.
Employers may request that an employee work on a public holiday and the employee may refuse, both the request and the refusal both need to be ‘reasonable’. ‘Reasonable’ is determined in the same manner as for requests to work additional hours.
NOTICE OF TERMINATION AND REDUNDANCY PAY
On the day of termination employers must provide an employee with a written notification regarding their termination. In the event of redundancy the NES sets out a minimum amount of redundancy pay which is required to be given by an employer, in some cases the Modern Award may set out a higher amount. But Employers with fewer than 15 full time staff are exempt from the requirement to pay redundancy to staff members who are terminated for genuine redundancy reasons.
Further provisions
Each Modern Award contains a number of provisions which apply to the employee in addition to the 10
National Employment Standards, these provisions relate to;
- Minimum wages.
- Types of employment (e.g. Full-time, Part-time and casual).
- Overtime and penalty rates.
- Work arrangements (e.g. rosters and variations to work hours).
- Annualized wage or salary arrangements.
- Allowances (e.g. travel allowances).
- Leave, leave loading and taking leave.
- Superannuation.
- Consultation procedures.
- Dispute settlement and representation.
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