CHANGED EARNINGS BASE DEFINITION FOR SUPERANNUATION

From 1 July 2008, as part of the Government"s plan for "simpler Superannuation", "ordinary time earnings" (OTE) will become the only earnings base used to calculate the superannuation guarantee obligations of all employers. This means that any employers using alternative earnings bases (such as "superannuation salary" in a relevant award or trust deed) will need to adopt OTE as their earnings base from 1 July 2008.

What do you need to do?

Prior to the 1 July 2008 transition date employers should review the earnings base for all employees to ensure you are calculating your super contributions based on ordinary time earnings. If you are not using OTE as your earnings base, your superannuation guarantee contribution obligations may increase from 1 July 2008, especially as certain employee allowances may fall within the definition of OTE.

Why the change?

Superannuation guarantee legislation was introduced in 1992 to introduce a minimum requirement for employers' superannuation contributions. This legislation referred to the use of a "notional earnings base" (NEB) for the calculation of an employer’s superannuation guarantee obligations in certain cases. As a result, some employers currently pay superannuation on an earnings base that existed before the super guarantee was introduced. This means an employee may be paid lower super contributions (as a proportion of total remuneration) when compared with another employee in similar circumstances.

The new law standardises the earnings base to ordinary time earnings (OTE) for all employees.

For more information, please visit this page on the ATO website

WORKPLACE RELATIONS FACT SHEET NO LONGER REQUIRED

Changes to the workplace relations system came into effect 28 March 2008 with the commencement of the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008.

These amendments begin the transition to a new workplace relations system and give effect to key Government election commitments to implement a fairer and more productive workplace relations system.

The key provisions of the Transition to Forward with Fairness Bill:

• Prevents the making of new Australian Workplace Agreements (AWAs);
• Allows employers using AWAs as at 1 December 2007 to offer Individual Transitional Employment Agreements (ITEAs) to new employees and employers already on AWAs, for the transition period while award modernisation takes place;
• Introduces a genuine no disadvantage test for new collective agreements and ITEAs;
• Enables the Australian Industrial Relations Commission (AIRC) to undertake the process of award modernisation; and
• Removes the requirement for employers to provide the Workplace Relations Fact Sheet to their employees.

DEALING WITH RECURRING EMPLOYEE ABSENCE

An employee needs to be made aware that all absences must be accounted for. Many employers conduct informal return-to-work interviews. These need to be handled sensitively, but should be carried out. Both the employee and the person carrying out the interview should sign a form confirming that a return-to-work interview has been carried out. These forms should be kept with the employee’s records and reviewed should absences become a concern to the employer.

The purpose of the return-to-work interview is to try to establish whether the absences will be recurring and if there is any reason for concern by the employer. This may depend on the employee's absence record and any emerging pattern of absence, such as "regular" Mondays taken as "sick leave" when there seems to be no genuine medical reason for this to keep occurring.

Clients of Your HRmanager Retained Employer Advisory Service can easily download a "Return to Work Employee Interview Form" from the Your HRmanager Online Library