Agreement making can address Pharmacy Guild’s criticisms of Modern Award

The Pharmacy Guild of Australia (‘PGA’) has recently made submissions to the Australian Industrial Relations Commission, critical of the Pharmacy Industry Award (‘PIA’), which will apply from 1 January 2010.

Flexible working patterns

The PGA says the PIA is not economically sustainable and does not promote flexible work practices.

One of the PGA’s key arguments is that the PIA’s definitions of ‘part time’ and ‘casual’ employees will lead to an expensive change in the way the pharmacy industry employs staff because many employees currently categorised as casuals will be deemed to be part time employees.  The PGA says the definitions under current awards are more suitable as they were developed over years in consultation with unions and the industry.

This is simply not true.  The definitions of ‘part time’ and ‘casual’ employees under the PIA are very similar to the definitions under current awards.

Under the PIA, a part time employee means an employee who is engaged by a particular employer on a regular and systematic basis for a consequence of periods of employment and who is engaged to work an average of less than 38 hours per week and receives entitlements pro-rata.

Under the PIA, a casual employee is defined to be an employee engaged as such, and who does not have an expectation or entitlement to reasonable, predictable hours of work.

The Shop, Distributive and Allied Employees Association – Victorian Pharmacy Assistants Award 2000:-

• defines casual employees as those who are employed as such. They leave the interpretation of the word ‘casual’ to the general law.
• defines part time employees as permanent employees engaged by a particular employer who has systematic and reasonably predictable hours of work and who is engaged to work less than 38 hours per week.

How to tell between ‘casuals’ and ‘part timers’

Casuals or part timers cannot be classified only by looking at their label or their rate of pay. If an employee can expect regularity of hours and ongoing employment, they are not true casual employees. This is the law now and it will continue to be under the PIA.

The following points highlight the employment characteristics of casual employees:

• Usually work for short periods of time on an irregular basis, with their actual hours varying from week to week;
• Employed and paid by the hour and do not receive annual leave or personal leave;
• Do not have consistent starting or finishing times, or regular hours of work;
• Generally contacted regularly and asked to work, rather than just knowing when they are required;
• Have no expectation of ongoing work; and
• Are free to refuse to work at any time due to other commitments.

The following points highlight the employment characteristics of permanent part time employees:-

• Usually work on a regular basis with a set roster;
• Are employed on an ongoing basis; and
• Are entitled to receive entitlements such as annual leave and personal leave, proportioned to the number of hours they work.

The risks of getting it wrong

Employers who have incorrectly classified employees as casuals risk being liable for penalties for contravention of the award and exposure to considerable back-payments for entitlements such as annual leave.

One way to do this is to introduce a workplace agreement which allows you to hire staff as part time employees with wage rates which spread leave entitlements across the pay cycle. This means, just like casuals, you won’t have to pay staff when they do not work. If you are already paying above the award, wage rates will probably stay the same or drop when compared to the casual rates you have been paying.

This method also protects you from exposure to a claim for back-pay from disgruntled ‘casuals’ who believe they should have been paid annual leave and sick leave for the whole time they have been working for you.

The PGA says the industry has not traditionally embraced workplace agreements, but they are the only way to lawfully modify award conditions in this way.

There’s no time like the present. The threshold test for introducing an agreement changes from 1 January 2010 from the ‘No Disadvantage Test’ to the ‘Better Off Overall Test’ and as the names suggest, the current test is easier to meet.

If you currently employ staff as ‘casuals’ but their working patterns are more like part time employees (refer to the bullet points above to check), you should ask MST to audit the way you engage staff.

Author: Richard Scougall