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David Bates
+ About David Bates

David is the Managing Director of Workforce Guardian where he provides a wide range of strategic, practical and plain-English advice to Australian business owners and operators. He is deeply committed to assisting employers and is a passionate advocate of competition and free-enterprise.

David gained his BA (Government) from the University of Queensland in 1998 before going on to complete a Law degree, with Honours, in 2001. He began his career working for a large, blue-collar union before moving to Canada and then the United Kingdom where he was employed by both the Commission for Racial Equality and the UK Equality and Human Rights Commission.

David routinely represents employers in Fair Work-related proceedings and can assist with every aspect of employment relations compliance. David is also an accomplished and highly sought-after public speaker who facilitates dynamic, informative and highly interactive workshops on all aspects of industrial relations best-practice.

He is proud to lead a highly-qualified team of ER, HR and Technical professionals at Australia’s leading, online employment relations service.

5 things on the small business wish list for 2017

Wednesday, January 11, 2017

By David Bates

Well my fellow small business owners, here we are at the start of a brand new year in a country which is allegedly led by a federal government that claims to favour small government, less red tape, innovation and free enterprise.

Put simply, ours should be one of the best places in the world to run a small business and we should all be feeling ‘there’s never been a more exciting time to be a small business owner’.

Are you feeling it? C’mon, are you excited?

Chances are you’re not, and you’re not alone.

Despite all the big promises made to small businesses by this government – and despite all the pro-small business rhetoric we hear in Question Time and in government press releases – now’s a terrible time to be a small business owner here in Australia.

So, for what it’s worth, here’s a list of the things I’d like to see the Government do for small business in 2017:

Wish One

Promise that - unlike her predecessor - the current Fair Work Ombudsman (FWO), Natalie James, won’t be appointed to the Fair Work Commission once her current five-year statutory appointment ends next year.

On her watch, the FWO has comprehensively failed its vital remit and become entirely unfit for purpose. 

Wish Two

Appoint new Fair Work Commissioners who have actually run small businesses themselves.

We need greater diversity in the background and life-experiences of those we appoint for life to the Commission. Trade unionists and career public servants certainly have a valid role to play, but small business lacks fair and equal representation at the Commission.

Wish Three

Cut business tax rates.

The USA is going to reduce corporate tax rates from 35% to 15%. If we don’t take urgent steps now to remain competitive, capital, jobs, and opportunity for Australian small businesses will flow out of our country across the Pacific.

Wish Four

Create a Modern Award specifically for small businesses.

Let’s face it, the vast majority of small business owners still don’t understand the Modern Award system, despite it having been in operation for more than six years.

Fact: simpler laws result in increased compliance.

If we want small business owners to comply with Modern Awards, let’s create one specifically for businesses with fewer than 15 employees … and let’s ensure it provides the flexibility they so-desperately need.

Wish Five

End the partisanship around workplace relations.

You can be pro-small business without being ‘anti worker’. You can negotiate fairly with law-abiding unions while being critical of union corruption. And you can respect small business owners while still legitimately criticising those employers who flagrantly break the law and rip off their workers. This is the message our government should be delivering to every employer, employee and union.

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Christmas closure confusion

Tuesday, December 20, 2016

By David Bates

Most Australian businesses close down for at least part of the Christmas/New year period, however, very few employers take the time to carefully review their legal obligations before confirming arrangements with their employees.

This in turn can lead to serious breaches of applicable Modern Awards, and even potential back payments and penalties being imposed.

Confusion regarding employee entitlements during annual shut downs is a consequence of the complex rules imposed by many of the 100+ industry and occupation-based Modern Awards which currently apply across the country.

Here are just some of the key points Fair Work-covered employers should keep in mind if they’re planning to shut down this Christmas:

  • Full-time and part-time employees often need to be paid their usual wage/salary during Christmas shutdowns. Specific rules may also be imposed by any applicable Modern Award(s) or Enterprise Agreement(s). 
  • In some cases, employees can be asked to take annual leave during the Christmas shutdown. However, if an employee is covered by a Modern Award or an Enterprise Agreement, you can only direct the employee to use their annual leave during the shutdown if this is expressly permitted by that Award or Agreement. 
  • If an employee is not covered by a Modern Award, they can be directed to take annual leave only if that direction is ‘reasonable’ in the circumstances.
  • If an employee doesn’t have enough accrued annual leave to cover the entire shut-down period, you may be required by an applicable Modern Award or Enterprise Agreement to offer them paid annual leave in advance.

However – and even more confusingly – many employees have the legal right to decline annual leave in advance, and in this case the employee may become entitled to receive their usual wage/salary for the entire period.

  • Many Modern Awards require the employer to provide their employees with a minimum period of advance notice before a shut down. Failing to provide notice when it’s required can invalidate the employer’s request, and result in all employees being entitled to payment as usual.

Confused yet?!

Sadly, unless and until someone (anyone!) fixes this mad array of overlapping rules and regulations, Australian employers will continue finding themselves on the receiving end of complaints and penalties once the Christmas spirit fades for another year.

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Industrial relations in 2016: the good, the bad and the ugly

Wednesday, December 14, 2016

By David Bates

Well here we are, just two weeks away from the end of another calendar year.

As our federal politicians return to their constituencies and most (but certainly not all) businesses begin to wind down, it’s timely to look back and see what was – and wasn’t – achieved on the industrial relations front in 2016.

First - the good news.

The two rejected bills which took us to an unexpected double dissolution election – the Registered Organisations legislation and the law re-establishing the Australian Building and Construction Commission (ABCC) – were both finally approved by the Senate.

AAP

Sadly, that’s where the good news ends. Because while the Registered Organisations changes were long-overdue, the ABCC legislation was significantly weakened by amendments which rewarded big construction firms like Lendlease that signed up to union-friendly Enterprise Agreements despite knowing full well that a new – and much tougher Code –  was on its way.

Instead of holding these companies and the CFMEU to account, the government allowed a two-year lead-in period, meaning when they lose the next election and Labor is returned to power, all this hard work will ultimately have been for nothing.

This from a government which claims to support free enterprise and oppose union thuggery. Go figure.

More bad news came our way in the form of the 7-Eleven wages scandal. As events unfolded, we discovered it wasn’t just dodgy employers who were ripping off employees. It turns out that plenty of well-meaning employers were unintentionally underpaying their employees due to genuine confusion about the world’s most hopelessly complex employment laws.

This year, we also discovered Coles had signed an Enterprise Agreement with one of the nation’s largest unions – the SDA – which resulted in more than 30,000 mostly part-time and casual employees losing some of their penalty rates to help fund wage increases for those full-time employees who more likely to be union members.

AAP

This Agreement should never have been approved by the Fair Work Commission in the first place, and it took a lot of time – and many angry employees – to finally have it overturned. Remember this case the next time you hear a union claim that it supports penalty rates.

And last but not least, 2016 was the year that gave us the embarrassing spectacle that was the long-overdue resignation of Fair Work Commission Vice-President, Michael Lawler. His departure finally concluded a saga which has caused immense damage to the Commission’s reputation.

Here’s hoping 2017 is a better year for Australia’s employers and its honest, hard-working employees.

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How the FWO let you down … again

Wednesday, December 07, 2016

By David Bates

In February this year, the team here at Workforce Guardian became aware of a competitor signing up new customers by implying their service was either endorsed by - or somehow linked to - the Fair Work Ombudsman (FWO). 

It was a clever strategy, which generally involved one of two cleverly designed sales tactics. 

The first sees them cold-calling employers and introducing themselves as being from ‘Fair Work’. Because this is a generic term (as opposed to the ‘Fair Work Ombudsman’ or the ‘Fair Work Commission’) they get away with creating the false impression they are calling from one of these two official government agencies.

They then ask the employer for a meeting to discuss their potential non-compliance with Australian employment laws. The hapless employer – concerned about their potential liabilities – agrees to meet with ‘Fair Work’. 

A short time later, a representative from a private HR business arrives at the workplace, as agreed. They confirm they have been sent by ‘Fair Work’ and, at the end of the ‘meeting’, the employer is asked to sign an expensive, multi-year subscription (including insurance) which will give ‘complete peace of mind’. Thinking the service is endorsed by the Commonwealth Government, the employer signs on the spot.

The second strategy involves operating a number of generic ‘Fair Work Information Lines’, which employers mistakenly call instead of the official Fair Work Infoline operated by the FWO. 

After callers have received some preliminary advice (sometimes given by unqualified and inexperienced ‘consultants’) they are offered an introduction to an HR service which is recommended by ‘Fair Work’. 

These practices are scandalous.

When we began hearing from frustrated employers who felt they had been misled, we immediately contacted the FWO. We expected they’d put out a press release or, at the very least, publish a generic message on their web site reminding employers that the FWO does not endorse any private HR business.

But they didn’t. 

And for the last nine months we have been contacted by countless employers who have signed up to an HR service under the genuine – but completely mistaken – belief that it was recommended or endorsed by the FWO. 

These employers are understandably appalled, disappointed and very angry. And so are we.

While we have no doubt the FWO made their concerns known to the company involved and took steps to have them change their ways, there’s also no doubt they did absolutely nothing to warn the public about their deceptive and misleading conduct. 

As a result of the FWO’s public silence, hundreds – perhaps thousands – of employers have signed multi-year contracts with the company in question.

If only the FWO would spend as much time, energy, and tax-payer’s money assisting employers as they do prosecuting them. The FWO has, once again, let every law-abiding employer down very badly.

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Australia's "forgotten" working class

Wednesday, November 30, 2016

By David Bates

The election of Donald Trump has commentators scrambling to understand the so-called ‘silent majority’ or, as we misleadingly call them here, the ‘forgotten people’.

The conclusion being reached by commentators across the political spectrum is that Trump was elected by an aggrieved American working class who were tired of being forgotten. These commentators accordingly argue Australia’s own working class must have been forgotten too.

Take last weekend’s edition of the Weekend Australian for example. The paper’s front page focussed on an unemployed couple with ten children who were (unsurprisingly) struggling to make ends meet. These are, apparently, Australia’s ‘forgotten people’. 

Really? 

To compare that family to America’s own working class appears rather misleading to me. After all, America’s working class employees don’t accrue a minimum of four weeks of annual leave (or receive a generous ‘casual loading’ in its place).

They also don’t get paid one of the world’s highest minimum wages. They don’t have a union-dominated Fair Work Commission to interfere in virtually every aspect of their employers’ businesses. And they certainly don’t have access to one of the world’s most generous social security regimes and universal (and free-at-the-point-of-delivery) health care systems.

I don’t believe an unemployed Australian couple with ten children is ‘forgotten’ at all. In contrast, they are ‘remembered’ by Medicare and Centrelink. They are ‘remembered’ by the Australian Council of Social Services (ACOSS). They are remembered at every state and federal election when our screens are filled with ads promising child care rebates and family tax benefits, and much, much more for all ‘working families’.

To be clear, I’m not for one second suggesting life isn’t tough for an unemployed family of 12, but it’s nowhere near as tough here in Australia as it is in the US, and I think it’s misleading to conflate Australia’s working class with their American counterparts who voted for Donald Trump.

In my opinion, Australia’s true ‘forgotten people’ are its hundreds and thousands of small business owners. You know, the men and women who employ the vast majority of Aussies, who get up before dawn and go to bed after midnight.

The ones who make sure every employee and every invoice is paid before they pay themselves. The ones who help secure the retirement of millions by paying compulsory superannuation contributions, and who aren’t accruing any paid annual leave or sick leave no matter how hard they work.

The same ones who are promised support during every election, but who are then abandoned by governments of both sides of politics who find it expedient to praise small businesses during campaigns but then paralyse them with regulation and red tape once they’re elected.

Looking for a ‘forgotten person’? You’ll find them running your local small business.

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Competition and free enterprise … in the union movement?

Wednesday, November 23, 2016

By David Bates

Regular readers of this column will know I’m not big fan of those corrupt, law-breaking, and self-indulgent trade unions which regularly dominate the IR debate.

That’s why I was pleased when then Fair Work Commission finally overturned a dodgy Enterprise Agreement made between the SDA (one of the largest and most self-indulgent unions in the country) and Coles.

That Agreement, as we now know, should never have been approved by the Fair Work Commission in the first place. Why? Because it quite clearly failed the ‘Better Off Overall Test’ (‘BOOT’) imposed by the Fair Work Act.

What did the Agreement involve?

The Agreement resulted in approximately 40,000 mostly part-time and casual Coles employees (those least likely to be SDA members) having their penalty rates cut to pay for better increases for full-time employees (those more likely to be SDA members).

It’s worth emphasising here that the only people ‘stripping away’ penalty rates in modern-day Australia under the Fair Work Act are unions. Not employers. Not the Liberal Party. Just unions. Like the SDA.

Retail and Fast Food Workers Union

Now, competition and free enterprise have come full circle with the recent launch of a new trade union specifically aimed at those employees who feel they’ve been ripped-off and let down by the SDA. It’s rather (unimaginatively) called Retail and Fast Food Workers Union (RFFWU).

Their website calls unapologetically for the restoration of penalty rates for employees working in those businesses who were ‘sold out’ by the SDA: Woolworths, Coles and many more.

It’s not too often I find myself agreeing with a trade union, but I wholeheartedly endorse this one’s call for unions to stick to their core job of looking after their members, instead of trying to negotiate questionable agreements and then relying on their union brand to ensure they’re (wrongly) approved by the Commission.

The bottom line

Neither the SDA nor the Australian Council of Trade Unions (ACTU) have a clue how to deal with this new union. The SDA is desperately trying to paint them as untested and unqualified, while the ACTU tries to pretend they don’t exist at all.

And let’s remember, all this ‘disruption’ has been caused by a union with a tiny membership and just two office holders listed on their website.

Fair competition is a beautiful thing.

 

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Trump and the not-so-silent majority

Wednesday, November 16, 2016

By David Bates

I’ve been confidently predicting a Trump presidency for the past six months or so, and I’ve endured scoffing and ridicule for roughly the same amount of time!

My confidence in a Trump win grew every time I heard a commentator announce he was ‘unelectable’, or read social media posts arrogantly dismissing everyone voting for him as a ‘racist’.

In fact, I was so confident he’d win I booked a trip to Washington DC so that I could be there to watch the results come in on election night. And so it was, wine glass in hand, that I saw all my predictions come true: a Trump presidency, a Republican-controlled Congress and a shell-shocked and desperately out-of-touch elite lost for words.

Now friends are asking me “how did you know?”. The answer is simple: the so-called ‘silent majorities’ in Western nations around the world have grown so tired of being ignored and let down that they’ve decided not to remain silent anymore. Not for one more minute, and certainly not for another four years.

Brexit 2.0

Anyone who followed the Brexit referendum in the UK should have been easily able to predict a Trump victory in the US. People are just no longer persuaded by the elder statesmen and stateswomen of major parties, or by out-of-touch political commentators. And they’re certainly not persuaded by billionaire celebrity endorsements.

People ask me: “aren’t you offended by Trump’s comments and past behaviour?’. The answer is yes, but I’m far more offended by politicians who promise to help small business owners but then do nothing for them when they’re elected.

Friends say: “surely Trump’s simplistic answers to complex questions cause you concern?’. Yes, they do. But I’m even more concerned by unelected bureaucrats at the Human Rights Commission doing their best to stifle freedom of expression, and by our politicians doing nothing about it.

Readers ask: “Doesn’t Trump’s world view alarm you?’. Yes, it does. But I’m far more alarmed to live in a country where a Vice President of the Fair Work Commission can take 11 months of fully-paid sick leave on a tax payer-funded salary of over $400,000 p.a and spend that time helping his partner (unsuccessfully) escape conviction for stealing union members’ money!

The bottom line

At the end of the day, both Trump’s victory and the vote for Brexit were obvious to me and many (millions of) others who have grown weary of the ‘business-as-usual’ approach taken by our politicians. That approach consistently fails those who work hard, those who run businesses, those who employ others and those who respect the rule of law.

What’s next?

My next prediction: the Coalition will be defeated at the next election – and minor parties such as One Nation will surge – unless Malcolm Turnbull and his cabinet stop ignoring and start listening to the now not-so-silent majority. 

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Paying your employees annual salaries? Read this.

Wednesday, November 09, 2016

By David Bates

I have previously written (many times) about the incredible complexity of Australia’s workplace relations laws, and the difficulty many employers encounter interpreting and applying the 122 Modern Awards to their own employees.

More often than not, employers tell me they ignore the applicable Modern Award because they ‘pay employees a salary which includes all the Award entitlements’. When I then try to explain just how risky this approach is under Australia’s unique Fair Work system, many employers assume we’re exaggerating the danger.

I accordingly encourage those same employers to read the recent decision of the WA Industrial Court in Simone Jade Stewart v Next Residential Pty Ltd. 

In this case, the employee was covered by the Clerks-Private Sector Award 2010, and paid an annual salary of $78,000. The employer had issued the employee with a contract which confirmed the salary was intended to include all entitlements which might otherwise be payable under an applicable Modern Award. 

The highest classification level for a traditional clerical employee under this particular Award is ‘Level 5’, with a corresponding minimum weekly wage of $904. This equates to an annual salary of $47,008. 

So, if we exclude annual loading and any penalty or overtime rates which might apply, the employee in this case was being paid a salary which was almost $31,000 more than their minimum legal entitlement. All good, right? 

Wrong. Because the employee has been given permission to pursue the employer for alleged underpayments.

As our team has been telling employers for more than six years now, paying an Award-covered employee an annualised salary is inherently risky, in part because many Awards impose very strict rules about annualised salaries.

In this case, clause 17.1 of the applicable Award states (my emphasis added):

(a) An employer may pay an employee an annual salary in satisfaction of any or all of the following provisions of the award: 

(i) clause 16—Minimum weekly wages; 

(ii) clause 19—Allowances; 

(iii) clauses 27 and 28—Overtime and penalty rates; and 

iv) clause 29.3—Annual leave loading. 

b) Where an annual salary is paid the employer must advise the employee in writing of the annual salary that is payable and which of the provisions of this award will be satisfied by payment of the annual salary. 

Given the wording inserted in the employee’s contract here, it’s clear the employer failed to comply with clause 17.1 of this Award. As a result of this serious breach – and despite the employee being paid at least $31,000 more than the Award wage -  the WA Industrial Relations Court has given the employee permission to pursue an underpayment of wages claim relating to overtime and meal breaks. 

Still think we’re exaggerating the risks created by non-compliance with Awards? We hate to say we told you so, but …

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A tale of two countries

Thursday, November 03, 2016

By David Bates

This week I’m writing my post from the US, where I’m (trying!) to holiday with family.

While on the road here, I’ve gone out of my way to have as many conversations as I can with the staff I meet at hotels, car rental counters and airports. I find it fascinating to compare and contrast the experiences and attitudes of Australian and American employees.

Take for example, Lynda, the waitress who served us drinks at a hotel bar in Detroit. She explained that, as a tipped employee’ , she receives the state’s minimum wage of US$3.23 per hour. Yes, US$3.23.

She also explained there were no such things as penalty rates’ or overtime’ for employees like her in Michigan – she gets the same flat rate regardless of when she works or how many hours she puts in.

She almost fell over in disbelief when I explained an employee doing an equivalent job in Australia is entitled to a minimum wage of at least US$14.97 (A$19.56) per hour. And she thought I was making up the concepts of time and a half’ and double time’ just to stir her up.

I then discovered she receives no paid sick leave or accrued paid annual leave (neither is required by state law). Imagine her surprise when I explained Australian employees receive a guaranteed 4 weeks of annual leave per year and 10 paid personal/carer’s leave days.

After realising employees in Australia earn roughly four times her minimum wage (without tips of course) and receive (comparatively) exceptionally generous leave entitlements, Lynda asked: What about health care – how much do Australian employees pay for that? ’. My answer, 2% of their taxable income because we have a universal health care system’ was, frankly, the final straw.

‘Australian workers must be exceptionally happy!’ she proclaimed. They must provide incredible customer service and be unbelievably content with all they have . Your unions must be hugely popular, and workers must want to work all the time!’.

If Lynda wasn’t already in shock, she certainly was after I explained Australian unions consistently encourage a sense of discontent and entitlement. And that they regularly complain about what are, surely, some of the world’s most pro-employee labour laws. And that most Australian employees take for granted the incredibly generous entitlements (including a 9.5% compulsory contribution by their employer towards their own retirement!) which are guaranteed by law.

As we parted ways, my friendly bar tender let me in on two little secrets: although her minimum wage is just US$3.23 per hour, with tips she often makes more than US$40 an hour. And she works all the hours she can because she’s realised the harder she works, the easier it is to get ahead and make a good life for her and her son.

In an ideal world- in the kind of Australia I’d like to see – we’d find a way to fuse Lynda’s passion to succeed with a clear and easily-understood set of minimum employment entitlements which protect all workers. Then, at last, we could finally part ways with the union-dominated and ridiculously-complex employment laws which continue to prevent every one of us – business and employee alike - from reaching our full potential.

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Time to treat employers and employees like grown-ups

Wednesday, October 26, 2016

By David Bates

No other developed country on Earth has an industrial relations system as complex as our own. Overseas-based employers regularly gape in disbelief when I explain our system of modern wards, national employment standards, unfair dismissal provisions and enterprise agreement-making processes.

Imagine their complete inability to comprehend the lack of will on either side of politics to make any meaningful changes to this extraordinary mess. And imagine how quickly they decide not to invest in Australia once they realise the extraordinary and disproportionate power wielded by this country’s unions.

Now, if you think I’m exaggerating the complexity of our nation’s employment laws, here are some examples which should put my assertion beyond doubt.

Imagine you run a salon and would like to engage a casual just for one or two hours each afternoon. A high school student responds to your ad telling you they’re keen to gain some work experience before they leave school. A classic win-win right? Wrong.

Because under the Hair and Beauty Industry Award, it’s unlawful for you to engage a casual for fewer than three hours’ at a time. Apparently, the Government and the relevant union (the SDA) know how to run your business better than you do.

Now imagine you’ve decided to introduce an enterprise agreement to finally free yourself from the seemingly endless constraints imposed by your modern award. You follow the entire process from start to finish – investing considerable time and effort - and your employees unanimously vote in favour of the new Agreement.

The only problem is that when you initiated the bargaining process, you inserted the wrong phone number on the ‘Notice of Employee Representational Rights’. Thanks to a stream of decisions handed down by the Fair Work Commission, you’ll soon discover this means your Agreement will be rejected and you’ll have to start the entire process again … from scratch. Who loses out because of this bizarre but incredibly common situation? Everyone.

And right when you think things couldn’t get any worse, you catch an employee stealing money straight from the till. You even have CCTV footage to prove it. So you dismiss them on the spot for serious misconduct. All good, right?

Sadly, no, because the Fair Work Act requires you to provide the employee with an ‘opportunity to respond’ before you confirm their dismissal. Your failure to adhere to this strictly-enforced obligation, despite having caught the thief red-handed, means they’ll now have a strong case for ‘unfair dismissal’.

But don’t worry too much, because you’re likely to then become one of roughly 85% of employers who decides to pay the employee ‘go away’ money to settle the claim during conciliation.

I’m all for a guaranteed safety net of minimum workplace entitlements, but surely we can simplify things a little and treat employers (and their employees) like grown-ups.

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