Compliance crackdown

In the past couple of months, there has been a noticeable increase in compliance and enforcement activity by the Fair Work Ombudsman (FWO) with a clear focus on underpayments. This is part of a compliance crackdown by FWO aimed at ensuring Australian employers are meeting their workplace relations obligations. FWO has urged employers to check that they are paying their employees correctly.

Focus on underpayments

There have been new cases of underpayment in the health industry. FWO recently reported that it took legal action against an employer for failing to comply with the Health Professionals and Support Services Award 2010 (HPSSA). This Modern Award covers many employees who work in private medical practices, including health practitioners, receptionists and secretaries. In this case, the employer underpaid the employee over a two-year period by failing to pay minimum rates of pay, Saturday rates, overtime rates and public holiday rates. The employer failed to comply with a Compliance Notice issued by FWO and was ordered to pay a penalty of $5,355 and back-pay of $32,889, plus interest.

There have been other more high-profile cases of underpayment, including the recent George Calombaris underpayment scandal. In this case, FWO investigated the major Melbourne restaurant company founded by Calombaris after the company had self-disclosed underpayments. FWO found significant underpayments as a result of employees working hours that were not adequately compensated by annualised salaries and employees not being paid at the correct classification level under the applicable Modern Award. The company back-paid over $7.8 million to current and former employees and entered into an Enforceable Undertaking requiring the company to pay a penalty of $200,000 and take stringent measures to avoid future underpayments. You may be wondering why a decision in the restaurant industry is relevant to your medical practice or the health industry generally. FWO has indicated that this massive back-payment bill should serve as a warning to all employers, without limitation.

What are your obligations?

To avoid being caught up in FWO’s compliance crackdown, we recommend you review your workplace relations obligations.

When it comes to employees in private medical practices, most employees will be covered by either the HPSSA or the Nurses Award 2010. These Modern Awards set out minimum terms and conditions of employment on top of the National Employment Standards. Modern Award entitlements include minimum rates of pay, hours of work, rosters, breaks, allowances, penalty rates and overtime.

As an employer, you must comply with Modern Award entitlements or face penalties under the Fair Work Act 2009 (Cth). Penalties are currently up to $12,600 per contravention for an individual and $63,000 per contravention for companies. There are higher penalties (10 times the amount) for “serious contraventions”. You may also be ordered to pay compensation or back-pay (plus interest), be subject to adverse publicity and suffer damage to your reputation as a consequence of the breach.

What if you pay above the award?

Employers often mistakenly think that they can simply pay an annualised salary or above-award wages instead, or in lieu of, paying award entitlements, including allowances, loadings, penalty rates and overtime.

A limited number of Modern Awards include an annualised salary clause that allows an employer to pay an employee an annual salary in satisfaction of certain provisions of the award. However, neither the HPSSA nor the Nurses Award do (although the Modern Award that covered employees in the George Calombaris underpayment scandal did).

In the absence of an annualised salary clause in either the HPSSA and Nurses Award, perhaps the most prudent way to ensure you are meeting your workplace relations obligations is simply to pay your employees their base hourly rate of pay plus entitlements as required by the Modern Award. This is our recommended approach to minimise the risk of non-compliance.

However, if you are willing to take on the risk and pay your employees an annualised salary or above-award wages to satisfy various award entitlements, you would want to ensure that any annualised salary or above-award wages adequately compensate your employees for various award entitlements intended to be covered. You would also want to ensure that you have a well drafted contract of employment that includes a clear and express offset provision to minimise your exposure to risk.

What should you do?

Every so often, FWO will announce the industries or areas it will be auditing as part of its compliance activity or receive tip offs from current or former employees. Rather than waiting and being caught off guard, we recommend:

• Familiarise yourself with your workplace relations obligations, including terms and conditions in the National Employment Standards and the applicable Modern Award;
• Review your current arrangements to ensure that you are meeting your Modern Award obligations;
• Review your contracts of employment regularly;
• Don’t assume that annualised salaries or above-award wages will satisfy your Modern Award obligations;
• Conduct reconciliations regularly to check that any annualised salaries or above-award wages are aligned with working patterns and award entitlements.

Registration renewal for medical practitioners

Registration for medical practitioners holding general, specialist or non-practising registration is due on 30 September.

The fastest way to renew is online. You should receive a renewal reminder from the Australian Health Practitioner Regulation Agency (AHPRA) containing all the information you will need to renew your registration about eight weeks before the 30 September deadline. For this reason, it’s important to make sure that your contact details with AHPRA are up to date. You can check or change your contact details by logging into AHPRA’s Online Services webpage at any time.

If you miss the 30 September deadline, there is a one-month late period in which you must register if you wish to continue practising (however, late payment fees apply). If you do not renew by 31 October, your registration will lapse, and your name will be removed from the national register of practitioners.

To re-register, you must submit a fast track application for registration form. If you are required to submit this form, you cannot practise medicine until your application is processed and your registration details are updated on the national register. A period where you do not hold registration may have implications on your billing and medical indemnity insurance and may in fact be notifiable under your policy. It is important to note that lapsed registration cannot be backdated.

Medical practitioners holding provisional or limited registration will have different renewal dates and are not able to renew online. If you are unsure of your renewal date, check the online register of practitioners to see when your registration expires.

To find out more go to medicalboard.gov.au.

Registration renewal information is in the Registration section.

Disclaimer: The views and information provided in these articles are of a general nature only and do not constitute legal advice. It is not tailored for your particular circumstances. If you would like specific assistance with issues raised in the article, please contact our professional services team on professionalservices@amansw.com.au. If we are unable to provide specific advice or legal services to you directly (or to do so within your desired timeframes), we would be happy to refer you to appropriate external providers. In that regard, AMA (NSW) has relationships with preferred providers who will generally provide a free initial consultation to our members.