Ensuring that the salary provided to any employee, but
particularly a manager, can be difficult. This difficulty can result in
spectacular consequences as wave of sophisticated businesses that have failed
to meet minimum standards have demonstrated recently. From massive
retailers, to distributed franchise networks, it is clear that, despite their
capacity, many businesses have ended up with underpayments and breaches that
have arisen from sloppy salary practices including poor modelling and
lacklustre or even non-existent review of the modelling effectiveness.
The result is literally millions of dollars in underpayments, most of it to
managers. In light of the clear gap in understanding and practice, and
the coming prescriptive changes to many annualised salaries, ACAPMA is running
a series of Workshops to examine the failure points and to arm attendees with the
information and resources that they will need to ensure their modelling and
systems are up to scratch.
A salary, is an annual amount that has the intention of
providing a single payment that includes all of the elements that an employee
is entitled to (Base Rate, Loadings, Allowances, Penalties etc). This
single annual amount is then divided into 12, 26 or 52 increments according to
the businesses pay cycle (monthly, fortnightly, weekly). The process by
which the salary is set, and what is included in it is referred to as
“This is often the first failure point in salary
underpayment cases. If the initial calculations provide for 38 hours of
Day Shift at Base Rate, but the actual work is 40 hours, then the modelling has
failed and there will be an underpayment” explained Elisha Radwanowski,
Executive Manager for Employment and Training for ACAPMA.
“Modelling also often fails due to elements like allowances,
loadings or penalties being ‘forgotten’ or misapplied. One of the most
common elements missing from salary modelling is public holiday
treatment. The result is that if it is not included in the salary
modelling, then the employee should receive an additional payment when they
work a public holiday, failure to do so would result in an underpayment”
The aim of the salary, and the justification for its use, is
that the employee will be better off overall receiving the salary than they
would receiving the individual entitlement elements outlined in the relevant
Award/Agreement. Ensuring that the salary provided continues to do this
once the employee commences actually working, requires the modelling (or the
planned work and inclusions) to be compared to the reality (or the actual
hours, work and resultant entitlements).
“The recent cases have highlighted very clearly, that even
when the modelling is all encompassing and perfect on day 1, failure to
regularly review, not just the modelling of entitlements and inclusions, but to
compare the planned hours to be worked with the actual hours worked, can very
easily add up to disastrous underpayments” added Elisha.
“These pressures and expectations are not new. The
requirement for a salary to provide a situation where the employee is better
off overall than they would be receiving the individual elements of the
Award/Agreement is not new. In order to achieve this expectation, and
therefore avoid both breaches and underpayments, it has always been a
requirement to model salaries appropriately and review those models in a real
world setting” continued Elisha.
“The March 1 2020 changes to the Awards will result in very
detailed and clear requirements for businesses around modelling, communication
of modelling to employees, timesheet and record keeping requirements, the
requirement to review actual to modelled hours and pay any ‘make good’ payments
required within 14 days, as well as other specific requirements. These
changes will not effect all salaried staff, only those on the effected
Awards. However, the breaches and failures we are seeing now are not
about the changes, they are not about the select staff covered by the Award
changes, they are about the first principles of salaries being incorrectly, or
inappropriately applied and/or managed”.
“These most recent and public failures of large businesses
to meet these expectations, and the resultant breaches, should be a clear wake
up call to all businesses, regardless or size or industry, that if they are
paying any staff on a salary, that they need to immediately go back to first
principles, review their modelling to ensure that the employee is better off
overall and then put into place, and use, a system for reviewing the actual
hours worked to the modelling, to ensure that underpayments do not result”
ACAPMA recognises that the need to go back to first
principles, and the upcoming changes that will apply to some staff, means that
Members are seeking information and support in this area, as such a series of
Salary Workshops are being conducted, the details of which are below.
These Workshops are focused on ensuring that attendees leave with the practical
Guides and Tools, including; Checklists, Process Flows, Salary Calculators and
detailed Information Packs that will assist them in achieving compliant
ACAPMA Salary Workshop 2020
Sydney Tuesday, 7th April 2020
Brisbane Wednesday, 8th April 2020
Melbourne Thursday, 16th April 2020
Cost: FREE for ACAPMA Members, $99 inc GST for Non Members
To Register: Email the Location and Date as well as the name, phone, email and position of the persons you would like to register to: email@example.com . Location will be advised on confirmation of registration.
Note: The ACAPMA Salary Workshop 2020 will be run in conjunction with the Petroleum Contractor Qualification public Consultation Workshops, where petroleum contractors and operators will be called on to provide their feedback on the recently released Petroleum Contractor Competencies which are out for public comment. The two workshops will run back to back so operators will be able to attend both if desired.