Tis the season… to recruit, train and retain staff

In our new series, we outline the top issues the fashion and beauty sectors need to consider in preparing for the Christmas holiday period. In this first update, we explore the legal considerations in hiring, training and retaining staff.

There are less than five weeks until Christmas, which, for many retailers, will be the busiest time of the year. With significant increases in online and in-store purchases and extended trading hours, staffing is high on the priority list. This applies to staff for brick and mortar stores, pop-up retail outlets and e-commerce stores.

Many retailers have started their recruitment processes early, with jewellery retailer Michael Hill launching its Christmas recruitment drive in October, aiming to hire 1,200 people across Australia, New Zealand and Canada.

Strandbags is also battling for new staff, reportedly aiming to hire 500 people for the Christmas season. The company is offering new employees a free bag, a 40% staff discount, and paid time off on their birthdays.

Despite retailers using creative recruitment tactics, Deloitte’s latest Access Economics Retail Forecasts report noted that retail job vacancies have ‘more than doubled’ since May 2019, ‘with no signs of slowing down’. The shortages have retailers concerned about how they may keep up with the increased demand over the busy period. This is in addition to reports of another potential COVID-19 wave expected to hit Australia in the next few weeks. Despite there being no mandatory isolation period, this still means that staff may be unwell and unable to work.

Retailers need to be aware of their legal requirements when preparing for both an influx of new staff and also unexpected staff shortages.

The nuances of casual employment

As retailers engage short-term labour to cover the Christmas rush, it is important to understand the nuances of casual employment as opposed to permanent full-time or part-time employment.

In the last 18 months, there have been various amendments to the Fair Work Act 2009 (Cth) (Fair Work Act) relating to casual employment, including to clarify the definition of a casual employee, the purpose of the casual loading, and to introduce an entitlement for long-standing casual employees to seek conversion to permanent employment.

It is important for retailers engaging employees on a casual basis to ensure the employment contracts reflect this and a clearly identifiable casual loading of at least 25% is paid to casual employees. Failing to get this right may expose retailers to penalties and future claims where employees may allege the employment was truly permanent in nature and seek compensation for entitlements owed to permanent employees.

Retailers should also be aware that they must provide all new casual employees with a copy of the Casual Employment Information Statement and the Fair Work Information Statement published by the Fair Work Ombudsman upon commencement of employment.

Compliance with underpinning industrial instruments

When hiring new staff and managing current staff, it is important that retailers are aware of their employee’s entitlements under the applicable industrial instrument. The General Retail Industry Award (GRIA) underpins the entitlements of most employees and employers in the general retail industry. It outlines the pay rates, allowances and rules for all workers in the Australian retail industry.

Failing to comply with the terms of an industrial instrument, such as the GRIA, may expose employers to underpayment claims and penalties.

Recently, Sydney café chain 85 Degrees was fined $475,000 by the Federal Court for exploiting Taiwanese students under the guise of a purported internship arrangement.

An investigation by the Fair Work Ombudsman found that between July 2016 and June 2017 eight Taiwanese students (aged 20 to 22) on a working holiday visa were underpaid between $50,213 and $58,248 over a period of under 12 months. They were working in factories and retail stores of the brand in Sydney, performing up to 60 to 70 hours per week and encountering difficulties communicating in English. This may be an extreme example, but it serves as a reminder that employers must be aware of the lawful minimum pay rates that apply to all employees for all hours worked regardless of a worker’s age or visa status.

Common compliance issues to be aware of over the Christmas period include:

  • the trigger of overtime penalty rates. Under the GRIA, employees are entitled to overtime penalty rates when they work outside their ordinary hours or a set span of hours. As store trading hours are extended over the Christmas period, it is important to be familiar with what penalty rates apply and how many additional hours individual employees may be working.
  • mandatory break between shifts. The GRIA provides that employees must have at least a 12-hour break between shifts or will otherwise be entitled to penalty rates of 200% until they have had a 12-hour break. Retailers should be careful to ensure employees have a sufficient break between shifts on consecutive days, particularly when they are rostered to cover late-night shifts.
  • minimum periods of engagement for casuals. In most cases, the GRIA requires casual employees to be paid for a minimum engagement period of three hours per shift. If retailers are looking to engage staff to cover short periods (eg providing additional support over lunch), these shifts must be at least three hours in duration.
  • when employees become entitled to paid and unpaid breaks. The GRIA provides different break entitlements for employees depending on the duration of their shifts.
  • changes to part-time hours. It may be necessary to roster part-time employees on alternate shifts during this period. Under the GRIA, changes to part-time employees’ ordinary hours (whether temporary or permanent) must be agreed in writing. Failing to record this agreement in writing may unnecessarily trigger an obligation to pay part-time employees overtime penalty rates.

Retailers should familiarise themselves with the requirements under the applicable industrial instrument and ensure their rostering and overtime practices remain compliant despite extended Christmas hours.

Engaging early-career staff

Retailers should keep in mind that engaging junior staff (ie high school and university students) is permitted and can be a cost-effective solution to staff shortages. Not only does this provide an opportunity for young adults to gain some work experience, it often provides greater rostering flexibility for employers.

Under the GRIA, junior staff (between the ages of 15 and 20) can be engaged for a percentage of the minimum pay rate for adults.

The GRIA also permits some junior casual staff to be engaged for less than the minimum period of three hours in circumstances where the employee is:

  • a full-time high school student;
  • engaged to work between 3.00pm and 6.30pm;
  • the employee (with approval from their parent or guardian) agrees to work less than three hours; and
  • longer shifts are not available either because of the employer’s operational requirements or the employee’s availability.

When employing staff under the age of 18, keep in mind that their parent or guardian may also be required to sign their employment contract and other workplace agreements.

Ensure your staff are trained

Smart Company reported that of the 20 largest employment sectors, retail manager positions were the most difficult to recruit. If a retailer has a shortage of supervisors or senior staff members, it will be even more difficult for new hires to learn.

With a large pool of new recruits, new starters must be adequately trained on the company’s policies, including workplace health and safety. As it is a busy period, it can be easy for retailers to prioritise customer orders or busy marketing campaigns over staff training.

The Work Health and Safety Act 2011(NSW) provides a framework to protect the health, safety and welfare of all workers and others in relation to NSW workplaces and work activities. Similar obligations apply under the relevant work, health and safety legislation in each state and territory of Australia.

To minimise the risk of breaching workplace health and safety laws, employers should consider the following:

  • implement a standardised induction and workplace safety training for new workers;
  • train workers for the specific tasks they will have to perform;
  • commit to appropriate supervision of workers, assign another staff member as a new starter's buddy; and
  • support and promote regular refresher training.

Retailers need to be aware of their ongoing employment obligations, even throughout the festive season. In our next article, we will discuss how to avoid workplace injuries that could lead to a worker’s compensation claim and an employer’s requirement to comply with record-keeping and payslip obligations.

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