ONE in every four Australians is older than 55 – and the United Nations estimates that this will increase to one in three at some point in the next 10 years.
As the average age of the workforce continues to rise, companies will increasingly be faced with issues of managing employees who are approaching the traditional retirement age. This can be particularly challenging in some industries where certain skills are being phased out, or when workers' fitness levels may impede their ability to keep doing their jobs as they get older. How can you handle these challenges in a way that is fair for everyone? Protection for older workers While in the past it was generally accepted that Australian workers would retire at 65, today Australia has no compulsory retirement age. If you believe an employee is no longer able to fulfil the requirements of their position, you will need to manage their performance through the standard channels – usually via a formal performance review system. Retirement must be entirely voluntary – it is illegal to compel an employee to retire, to deny them opportunities or to change their working conditions in a way that forces them to leave. You also cannot ask employees to sign a document agreeing to retire at a certain age. Doing any of the above will be an example of direct age discrimination, and forcing an employee to retire because of their age alone would also constitute unfair dismissal under the Fair Work Act 2009. However, it is a general exception to anti-discrimination legislation if a person receives a benefit due to their age – such as the introduction of an approved early retirement scheme (ERS). In other words, while it is illegal to compulsorily retire an employee, you can develop a policy that provides benefits for certain groups or classes of employees to encourage them to retire early. How early retirement schemes can work for you ERSs aren’t easy to establish, but they can be a very useful part of a plan to reorganise business operations – when a company is aiming to achieve a specific short-term objective. This can be anything from introducing new technology or processes, to replacing employees with those that have different skills, or even closing or relocating part of the business. The ERS should be available to a broad group of employees within the business – such as all those who have reached a particular age or with a particular occupational skill. It could also be open to all company employees. For example, in 2011 Loy Yang Power Management obtained approval for an ERS to reduce its labour costs – and invited its employees to apply for up to 40 positions in the scheme on a first come-first served basis, though there was a veto on applications from certain areas. Those who accepted the scheme were paid six months’ salary if they had worked for the company for fewer than 10 years, or 12 months’ salary if they had worked there for longer. Like redundancy payments, ERS payments are eligible for tax concessions – but ERS systems must be approved by the Commissioner of Taxatiosn before any payments are made. An ERS is unlikely to be approved if it is too similar to a typical redundancy scheme. The two schemes are fundamentally different – while a redundancy occurs when no-one is needed to perform a role, in an ERS the role can remain open for the position to be refilled quickly. Further to this, while you may choose what you want the ERS payments to be, redundancy entitlements are set out in the Fair Work Act 2009 and are allocated according to the period of continuous service with the company. If you are considering using an ERS in your business, you may also wish to consider the implications for any long service leave payments – as the law concerning these will vary from State to State. Transitioning towards retirement Employees aged 55 years or more have the right to request a flexible work arrangement – varying either their hours, patterns or locations of work – but you may have a right to refuse it on reasonable business grounds. You may ask that your employee, when requesting a change in their role, sets out a business case for the change
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Originally - November 23rd, 2017 Carol Louw Employment, Human Resources, Industrial relations
CONSTITUTIONAL LAW: TASMANIAN PROTESTERS ACT BURDENS FREEDOM OF POLITICAL COMMUNICATION By a majority of 5 to 2, the High Court has held that the substantive prohibitions and ancillary provisions of the Workplaces (Protection from Protesters) Act 2014 (Tas) impermissibly burdened the constitutional freedom of political communication and so were held to be invalid. Brown & Anor v State of Tasmania (2017) 69 AILR ¶102-879; [2017] HCA 43 TERMINATION OF EMPLOYMENT: WHEN LEGAL “ASSISTANCE” BECOMES LEGAL REPRESENTATION A Full Bench of the Fair Work Commission held that the term “representation” under s 596 of the Fair Work Act 2009 (Cth) extends beyond oral advocacy at a hearing. The full bench found that a lawyer “assisting” the employer at the hearing of an unfair dismissal application was in fact legally representing the employer. Fitzgerald v Woolworths Limited (2017) 69 AILR ¶102-880; [2017] FWCFB 2797 GENERAL PROTECTIONS: EMPLOYER TO PAY OVER $57,000 IN COMPENSATION AND PENALTIES FOR ADVERSE ACTION AGAINST PREGNANT EMPLOYEE The Federal Circuit Court ordered an employer to pay over $37,000 in compensation, and a $20,000 pecuniary penalty, after it took adverse action against a pregnant employee by bringing forward the date of her redundancy so that it took effect two days before she went on paid parental leave. Power v BOC Pty Ltd & Ors (No 2) (2017) 69 AILR ¶102-881; [2017] FCCA 2387 ENTERPRISE AGREEMENTS: EMPLOYER PREVENTED FROM RE-LITIGATING DISPUTE The Federal Court set aside an employer’s originating application for a declaration interpreting an enterprise agreement on the basis that there was no “matter” to be determined because the issue in dispute had already been resolved in a private arbitration before the Fair Work Commission. Energy Australia Yallourn Pty Ltd v AMWU (2017) 69 AILR ¶102-883; [2017] FCA 1245 WORKING WITH CHILDREN: TRIBUNAL INCORRECTLY APPLIED “UNJUSTIFIABLE RISK TO THE SAFETY OF CHILDREN” TEST The Supreme Court of Victoria found that the Victorian Civil and Administrative Tribunal erred when reviewing a decision refusing to grant an assessment notice under the Working with Children Act 2005 (Cth). The Tribunal failed to properly administer the test specified in the legislation which required determination of whether “giving the assessment notice would not pose an unjustifiable risk to the safety of children”. PQR v Secretary, Department of Justice and Regulation (No 2) (2017) 69 AILR ¶250-072; [2017] VSC 514 UNFAIR CONTRACT: CONTRACT FAILED TO PROTECT FROM BULLYING AND ARBITRARY TERMINATION A contract which failed to protect the worker from arbitrary and immediate termination, and did not adequately protect against bullying and harassment, was declared to be unfair and harsh by the Supreme Court of New South Wales. The plaintiff will receive a payment in connection with the contract, adjusted for a settlement reached with the second defendant. Sutton v BE Australia WD Pty Ltd (No 3) (2017) 69 AILR ¶200-588; [2017] NSWSC 689 |