Episode 87: Employee Entitlements
Mar 18, 2024
In this episode, Trudi and Sarah discuss employee entitlements, including various types of leave and awards. They emphasize the importance of understanding the specific rules and regulations that apply to different industries and states. The conversation covers topics such as annual leave, long service leave, sick leave, carers leave, domestic violence leave, and parental leave. They also touch on the payment of superannuation on overtime and bonuses. The hosts highlight the need for individualised employment contracts and employee handbooks to ensure clarity and compliance with entitlements.
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Podcast Transcript Available Here
Duration: 27:15
Trudi Cowan (00:09.186)
Hello everyone and welcome back to another episode of the Financial Fofu Podcast. Welcome back, Sarah.
Sarah (00:15.784)
Thank you very much. Pleased to be here.
Trudi Cowan (00:17.808)
Today we are having a bit of a chat around employee entitlements. And I just want to start by saying we are not HR experts, but we both have employees and we both have been on the Fair Work website many times. So we're just wanting to share some of the knowledge we do have, but also acknowledging that we're not the experts in this space.
Sarah (00:24.168)
Yes.
Sarah (00:27.944)
I'm sorry.
Sarah (00:39.72)
No, and sometimes you actually need a lawyer for some of this stuff. Even HR experts don't cut it. You really should be engaging, a suitably qualified and knowledgeable lawyer to assist you legally based on your requirements and obligations.
Trudi Cowan (00:42.832)
Yeah.
Trudi Cowan (00:52.248)
Yeah.
And look, hopefully if you have employees, you're already aware that there is a whole range of entitlements that employees have. And one of the big ones is there are various types of leave that they are entitled to. We have some very generous rules in Australia around our leave types. And sometimes there can be some confusion about what falls into which.
Sarah (01:04.112)
Mm -hmm.
Sarah (01:08.968)
Yes.
Trudi Cowan (01:21.136)
category of leave and what the technicalities are around certain categories.
Sarah (01:26.472)
So it's probably important to acknowledge first and foremost, you need to see whether or not you fall under any awards and whether you need to honour those awards and therefore what does the award say about what leave requirements and potentially allowances, which we'll get into a little bit later, but what are included as them based on the actual award because what's in an award for a trade would be very different than what's in an award for...
Trudi Cowan (01:32.56)
Yes.
Trudi Cowan (01:38.746)
Yes.
Trudi Cowan (01:42.862)
Yep.
Sarah (01:53.766)
administration which is still technically a clerical or a clerk award because it's still 1955.
Trudi Cowan (01:57.808)
Yes, that's correct. And there's also industries that aren't covered by awards at all, in which case you fall back on the national employment standards and there is a minimum standard set.
Sarah (02:04.488)
Yes.
Sarah (02:08.424)
Standard. Accounting doesn't have an award. No. I don't know if finance breaking does because I've always paid above award so the award kind of was irrelevant because maybe it was the national. I don't know if we've got one. Oh no, I think ours would fall under banking because of the banks. Yeah, so anyway, we'll segue there.
Trudi Cowan (02:12.24)
No, we don't have an award not for accountants, no. No.
Trudi Cowan (02:22.064)
Yeah, yeah, it was.
Yeah, yeah. So yes, that really is the first place to go to look for information if you're trying to understand what your obligations or your entitlements are for your employees. But I guess a base level annual leave is probably pretty much well understood by most people. Four weeks is typically what is provided.
Sarah (02:40.424)
Yes. Yup.
Trudi Cowan (02:55.898)
and it is cumulative so if you don't use it, it carries over to the next year and is used for holidays to take time off or do whatever you like. You don't actually have to take your employer while you're taking your leave.
Sarah (03:05.48)
Yeah, personal time off. You don't. No, you don't. You just need annual leave. I'm going to put a caveat in here though. If you're listening and you're an employee, please be respectful of your employer's requirement for you to actually be there to fulfill your job and not just demand your leave when it suits you. Like courtesy seems to be going out the window in this day and age and these people pay you and okay.
Trudi Cowan (03:14.648)
Hmm.
Trudi Cowan (03:21.966)
Yeah.
Yeah.
Sarah (03:32.68)
we have a labour shortage and you could get a job elsewhere, that is so true. But at least have some respect for those people that are busting their hump as an employer to try and do the right thing and try and allow that your leave fits in around the business's needs as well as your own, not just go with your own options.
Trudi Cowan (03:42.192)
Yeah.
Trudi Cowan (03:48.368)
Yeah. And a business can deny your leave if there's a reasonable basis for denying. So many years ago when I worked in, yeah, many years ago when I worked in retail, they didn't like giving leave over the Christmas period. Of course they didn't. It was their busiest time of year. Working for previous accounting employers, they didn't like us taking leave over the key lodgement dates. Because again, they were going to be busy. They needed all hands on deck.
Sarah (03:57.282)
Legally they can, yes.
Sarah (04:03.816)
um yeah, busiest time of the year, yeah completely.
Sarah (04:12.936)
What? Yes.
Trudi Cowan (04:15.8)
Most employers I know have policies around if the other key person in your team is on leave and you're only a team or two, well then you can't go at the same time as said other person. So you need to be, as you say, be respectful of these sorts of key times of year and just awareness around other people's policies. But also maybe appreciate that other people are probably going to get annoyed if you're taking leave every single school holidays, which then means other people can't take leave. So just being aware of these sorts of things is important.
Sarah (04:25.096)
Yeah. Yeah.
Sarah (04:40.536)
You can't. That's right. That's right.
Sarah (04:46.12)
Yeah, I've heard some horror stories though. So I thought I would just point that out for everybody that sure, you may not be as an employee, you may feel that you're entitled to take leave whenever it suits you, but that's not legally how it works. And sure, you can quit your job and go elsewhere. But guess what happens? The cycle for this always flips around. And whilst we might have a labor shortage now, there'll be a labor surplus at some point in time, and you'll have a reputation as someone that's not employable based on that. So.
Trudi Cowan (04:50.352)
Thank you.
Trudi Cowan (05:12.93)
This checked. Yeah.
Sarah (05:15.144)
Have a think about moving forward. So long service leave is one type. State based rules applied along service leave.
Trudi Cowan (05:20.592)
Yeah, so every state has slightly different rules. Typically, it's service of seven to 10 years. I know some of it, some of them it's like you get paid out on seven years, but you can only actually like take the leave if you're there for 10 and things like that. So there are slightly different rules, but effectively you get, I think it's 10, seven to 10 weeks leave for service of seven to 10 years. And an interesting note, the reason we historically have long service leave,
Sarah (05:24.592)
Yeah.
Sarah (05:28.008)
Yeah, New South Wales 70s prorata.
Sarah (05:36.232)
Yeah. Yeah.
Trudi Cowan (05:48.528)
is because we were so far away from England and people needed that amount of time to get on a boat to go home and visit family and then to come back again. Yeah.
Sarah (05:52.296)
Mmm.
There's a fun fact. Once every 10 years they could take an extended holiday and not lose their job. See, my talk about cycles has come back around very quickly.
Trudi Cowan (06:00.912)
Yeah, that's that's why was first done. But it stayed in and it's a reward for long service with your employer. And look, in this day and age, there's probably not as many people that actually hit those milestones of getting the long service leave. So it is really can be seen as a reward from your employer for having stuck around and providing that that is of service. And it's also something that's
Sarah (06:11.112)
Yeah. Yeah.
Yeah, no.
Sarah (06:22.12)
Yeah.
Sarah (06:25.992)
I think potentially with trades, there's some schemes that allow them to roll across their long service leave. Like I believe inkling. Yeah. Industry. Yeah.
Trudi Cowan (06:31.248)
So yeah, most of the states have schemes for construction industry that require the employer to actually pay the amount of the leave on an ongoing basis into a central fund. And then I'm not sure what the requirements of the employer actually taking the leave. Probably again, you still got to hit that seven or 10 year service, but then they apply to the central fund who pays it out. Yeah. Whereas at...
Sarah (06:42.28)
Yes. Yeah. Yeah. Yeah.
Sarah (06:57.128)
Pays it out, yes, for those reasons. So.
Trudi Cowan (07:00.528)
In other industries, the employee, the employer pays nothing on an ongoing basis and only pays when you actually take that leave. So let's just.
Sarah (07:07.336)
Yeah, which then makes me wonder if you're a casual employee, are you eligible for long service leave?
Trudi Cowan (07:11.344)
In some states, yes, but I believe not in all. So the very first casual job I had, I stayed there for nine years, I think, so my long service was paid out when I left. I worked in retail.
Sarah (07:19.342)
Interesting.
Sarah (07:26.216)
What did you do?
Doing what? Good.
Trudi Cowan (07:31.024)
in the back office in a retail store. Also in my high school and uni years.
Sarah (07:33.576)
Good? Ah.
course you did, you did the book work.
Trudi Cowan (07:42.352)
I was a checkout chick for a couple of years and then the end.
Sarah (07:42.6)
hilarious okay yeah I worked a red rooster everybody put myself through uni and I worked in outdoor shop and like outdoor equipment shop and I worked in paint so paint yeah yeah
Trudi Cowan (07:48.176)
Right?
Trudi Cowan (07:54.928)
Yeah, so I've had long service leave paid out there, which was quite good. But definitely if you are a casual, something to well worth be aware of, because you may not have otherwise known. So next one on the list is sick leave, carers leave, personal leave. It goes by different names for different people, but it's all really referring to the same thing, which is leave that you can take.
Sarah (08:04.776)
Mm -hmm.
Sarah (08:08.456)
No, most people don't realise that, so...
Trudi Cowan (08:23.568)
because you're sick or a close family member. You're sick and you need to take care of them.
Sarah (08:27.08)
Yes. Is that definition around close family member?
Trudi Cowan (08:31.152)
There is a definition around close family member. I should have known you were going to ask that and pulled it up for it.
Sarah (08:36.232)
Yes.
Sarah (08:40.008)
She's just preparing that for us guys.
Trudi Cowan (08:42.192)
Yeah, I believe that it is related to, it's like a close relationship, so your parents or your children or another member of your immediate household.
Sarah (08:50.12)
So immediate, immediate, oh household, so sibling, an adult sibling doesn't qualify.
Trudi Cowan (08:56.624)
Yeah, I don't simply call for you if I remember if you're immediate family.
Sarah (09:01.576)
Technically, yes. So this is the... Yeah, I was only asking my sister to take me to get some surgery on my eye and I said to her, were you able to take carers leave? And she was like, no. And I was like, well, I'm an immediate member of your family. I'm pretty sure you qualify. But I think what's changed is that compassion and bereavement leave has sort of been added to sick leave. You get like your 10 days now of that and it's kind of all rolled in together. She told me she had to take sick leave. But as Trudi and I were talking about yesterday,
Trudi Cowan (09:13.646)
Yeah.
Trudi Cowan (09:23.48)
Yeah.
Sarah (09:30.956)
Um, carers leave potentially doesn't require a certificate versus, um, if you have used your, depending on what's in your employer agreement and in your award, if you've used up, if you've used up your non -certificated sick leave days and you would need a medical certificate, then, um, carers leave, compassion and bereavement leave doesn't actually require that. So, um.
Trudi Cowan (09:46.992)
See you mate, never.
Trudi Cowan (09:57.904)
But as a parent, I've had doctors offer me certificates because I've taken my child in. There's definitely something that doctors are aware of and familiar with and are able to do.
Sarah (10:01.448)
Yes, the letter as well. If you've taken your child, yeah, yeah.
Yes, yeah, probably because some people are required to actually provide it to prove that it was actually carers late. So.
Trudi Cowan (10:14.192)
Yep. So I've just made out check immediate family does include your siblings. Yeah. And your grandchildren.
Sarah (10:19.144)
Woo, good to know. Can you send me that link? Oh, okay, interesting. Well, that makes sense given that a lot of our care these days still is done by the next generation, back to grandparents as well. So what about domestic violence leave?
Trudi Cowan (10:28.208)
Yeah.
Trudi Cowan (10:32.312)
Yeah.
Now this is a new one that has come in, I reckon the last couple of years that one it's come in. And it is really a leave that is available to individuals that are experiencing domestic violence to help them to you know give them some time off to relocate or to seek.
Sarah (10:40.07)
Mmm.
Sarah (10:45.724) 12 months? 18 months I think? I don't think it's been that long.
Trudi Cowan (11:03.798)
assistance or or counselling. It is a paid leave. It's additional to your sick leave and your compassionate leave. So it's an additional leave and it's so it's so this one actually resets every year. So it's a 10 -day entitlement and it is a
Sarah (11:08.36)
Yeah, it's an additional to your sick and or and or compassionate leave. Yeah.
Sarah (11:25.032)
Yes.
Trudi Cowan (11:29.166)
use it or lose it kind of situation. So if you don't need it in the one year it resets and you get a fresh 10 days in the next year, they don't add to each other. Yeah, so in the second year you don't have 20 days available, it's still just 10 days each year. Yeah.
Sarah (11:37.256)
Oh, they're not cumulative, so they don't continue to grow. Right. Yeah. No, should they? Yeah, no, should they? Right. Yeah. Yeah. Yeah. Yeah. Okay. So parental leave, how is that different to compassion and unbridlement leave? It's specified for children.
Trudi Cowan (11:52.464)
So parental leave is probably what most people know as maternity leave or paternity leave, right? And is you have just had a child or adopted a new child and therefore are taking the time off. Employers are not required to provide paid leave, but many employers choose to provide paid leave. But you are required to provide 12 months off to the mother.
Sarah (11:57.384)
Ah yes, not actual carers leave. That's true. Yeah.
Sarah (12:12.936)
Do choose to. Yep. Yep. Yep.
Sarah (12:22.544)
Unpaid. Yeah. Yeah. So keep the job. Yeah. Yeah.
Trudi Cowan (12:23.402)
unpaid. So basically you just need to hold their job for 12 months and have that job available for them to return to. I think it's that job or a similar role, you know a role when they return. But within the parental leave there is also conditions for the father to take time off as well.
Sarah (12:31.624)
if they choose to return. Yeah.
Similar role, yeah, because the role of the business may have changed.
Sarah (12:45.064)
Yeah, I noticed they have changed the Centrelink paid parental leave of late where the husband or the partner can take two weeks of the leave. It doesn't, it's not an additional two weeks, it's part of the total 18 weeks.
Trudi Cowan (12:51.728)
Yeah, can take it.
Trudi Cowan (12:58.448)
I don't think it's even two weeks now. I think it's just either the mother or the father. 18 weeks paid leave is available from the government and either the mother or the father can take it, but they can't take it at the same time and they can't be receiving paid leave from their employer. So there's a whole bunch of rules around how that all works, which is more than what is, I guess, the scope of this particular podcast. But if you are potentially parental,
Sarah (13:02.76)
Yes, that's what I'm getting at. You get 18 weeks paid leave. Yes, either of them can take it. Time. No.
Whilst they get it either. Yeah. Yeah. Yeah. Yes.
Trudi Cowan (13:26.754)
leave is a need for you. It's definitely something to jump on Fair Work and check out the rules, jump on Centrelink and check out what the rules are.
Sarah (13:28.456)
Yep. To go and investigate. And if you're self -employed, also check out the rules around whether or not you can operate your business whilst you are receiving.
Trudi Cowan (13:39.664)
Yes, I believe that for self -employed you're allowed to have what they sort of call keeping in touch days that you're allowed to do a little bit or some background administrative work but you're supposed to refrain from doing the actual delivery or product delivery. So you would need to hire someone in if you're wanting to continue.
Sarah (13:48.168)
Yeah. Actual work. That's right. That's right. Replacement stuff. That's the idea of it, which you might think is a waste of time and energy, but that's how the rules are written. So on leave, how does super work?
Trudi Cowan (13:58.16)
The business is running. Yeah.
Trudi Cowan (14:08.304)
It depends on the type of leave. So it's not payable on all of them, but it is on some. So again, this is one of those really technical areas that's really worthwhile. If it's relevant to you and your business, going and making sure with fair work, going and making sure with your accountant that what you're doing is consistent.
Sarah (14:21.64)
Mmm.
Sarah (14:27.304)
Okay. But what about then, because we're talking employee entitlements, not just about leave today, right guys? So how does super work if you pay overtime?
Trudi Cowan (14:42.48)
You could have like warned me about these questions here. Super is paid on ordinary times earnings, right? Not all over time is considered ordinary earnings.
Sarah (14:45.764)
You were right this run, Sheik, today.
Sarah (14:52.424)
Yes. Ordinary time earnings. So that's why some people when they employ you either have a base rate and then you get paid over time over certain amounts, which is in accordance with your award. But it also changes the superannuation. The same with bonuses is my understanding. If people are paying a bonus, super is not paid on a bonus.
Trudi Cowan (15:08.516)
Yes.
Trudi Cowan (15:14.712)
Yes, now it can be.
Sarah (15:16.616)
Right, so this is then the thing. So how do you qualify it?
Trudi Cowan (15:17.968)
Yeah, right. So it depends on how the bonus is determined. So if the bonus is relating to your performance, then it relates to your ordinary work and your ordinary hours. Whereas if the bonus is based on, for example, you get 10 % of profits, it doesn't really matter how many hours you've worked or how well you've performed, you're still going to get that bonus, right? So it's not linked to your ordinary hours, right? The bonus is it very much depends on how it is calculated.
Sarah (15:29.832)
Okay.
Sarah (15:37.448)
Okay, works right.
Sarah (15:43.878)
No, and so the.
Trudi Cowan (15:48.304)
and the basic world.
Sarah (15:48.328)
The reason I bring it up is because you may want to reward your staff, which is fabulous, but you may not realize that you've got an 11 % additional cost on rewarding your staff depending on how you calculate and remunerate. And it's relevant that you're aware of that if you're an employer, because it could actually make or break your ability to pay the bonus.
Trudi Cowan (16:04.272)
Hmm.
Trudi Cowan (16:09.36)
think it's probably safer to say that most bonuses super would be paid on.
Sarah (16:13.448)
Okay, interesting. Unless they're in some sort of a profit share relationship, which means they could not work for six months of the year and still be paid.
Trudi Cowan (16:15.31)
Yeah.
Trudi Cowan (16:19.908)
Whereas most overtime is not ordinary times endings.
So therefore, no overtime, right? So again, because there are technicalities around some of those definitions, these are areas that you should be getting advice and getting someone to your specific circumstances, right? To work out the actual answer because there are some where it's a yes and some where it's a no, which is why I'm angry, vague about my answer. Because it really doesn't.
Sarah (16:27.526)
Right?
Sarah (16:36.22)
Professional advice on. Yeah. Specific, specific. Yeah. Yeah. Yeah.
Sarah (16:45.8)
Cautious. Yes. Yes. I look, I think the important thing to note here is if you're the person that is online asking for an employee contract or can anybody please send me. I've seen, I've said all the time, because anyone got even terms and conditions, that's not relevant to today's topic, but no, they need to be unique to your individual circumstances and your.
Trudi Cowan (17:11.47)
Yeah, the CPU.
Sarah (17:12.58)
employment contracts have to match your employment conditions and it is very specific to the nature because it protects you in the future as much as it protects the employee and so for spending the money to get it done correctly now makes sense. It really does make sense guys. I've seen too many instances.
Trudi Cowan (17:28.176)
And I think the other thing that's really important to do is, as well as having that contract with your employees, is an employee handbook. Do you actually have a policy that's available to your employees for them to be able to go in and say, these are the leaves that you're entitled to? These are the circumstances in which you're entitled to these leaves. And maybe all you're doing is replicating what's in the award or under the fair work rules.
Sarah (17:34.736)
Yes!
Sarah (17:42.952)
Yep. Yep.
Sarah (17:50.406)
Yes.
Trudi Cowan (17:52.72)
but at least it's making it really clear to your employees and even to your HR team or your payroll team. These are the requirements. These are the rules that we work by in our business so that there can be no question around some of these. Having said that, the question that I often see is things like, does this qualify as personal leave? Just because it doesn't qualify as personal leave doesn't mean that you as a business can't say,
Sarah (18:03.112)
Yeah. Yeah.
Sarah (18:16.936)
Mmm.
Trudi Cowan (18:21.68)
but I'm gonna let you take it as personal leave anyway. You are allowed to take, you know, if you're giving your employees more than the minimum requirements, that's okay. You're allowed to make those decisions for your business as well.
Sarah (18:24.712)
Yeah, exactly.
Sarah (18:33.8)
Yes, that's your choice. So you can allow, say they've got 10 days leave and they've taken eight and they've got two left and it kind of falls outside of breedment leave or it falls outside of carers leave or it falls outside of sick leave or you can let them take it as sick leave if you choose. But that also then means that the employee needs to know that they now are down a day. I'm going to throw a Taylor Swift argument.
Trudi Cowan (18:35.928)
Yeah.
Trudi Cowan (19:00.408)
Yeah.
Sarah (19:03.112)
If the client, if the client, if the employee has completely used all of their annual leave and has sick leave and really wants to go to Taylor Swift, but needs to be paid and you as an employer are a Swifty and are comfortable that that technically qualifies as a sick leave day for their mental health, right? You can still allow them to do that, but then the employee loses a sick day. That would be a paid sick day. You, that's at your discretion.
Trudi Cowan (19:08.046)
Mm -hmm.
Trudi Cowan (19:19.568)
and mental health day.
Trudi Cowan (19:26.672)
Yeah. Yeah. And that's it. And same with things like allowing your employees to go into negative annual leave. Again, that's at your discretion.
Sarah (19:35.462)
Yep.
all of that at your discretion. So we talked about Fair Work website a little bit. I know that there have been some changes to Fair Work recently. You gave me a really good tip yesterday that I actually wasn't aware of because well, you give me all of these answers anyway if I have a question about them. But there is an email alert that you can sign up to.
Trudi Cowan (19:42.542)
Yeah.
Trudi Cowan (19:46.754)
Yes.
Trudi Cowan (19:52.66)
I'm
Trudi Cowan (19:57.616)
Yeah, there's a Fair Work does an email newsletter type thing and they send out alerts if anything's changed. So on their website, you can sign up for that. And it just means that if there are any changes or different things that you need to be aware of around your employee entitlements and rules, your Fair Work let you know on a timely basis so that you can make sure that they're appropriately being implemented within your business.
Sarah (20:24.584)
Awesome. So I think we'll probably leave it there today. It's been a quick episode to allow you to have it to digest some of these concepts and then go off and do your research. We can recommend, I've got a couple of solicitors I can recommend or HR experts. If you need one, reach out, put us up on our socials. Next week, sorry, next fortnight we are talking about personal services incomes and personal services businesses.
Trudi Cowan (20:34.168)
Mmm.
Trudi Cowan (20:50.2)
Yes.
Sarah (20:53.64)
It's an interesting topic that often gets very confused and the interpretation of the legislation is different depending on the accountant you even speak to. So.
Trudi Cowan (21:01.036)
Well, okay, shouldn't be, but yes it can be.
Sarah (21:04.634)
Shouldn't be, but nonetheless, here we are. So we will be talking about that. So guys, have the best fortnight. If you've got any questions, let us know and we'll see you then.
Trudi Cowan (21:16.336)
Bye.