Modern awards can be tricky, especially for medium to large businesses in Australia’s Social, Community, Hospitality and Disability sector. This modern award sets the standards for how employees should be treated, but it also comes with its fair share of challenges.
We’ll dive into some real-life examples of what companies have faced and how they’ve managed to overcome these hurdles. Whether it’s dealing with complicated payroll issues, managing rosters, or handling the financial impact of compliance and more.
1. Complexity of Award Interpretation and Compliance
Interpreting and complying with the SCHADS Award 2024 is one of the most significant challenges for medium to large businesses. The modern award has detailed provisions on wages, overtime, leave entitlements, and rostering requirements. The complexity of the award has led to a few companies facing back payment and penalty issues.
Case: Australian Unity
In 2019, Australian Unity, a large not-for-profit health, wealth, and living organisation, identified underpayments to hundreds of its home care workers. This was due to the misinterpretation of the SCHADS Award, particularly regarding overtime and travel allowances. The company had to compensate employees of more than $12 million in total and revise its payroll processes to ensure future compliance.
Solution: Australian Unity addressed this by investing in advanced payroll software custom to handle the complexity of employee entitlements and payments. The software automates award interpretation, ensuring accurate payroll calculations and reducing the risk of non-compliance. According to the Managing Director, they have made changes to improve their system and process to minimise the risk of the same problem recurring.
2. Managing Rostering and Workforce Flexibility
Managing rostering and ensuring workforce flexibility is another huge challenge for larger companies. The award requires employers to provide predictable and fair working hours while also accommodating the needs of clients.
Case: Virgin Airlines
Virgin Airlines pilots in Australia have raised safety concerns regarding fatigue due to problematic rosters. The pilots argue that their current schedules are leading to excessive working hours and insufficient rest, which could jeopardise flight safety.
Solution: To address these concerns, Virgin Airlines needs to revise its rostering system (which have been promised but not followed through) to ensure pilots have enough rest and manageable work hours. Implementing stricter fatigue management protocols and allowing flexibility in schedules could enhance safety and improve overall working conditions.
3. Financial Impact of Compliance
Compliance with the SCHADS Award 2024 can have a significant financial impact on large businesses. Increased wage costs, overtime payments, and penalties for non-compliance can strain total cost and budgets.
Case: Woolworths
Woolworths, one of Australia’s largest supermarket chains, significantly underpaid thousands of its employees by as much as $300 million over several years. This problem was due to errors in the company’s payroll system and a failure to comply with workplace agreements, particularly regarding overtime, penalty rates and allowances.
The scale of the underpayment reflects deeper issues within the company’s compliance mechanisms, with oversight failures allowing the problem to persist for an extended period before being identified. This has not only led to significant financial repercussions for Woolworths but has also damaged the company’s reputation and trust among its workforce.
Solution: Woolworths committed to repaying all affected employees by conducting a thorough review of payroll records to ensure accurate compensation. Additionally, Woolworths planned to fix its payroll and compliance systems, upgrade technology and invest in employee training to ensure proper understanding and application of workplace agreements. The company also set up support channels to keep employees informed throughout the process and publicly acknowledged the issue, apologising for the oversight and committing to restoring trust.
To Wrap Up
The SCHADS Award 2024 presents several challenges for businesses in Australia, in terms of award interpretation, rostering, and financial management. However, by adopting the right tools, such as payroll software and HR systems, and by learning from real-life examples, we can all overcome these challenges together.
Understanding the difficulties of the modern award and implementing proactive solutions will protect businesses from potential penalties and legal complications. By focusing on compliance and operational efficiency, companies can create a more sustainable and fair working environment for employees.
How Can Workstem Help?
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Read More:
Updated SCHADS Award Pay Rates Guide
Understanding Pay Point Progression in the SCHADS Award
Streamline SCHADS Award Compliance with HR Software
