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Pay increases on 1 July 2023 – are you affected? | Otter.ai

Pay increases on 1 July 2023 – are you affected?

CLE Legalaid23min

Josh

00:03

This is law for community workers, podcast for community and health workers. Today we're going to be talking about employment law, and some recent changes that came in on the first of July 2023. My name is Joshua, Scotland. I'm a solicitor in the Community Legal Education branch here at Legal Aid New South Wales. And I'd like to start off by acknowledging that we're on Gadigal land today. And I'd like to pay my respects to Elders past and present and also to acknowledge all of our Aboriginal and Torres Strait Islander listeners who are listening today. I'd like to start by asking you to introduce yourself and which team you're in. And if you could also tell us your favourite podcast. Thanks, Josh. My name is Giles fryer, I'm a solicitor at Legal Aid in the employment law team. We're a specialist team at the Sydney head office. But we help out with legal aid lawyers around New South Wales, dealing with employment issues and a bit of discrimination law as well.

Giles

01:00

My favourite podcast is, well, there are two because I can't decide This American Life I really enjoy for the format of great stories being told, across you know, people's lives, and also the economist podcast, it's a great way to get a snapshot of news and current events in a way that I find it's a really good format and very approachable. So I enjoy those two.

Josh

01:23

Awesome. And now to bring us back to the topic at hand, we've had some recent changes to employment law that came in on the first of July, this year 2023. Can you outline those changes and why they've come about?

Giles

01:38

Yeah, thanks, Josh. So every year on the first of July, it's the beginning of the financial year. And at that time, the rates of pay for most employees in Australia increased slightly. And that's as part of a four year programme of incremental increases to pay rates that occur and they're implemented by the Fair Work Commission. And there's, there's these changes that we'll talk about which relate to your pay rates going up a bit. Most employees are affected. There have also been some other changes around increasing protections and allowing workers to access additional protections that have come through laws that have been made by the new federal government. And so all of these more or less came into effect as of the first of July. And that means that there are some things that's good to be aware of, and to think about, if you're ever talking to someone who might have an employment lawyer issue.

Josh

02:37

Thanks. Would you be able to outline what what are those changes in relation to pay increases?

Giles

02:43

Yeah, sure. So what there is, is to start off as an understanding is that most employees in Australia are covered by what's called a modern award. And if we imagine a modern award is kind of like an agreement that sets out the rights and entitlements or the conditions that a worker has. And then that's distinguished by which industry they're in. So we have about 122 Modern Awards in Australia. And they cover different industries so that some of the most well known ones, like the retail award that covers retail workers, and retail employers, someone who works at Kmart or Baker's delight, things like that, the hospitality award might cover people who work in a bar or hotel. And then there are various other ones aged care, the SCHADS award is because kind of social and community workers. And these all have in the minimum rates of pay. So as of the first of July, those rates of pay have increased. And there's also something underneath awards called the national minimum wage, which is really the minimum of a worker in Australia and employee can be paid. Now, we're all aware that at the moment, there's a real cost of living crisis going on. So there was a lot of discussion before these changes were made about whether those rates of pay needed to jump up at their normal few percent rate that they increased by or by a higher percentage, to take into account how high inflation has gone in the last 12 or so months. On this occasion, the Fair Work Commission has decided to award the highest ever increase to the national minimum wage is about 8.6% increase, which means our national minimum wage, one of the highest in the world is now about $23.23 per hour for a full time or part time employee. It's a bit higher for casuals, because you get your casual loading. But with all of those modern awards, they their minimum rates have also increased by 5.75%, which is the highest increase, one off increase. So it means that we're all getting a bit of a bump up in the relevant workers. It's still a bit below inflation, but it is one of the highest increases. In addition to those, there have been things that have changed. I'd like to mention some of these as we go which is

Giles

05:00

When we think about superannuation that's gone up, that's now at 11% of your wages. And there are various other things about unfair dismissal laws, paid parental leave has changed the scheme, the federal government has implemented a bit of a change to that, and extended who can access it, and when. But we won't talk so much about that today, I think more. So we'll talk about how to talk to your employer about talking about your pay and increases if you're not getting them. And then knowing that some of the ways you can enforce your rights is through something called the small claims process. And that's in court. And that's increased as well, with these changes. It used to be claims under $20,000. It's now claims up to $100,000. And why this is important is that this is a much more informal and flexible way for the average worker to go and enforce their rights. Instead of having to get lawyers and do complicated court processes. This small claims process is available to more workers now.

Josh

06:09

Thanks, Giles. And so when you talk about people who have an award, being the people to whom this applies, does that mean that contractors won't be affected by these by the minimum wage increase?

Giles

06:22

That's right, Josh. Yes. So this, this relates only to employees. And it relates only to employees who are covered by the awards. So what I mean by that, perhaps the most easy example to give is that you and I were not, we're not affected by these changes, because we're actually state government employees. So we do have awards, but then New South Wales State Awards, which is a whole different conversation. So the federal awards under the Fair Work Act, which is a federal piece of law, relate to almost all employees in private companies, Proprietary Limited companies, or associated organisations, Incorporated organisations, all of these types of things, which we know just basically to be private businesses, or people working for the federal government. And that makes up the majority of people working in Australia. They're covered by modern awards, or at least the national minimum wage. Anyone who works, let's say, in New South Wales, for local council, or the New South Wales State Government, as we do, were not affected by these changes.

Josh

07:29

And with the pay increases with with awards, are there any particular awards that have had a bigger increase than some others?

Giles

07:38

There are, Yes. I was saying before that all modern awards have had this increase of 5.75%, which is a really large increase relative to the normal increases that they have each year. But there are three awards that have had a particularly high increase. And that's a 15%. It's through a slightly different process, those awards are the aged care award, the social community home care and Disabilities Services Industry Award, known as the SCHADS Award, and the nurses award. Now, these three awards have had this 15% uplift in their minimum rates of pay, that took effect from the last pay period from the 30th of June of 2023. And why they've had a different increase is because traditionally, workers in those industries have been paid less overall than other industries. And so there's been part of this broader campaign to try and increase pay in those areas, for a number of reasons. And that's because of these lower rates of pay. But also there are statistically higher proportions of female workers working in those industries. And that's about looking at ways to increase equity and pay rates. And, and to also understand the immense importance and value of the work that these workers perform, which was so obvious during the COVID 19 pandemic, when so many care workers, nurses, and aged care workers were just on the front line doing work, that really the community really depended on, to ensure that we could all work and live safely and support our older people and people living with disabilities. So I think that's something that's been really good to see. And it's been phased in at the moment. It's a commitment to by the federal government to honour that together with industry, so with that, and a big promise, which was an electoral promise, there is always this concern that it won't always be fully rolled out, and not always available in all areas of these industries to workers. So what I'd say to that is just that workers who might be let's say, working in Disability Support Services. If you're seeing any of these workers, just for them to be really aware that they're often paid really close to the award rate anyway. And so if they're not seeing any increases in their rates, with this 15% increase, that then means there's there's probably going to be an underpayment. So they want to be noticing some type of increasing their pay. And if they don't, they want to be really wary about whether they're being underpaid and to seek some legal advice about that.

Josh

10:26

And for those people who are affected, how can they check if their employer has followed the law and has increased their pay in line with with the award?

Giles

10:35

Yep. So of course, the starting point is to know you know what your minimum entitlements are, which can actually be quite complicated sometimes to work out, because you have to understand which award you're covered by most of the time, that might be something that you're, you know, because it's in your payslip, or in your contract of employment, not all of the clients that we speak to, at Legal Aid, have either of those things. Now, it is a legal requirement that your employer provides you with pay slips every time they pay you. But we see a lot of clients who don't get pay slips. There's no legal requirement that you have a written contract of employment. But it is good to have one. And so I'd always recommend people to have a look at those two documents, if they have them, to see whether there's an award there, because that will then help them understand what those minimum rates are. If they want to double check those, they can use a helpful tool online, it's called the Fair Work Ombudsman payments and calculations tool, or pact, PACT. it's freely available online on the Fair Work Ombudsman website. And it helps you just understand what your minimum rates of pay are. So that's a good tool to find out. I'd also suggest, if you're able to speak to your employer, and just to understand what award you're covered by and what the rates are. And to do that in writing, so that you have a record of making that request.

Josh

12:08

Thanks, Giles, we'll put a link to that in our show notes. One of the questions that I have, and I guess to kind of frame the context for this, a lot of our listeners are community workers. So they they might be interpreters, they might work at a drug and alcohol rehab, they might be healthcare workers. And I guess I'm wondering what you think about would it be appropriate for one of our community worker audience members, to if they're working with a particular client or a patient to, to go to that, to that tool that you've mentioned? And to go through that process with them to try to identify the relevant award that they're on? And also identify has, has the pay increased in line with that award? And are they getting paid the correct amount?

Giles

12:53

Yeah, I think it's a good tool for most people to be able to use, whether it's workers themselves, or with the assistance of a community worker, for example, or someone who's helping them the Fair Work Ombudsman has set up this tool in a way to make it very accessible, and user friendly. So I think it is something that can be used, and also something that should be used because it it has the most up to date and current rates, and the correct ways of understanding which award you're covered by. There's lots of information online, that is also helpful. But it's often written, for example, by law firms on their blogs. And that might not be up to date, they might not have changed it when these laws came into effect. So it's good to go to this as the most up to date resource.

Josh

13:44

And what would you recommend for people where their pay hasn't increased as it should have with these recent changes?

Giles

13:50

Yeah, so this, this question will depend on a couple of things because there are workers who are paid according to an hourly rate, and others who get the salary rate. And so if you have a salary rate, it's a bit harder to work out if you're getting underpaid with these changes, because you might have a rate that's higher overall, than the minimum rates you're entitled to under the award. So you kind of have to do a little bit of math to work out roughly how much you're getting paid an hour, you might be able to do that easily by looking at your pay slips. But if it doesn't break it down for you, which some payslips don't, then you will need to work that out, because then you can compare that against these changes. Now, if you're on a relatively low salary for your industry, and you're already worried that you're close to the minimum rates, these changes because it's quite a high increase might mean that you know, if you're not getting that change, that you will be being underpaid. So I think it's it's just important to understand whether there is an underpayment there and that's why it's good to check that tool for - First, because once once you know if there is it's good to prepare as much information as you can before approaching your employer about whether there's an underpayment and what you'd like to be done to rectify. So having preparation is key, and then having a clear record of you approaching them about that is the next step.

Josh

15:22

And so, in terms of that preparation, and obviously there can be a power imbalance between employers and employees. Outside from that kind of preparation, what do you have any other kind of practical tips around how you have that conversation where that power imbalance exists? And some people might be worried that if they raised this issue, they might lose their job? Or some people might have some of these concerns? Do you have any advice around that? Or suggestion?

Giles

15:48

It's a good question, because it is really difficult. Not every employee has the opportunity to be able to either just speak with their manager directly, it will depend on the industry in which you work, and the relationships you have, then it might also be if you are being exploited at work that coming forward to raise a claim about underpayment is not something you can do easily or freely. So it is a very difficult thing. And I think approaching it as sensitively as possible is necessary. But of course, your legal rights are that you are to be paid at least the minimum rates. So with the preparation of having an understanding of how much you might be owed, putting that forward in writing, and just being clear that you know where the source of your entitlement comes from. So if that's saying, I am aware, I'm covered by this modern award, understand the rates increased as of the first of July, and that I now need to be paid at least these rates, you've continued to pay me my old rights since then. So I just want to make sure we rectify this before it becomes a real issue, and ensure that going forward where we're you know, both agreeing that these are the rights I'm entitled to, it's a difficult thing to do. I would just say, though, that once you make an inquiry or a complaint in relation to your employment, which includes about asking about pay, that becomes what's called a workplace rights under the Fair Work Act. And once you exercise that rights, by making that request or that inquiry, you can't be dismissed because you made that request that inquiry, or you can't have other things happen to you, these are known as adverse action. So dismissal, having your hours cut, been demoted, let's say from full time to part time, or having some other way that you're kind of injured in your employment, that's known as. And so this is a thing under the general protections, which is an area of protections that exist to these employees. And it's something that I just keep in mind when you're making these requests. They can't just sack you, because you've made an inquiry sothat that should hopefully give people the confidence to come forward. But practically, I really do understand it's difficult to

Josh

17:25

Thanks, Charles. And and what happens if you if you do have that conversation, you do the preparation and and your boss or your manager, your employer still refuses to pay you the correct amount? What are your options in that situation?

Giles

18:20

Yeah, so I guess, again, there will there'll be maybe two scenarios, one might be a flat out, no, I'm not going to pay you. Because I just don't want to pay you more. And the second might be, I don't agree with your interpretation of award coverage, or some other thing where there's a dispute between you and your employer about whether you're entitled to that amount or not. So if it's in the first instance, where it's just them saying no, or not responding to your request, then the more you work, the more the underpayment becomes. And so it's a thing that you want to try and resolve quickly. Because you're obviously out of pocket, the more you leave it, and it becomes just difficult to enforce it when the employer has to pay more back. And so with that, some of the things we suggest is is to, as we've talked about is to work out how much you're owed first, try and resolve it directly with the employer and do that in writing. So there's a record and then before taking further action, seek legal advice. You can do that directly to the Fair Work Ombudsman they can help. Firstly, confirm the award you're covered by through their inquiry loan, and also sometimes help you to contact the employer and try and resolve it. But if they're unable to assist you, you can then seek legal advice and our team at Legal Aid is one of the teams you can get free advice from we give 30 minute free consultations for advice on employment law issues, which includes about underpayments once you've had that legal advice that can help you to frame for example, a legal letter of demand, that could be setting out what your entitlement is, and requiring that your employer pays it to. And if they don't, that legal action might commence. And then at the very end of this process, which hopefully isn't where you have to go, that's where, when we talked about before the small claims process, that's where you have this right to go through courts, and that's at the Federal Circuit and Family Court of Australia. And so we talked about before that that's increased from 20,000, up to $100,000, is the limit for claims, which means that most people's claims will fall within this regime now. And it's a much less formal, it's for people to self represent, you don't need a lawyer to represent you. And so you're able to commence these proceedings to try and recover the amounts that are owed to you from the cause. So this is all on the assumption that, you know, they just don't want to pay you. There can be other issues where they say, you're not covered by, for example, you know, the hospitality award, you're covered by the restaurant industry award. And that rate of pay is slightly lower, or the overtime rate is different. If that happens, that's an issue where I'd say just get legal advice as quickly as possible to confirm your award coverage. Because once you've confirmed that you can then work out how much you're underpaid, and then go from there. So I think that's that's maybe the only difference I can think of.

Josh

21:29

Would you people can contact the employment team at Legal Aid? Are there any other numbers or any other organisations that we should put in our show notes for different organisations, that community workers can reach out to if they're working with somebody who has an employment law issue?

Giles

21:46

Yes. So legal aid the way best way to contact team is through law access. And that's just through dialling 1300 888 529 and that will allow you to get to the most relevant part of legal and to get advice. So if you have just an employment law issue, you'll come to our team or if you have various different legal issues, including an employment law issue, we'll try and ensure that you get legal advice with each of our relevant teams. And one example there is that we've now got a new team called RAWLS which stands for respect at work legal service, and they also provide assistance on discrimination matters things to do with sexual harassment or forms of discrimination in the workplace. So we work together with them as the employment law team to help clients because clients might have often multiple issues across our different areas of expertise. Beyond Legal Aid, there are Community Legal Services organisations that provide employment law advice, so the Redfern Legal Centre, and Kingsford Legal Centre. So some of these around the Sydney area do provide free advice as well. So there are options there where you can go really depends on your area, and if you want to come into an office, so lower access can make those referrals across can make those and if we can't help a client, because we do have some triage criteria, we can't help a client we'll do our best to try and refer that client to someone who can. Okay, wonderful.

Josh

23:20

Thank you, Giles, so much for your time and expertise.

Giles

23:23

Thanks so much, Josh. Yeah, great to be on. Thank you.

Josh

23:29

Thank you so much for listening, everybody. To find more information, please check out our show notes. And we look forward to you tuning in again next time.

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