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Home > The Meaning of Compliance

The Meaning of Compliance

 


What does ‘compliance’ mean?

The essential elements of legal compliance for employers to meet their obligations under employment law are:

  1. Being informed sufficiently to know their responsibilities, rights and obligations;
  2. Allocating responsibility to nominated personnel within their business so that the relevant responsibilities etc are addressed and ‘driven’;
  3. Preparing and maintaining the appropriate documents (contracts, awards, agreements, policies and correspondence) that illustrate the genuine attempts of management to meet these responsibilities etc –a fundamental requirement of due diligence;
  4. Actually implementing the requirements of the law as reflected in the documents you have created/adapted as the ‘compliance portfolio’ of the company.

Why comply with the law?

Essentially employment law regulates the relationship between employer and employees. 

There are five principal reasons for employment law compliance:
  1. The law is enforced by a regime of sanctions that can result in monetary penalties and, in extreme cases, imprisonment.
  2. Civil action is available to employees and others who are victims of non-compliance.
  3. Businesses that meet the legal obligations exemplify good corporate governance and reap a consequential market advantage from having a positive corporate image.
  4. Failure to comply with employment law can result in physical and material injury and damage to employees (and sometimes, third parties).
  5. Employers that do not comply with the law may be unfairly advantaged in relation to law-abiding employers that actually spend time and money on compliance.
 
 
The Federal Workplace Relations System
 
A new employment regime commenced in Australia from 27 March 2006. Since that date, the Federal Workplace Relations Act 1996 introduced a new dominance of federal law over the states, and most importantly, awards are no longer ‘the floor’ for wages and conditions.

The Act regulates the employment of ALL employees of constitutional corporations. Employees (eg managers) who prior to 27 March 2006, were not previously covered by minimum conditions legislation are now covered.

Changes to the Act under the Labor Government

The new Federal Labor Government, elected on 24 November 2007, has passed legislation to amend the Act.

The amendments have the effect of:

  • ending the requirement to give employees a copy of the Workplace Relations Fact Sheet
  • ending the making or variation of AWAs
  • amending the rules for making, varying and terminating collective agreements
  • introducing a new form of individual agreement (ITEAs) with new rules - this provides an option for employers who have been using AWAs
  • amending the dates on which workplace agreements commence
  • setting up the award modernisation process - this has no immediate impact and does not require any change of practice
  • removing the ‘fairness test’ and replacing it with a ‘no disadvantage test’
  • permitting parties on pre-reform certified agreement or preserved state collective agreement to apply to the Australian Industrial Relations Commission (Commission) to extend the agreement for up to another 3 years or to vary it. The Commission must be satisfied that all parties genuinely agree to the extension or variation and that no industrial action was undertaken or threatened after13 February 2008. For variations the Commission must also be satisfied that the variation passes the no disadvantage test
  • extending the life of notional agreements preserving state awards until 31 December 2009.


Labor has indicated that it will introduce further legislation, which is expected to commence in 2010. While the detail of the legislation has not been released, it is expected that there will be changes to the Australian Fair Pay and Conditions Standard, unfair dismissal laws, availability of workplace agreements. There will also be the establishment of Fair Work Australia which is intended to be a ‘one stop shop’ to provide practical information, advice and assistance, to settle grievances and ensure compliance with the law.

The foreshadowed legislative changes are likely also to lead to changes in areas such as performance and misconduct, work/life balance, parental leave, recruitment, leave, and redundancy.

The focus of this website is providing help with the right documents to assist businesses to comply with employment law obligations. Step 3 noted above is critical to employment law compliance for employers.

Creating and storing documents does not of itself mean that a business is complying with the law. The other elements noted should be met. However, having the correct documents is a critical step to being compliant. A business cannot proceed on the path of compliance unless documents exist that map that path and create a frame of reference.

This website will enable you to create those necessary documents.
 
How to comply with employment law by focusing on the documents you create.
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