CCBR Business Review

21 B U S I N E S S T I P S The 122 Modern Awards can represent a confusing maze for business Your ability to earn – What’s it worth? SURELY THE 122 modern awards that cover most (non-state-government) employees, clearly define which employ- ees/businesses they cover? Otherwise – how would a business know its obligations and employees know their entitlements? For some businesses the question is relatively clear. For example, if a business is operating a GP practice and employs health support staff, then most of them will be covered by either the Health Professionals and Support Services Award 2010 or the Nurses Award 2010. However, there are many businesses where it is not so clear cut. As a result, there are many businesses where they pay their staff under the wrong award. So what? Well as my recent articles in this publication have highlighted, the Fair Work Ombudsman is vigorously pros- ecuting employers for breaches of awards and the Federal Court are making orders for very significant civil penalties where those breaches are established. By definition, if you (as an employer) are paying an employee under an incor- rect award, – there’s a real risk that you (as the employer) are in breach of the correct award and liable to face a civil penalty. A recent simple example that came before the Federal Circuit Court highlights the confusion so many businesses face. In this case, the business was a start-up providing a novel service out of airports where customers left their cars with the company and those cars were then hired out other people. So… was it a car stor- age company or a car hire company? The court held that, it was essentially a hire car business. The worker who made the claim had been employed as an assistant manager. The worker believed that he was employed under the Clerks Private Sector Award 2010. The employer thought the worker was covered by the, less onerous, Miscellaneous Award 2010. As it turns out, the Federal Circuit Court decided that they were both wrong. The Federal Circuit Court came to an entirely different view and decided that, because it was a car hire company, that meant its business was effectively clas- sified as a retail outlet and, therefore, the worker was covered by the General Retail Industry Award 2010. This meant that the worker was enti- tled to make a claim for overtime and penalty rates. More concerning for the employer, for each breach (ie. incidence of underpayment of an entitlement), a civil penalty of up to $63,000 could be imposed by the court upon the employer. As highlighted in my recent articles in this publication, those penalties – even for a “first offence” – can amount to $100,000+. To avoid the risk of a potentially crip- pling penalty – employers need to get advice from an expert employer lawyer – to be certain they are meeting their obligations to their workers under the right award. By Warwick Ryan, Partner, Hicksons Lawyers By Craig Matthews, Account Manager, InsuranceHouse Do you want Google to generate more leads for your business? Call Yvette for a free initial consultation on 0415 601 591 Until most of us reach the ultimate goal of establishing a passive income our ability to earn is usually the most precious asset that we have. Without it, our plans for the future of our children, that retirement trip through Europe or just about any other goal that you can think of simply won’t happen. Surprisingly, most think of their income in terms of a monthly or annual figure but the truth is more long term. If a 35 year old is earn- ing a salary of $100,000 today and we factor in 3% wage increases, just enough to keep up with inflation, by the time he or she reaches retirement age they have the potential to earn $4,534,656. Now think about what your ability to earn is worth again with this in mind. Protection of income is something that can be overlooked as not so important because “I have a lot of sick leave and holi- days that I can rely on” or “it won’t happen to me”. While this may be true for some, think of how different your life would look if a poten- tial $4.5M was removed from your future. There are many types of income protec- tion available and quite a few questions to be asked such as should it be held inside or outside of super and how does this affect the policy? Should the policy be owned by your business or individually and who should pay the premium? All these ques- tions are valid and can be answered by a qualified adviser. The important point is to think about this in the long term and get advice if you haven’t already. To find out more on how to protect your future, contact Craig Matthews at Insurance House, (02) 8913 9169 or craig.matthews@ ihgroup.com.au . CENTRAL COAST BUSINESS REVIEW APRIL 2018