The Site Shed

The 5 Biggest Mistakes Trade Businesses Make with Their HR Compliance | ft. Kristy-Lee Billet | Ep.387

November 08, 2023 Matt Jones - Trade based business enthusiast Episode 387
The 5 Biggest Mistakes Trade Businesses Make with Their HR Compliance | ft. Kristy-Lee Billet | Ep.387
The Site Shed
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The Site Shed
The 5 Biggest Mistakes Trade Businesses Make with Their HR Compliance | ft. Kristy-Lee Billet | Ep.387
Nov 08, 2023 Episode 387
Matt Jones - Trade based business enthusiast

Discover the crucial HR compliance mistakes that trade businesses frequently make and how to avoid them. In this insightful video, we delve into the top five pitfalls that could cost your business dearly. From understanding legislation to proper documentation, we cover it all. Don't let HR compliance be your downfall. Watch now to safeguard your trade business from costly errors.

Watch the video version of this podcast at https://youtu.be/2IWT3TFvAFU

Discussion Points:
00:00:42 Tips for managing people effectively in HR.
00:05:29 Businesses facing underpayment claims cost millions, HR knowledge lacking.
00:07:40 Friendship often undermines professional relationships at work.
00:12:24 You don't need to know everything in business.
00:14:05 Australian subcontractor system has complex award system.
00:18:07 Individuals push for contracting, employers bear risk.
00:20:33 Different RDO systems implemented by businesses.
00:23:45 Individual flexibility agreements (IFAs)
00:27:02 Fair Work Act covers employees.

Resources:
👉Visit People Powered Business’s website: https://www.peoplepoweredbusiness.com.au/
👉Get social with Kristy on LinkedIn at https://www.linkedin.com/in/kristyleebillett/ and Facebook at https://www.facebook.com/groups/hrsupportaustralia
👉Get in touch with Kristy at kristy@thefootprintgroup.com.au
👉Get access to the FREE Guide on Dealing with Problem Employees - https://www.peoplepoweredbusiness.com.au/problememployeeguide

Have a conversation with us! Go to tradie.wiki/pod and book a call.


Check this out:

Connect with me on LinkedIn. For more podcast episodes, you can also visit our website.

Thank you for tuning in!

If you enjoyed this podcast and this series, please take 5 to leave us a review:

Show Notes Transcript

Discover the crucial HR compliance mistakes that trade businesses frequently make and how to avoid them. In this insightful video, we delve into the top five pitfalls that could cost your business dearly. From understanding legislation to proper documentation, we cover it all. Don't let HR compliance be your downfall. Watch now to safeguard your trade business from costly errors.

Watch the video version of this podcast at https://youtu.be/2IWT3TFvAFU

Discussion Points:
00:00:42 Tips for managing people effectively in HR.
00:05:29 Businesses facing underpayment claims cost millions, HR knowledge lacking.
00:07:40 Friendship often undermines professional relationships at work.
00:12:24 You don't need to know everything in business.
00:14:05 Australian subcontractor system has complex award system.
00:18:07 Individuals push for contracting, employers bear risk.
00:20:33 Different RDO systems implemented by businesses.
00:23:45 Individual flexibility agreements (IFAs)
00:27:02 Fair Work Act covers employees.

Resources:
👉Visit People Powered Business’s website: https://www.peoplepoweredbusiness.com.au/
👉Get social with Kristy on LinkedIn at https://www.linkedin.com/in/kristyleebillett/ and Facebook at https://www.facebook.com/groups/hrsupportaustralia
👉Get in touch with Kristy at kristy@thefootprintgroup.com.au
👉Get access to the FREE Guide on Dealing with Problem Employees - https://www.peoplepoweredbusiness.com.au/problememployeeguide

Have a conversation with us! Go to tradie.wiki/pod and book a call.


Check this out:

Connect with me on LinkedIn. For more podcast episodes, you can also visit our website.

Thank you for tuning in!

If you enjoyed this podcast and this series, please take 5 to leave us a review:

Kristy-Lee Billet [00:00:00]:

Yeah, like 17 and a half percent loading when they take annual leave. I don't know any employees these days that I need to encourage to take holidays.

Matt Jones [00:00:06]:

Right.

Kristy-Lee Billet [00:00:06]:

They're pretty keen to take them.

Matt Jones [00:00:07]:

Yeah, exactly. Is it? Wow. Seven and a half percent. That's insane. Christy Lee. Welcome back to the Siteshed podcast.

Kristy-Lee Billet [00:00:32]:

It's great to be back with you, Matt.

Matt Jones [00:00:34]:

In the first episode, I called you Christy. In this episode, I'm going to call you Christy Lee. Just throw some Spanners in the works.

Kristy-Lee Billet [00:00:40]:

Yeah. Okay, cool.

Matt Jones [00:00:42]:

So thanks for coming back. This is the second conversation we have had in relation to HR and basically skills that, as business owners, we need to have when it comes to managing people. The first episode, we were talking about managing expectations and mastering difficult conversations. And in that episode, we jumped into some really cool nitty gritties about how to formulate different frameworks for conversations and how to record and document and basically things that you need to make sure that you're well, I suppose a number of reasons. First of all, to make sure that you're equipping your team with the best possible chance for success. Second of all, to make sure that you've got a paper trail of the things that you've discussed. Third, so you can build out relevant training to support them further. And I suppose, lastly, in the instance where you may need to recall some of these meetings for the purpose of performance management, you've got something there to pull back on.

Matt Jones [00:01:45]:

So if you guys did miss that, go and cheque it out. Much of what we're going to be talking about today will likely stem from that foundational conversation back there. So go cheque it out. Christy, you're from peoplepoweredbusiness.com au, and this is kind of your jam, the HR world.

Kristy-Lee Billet [00:02:07]:

Yeah, it really is. It's really riveting reading HR legislation half of my day. But I guess I feel a responsibility to help business owners interpret the complexities of HR legislation because it's not easy, unfortunately. And we're in a particular phase, certainly locally here in Australia at the moment, where more and more rules are being added, and it's getting more and more complicated and it's only getting harder for business owners, unfortunately. All these rule changes are very pro employee, so we've just got to be on top of our game.

Matt Jones [00:02:39]:

Was it Kerry Packer who said, slightly different context, but if you're going to create you said it to the government. I'm paraphrasing here, but it was something along the lines of, how about if you create a new rule, you've removed another one, so people can actually keep on top of all these new rules.

Kristy-Lee Billet [00:02:55]:

That keep popping up. Exactly. And the problem is, no one's really doing a great job of informing us business owners, generally of what's going on. So unless you're actually looking and who's got time for that, you wouldn't know about these changes that are just rolling on through and there's going to be more coming.

Matt Jones [00:03:14]:

So in this episode, we're going to talk about the five biggest mistakes that trade businesses make with HR compliance. I'm guessing there's a lot more than five. So is this the five key ones?

Kristy-Lee Billet [00:03:25]:

I guess I've tried to keep the five big ones. Yeah, like there are a million that we, you know, everyone makes, but there's probably five most common and, you know, biggest risk ones.

Matt Jones [00:03:39]:

What I advise clients in relation to creating content, I said just answer the five biggest questions you get asked.

Kristy-Lee Billet [00:03:47]:

There you go. Pretty much that's what we're going to be asking.

Matt Jones [00:03:50]:

I'm going to get a coffee and.

Kristy-Lee Billet [00:03:51]:

I'll leave me to it. Yeah.

Matt Jones [00:03:57]:

Anyway, let's jump right in. So what are some of the things that we're going to discuss here today?

Kristy-Lee Billet [00:04:03]:

Well, look, I thought these five mistakes really do cover off all the key risk areas, essentially when it comes to HR compliance. And I guess to frame this up, if you own a business in Australia, pretty much you are covered by the same HR legislation, which is the Fair Work Act and the Modern Award. You know, that is the world that we play in here in Australia. If you're overseas, you're going to have your own, obviously, legislation. But some of these mistakes will apply universally, no matter which legislation you're playing in. But we are all covered by the same laws, which makes it really easy to chat about in that sense. And the number one mistake that we make is we don't understand the world we're playing in, the rules, the legislation, because you can create whatever you need to within them if you understand the world you're playing in. But most business owners don't understand it.

Kristy-Lee Billet [00:04:53]:

It is hard. Like it's really not simple. And they just stick their head in the sand and just think, well, I'll deal with it if it becomes an issue. The problem is when it becomes an issue, it becomes a very, very expensive issue to deal with. So a lack of understanding about what the legislation is, what it means for your business, which parts apply, which parts don't, and how you have to run your business and your team around, that is the biggest issue that we've got.

Matt Jones [00:05:17]:

Is it the same issues that tend to emerge in different size businesses or is the bigger business just the bigger problems at bigger scale?

Kristy-Lee Billet [00:05:29]:

Yeah, well, I mean, we see in the news over and over again these big businesses being done for underpayment claims that are costing across all industries, costing them millions and millions of dollars. So you would expect that a business that has a HR team in place or a HR professional in place should be getting it right. But just yesterday, I had a call with a business with a HR person in place, management level, not a junior, and they didn't know a fundamental piece. I e. Their employees are award covered, that's going to really cause them some headaches with something they're trying to do at the moment. So you would suspect that once you hit the point where you're large enough to need internal HR, you should have a good level of understanding in the business via that professional person. So largely this does apply to smaller businesses, but I would say larger businesses are certainly not exempt, or they wouldn't be getting themselves in the hot water. They seem.

Matt Jones [00:06:20]:

Yeah, I feel like sometimes the bigger these businesses get, the more exposed they become and the more sitting ducks they become.

Kristy-Lee Billet [00:06:28]:

Well, an issue that might cost $1,000 per employee multiplied out can get pretty big pretty quickly.

Matt Jones [00:06:35]:

I suppose, at a conceptual level, a lot of these obligations probably I mean, we've got a lot of listeners that aren't located locally in Australia. But I imagine that conceptually, these rules probably still apply on some level, whether that be moral or legal.

Kristy-Lee Billet [00:06:52]:

100%. Yeah. Well, it's understanding the legislation wherever you're located and wherever your team are located. I was having a conversation with someone last week who's employing someone who's outside of Australia. I think they're in the Philippines and wanted an employment contractor. I don't know Philippines employment law, and you need to find someone that does to get that right, because it's different to ours. And I knew that it was different, but I don't know it well enough, so I'm not the person for that. But wherever you're located, there will be industrial relations legislation that you must get your head around.

Kristy-Lee Billet [00:07:25]:

And if you can't get your head around it, by all means go and engage an expert. But wherever you're located around the world, this same issue applies. It's getting an understanding of the laws where you are based and where your employees are based, if they're remote or international.

Matt Jones [00:07:40]:

There's a lot of that scenario that you see popping up when team members come to work in a business, and it's sort of the spit in the handshake kind of thing, or they're just a friend. And a lot of these policies or obligations kind of get left at the wayside just based on the whole relationship that they might have had in the lead up to that point. And I've seen that come unstuck heaps of times, actually. Truthfully, only a couple of weeks ago, one of the girls I trained with, she was starting up a business, and I just with a friend of hers, and I said to her, listen, I know you guys are friends right now.

Kristy-Lee Billet [00:08:19]:

Yes.

Matt Jones [00:08:20]:

But trust me, I connect a business.

Kristy-Lee Billet [00:08:23]:

With someone is not something you do lightly when you're new to it.

Matt Jones [00:08:28]:

And it's so common because people are like, oh, we'll just go and do this together because we're friends. And it very rarely pans out in the long run. But the point I was just saying to her, I'm like, listen, I know you guys are mates, but just get this drawn up properly. Because regardless of whether you're mates or not, you want to have something that you can go back to in the instance that something does go pear shape, which they did, to their credit. But anyway, I bring that up just because I'm just wondering if you see that a lot as one of the obstacles. What are the obstacles?

Kristy-Lee Billet [00:09:04]:

Yeah, look, that's certainly one of them. My mate does this, so it's totally fine for me to do this. No, it's not. Or people going into, as you said, those relationships because they've got friends subcontracting to them or working directly for them as employees. I see a lot of family businesses where actually, just a few weeks ago, I was helping someone. Two brothers own the business. The wife of one of the brothers is running the team. They've got zero structure.

Kristy-Lee Billet [00:09:31]:

They're all in disagreeance on compliance issues, amongst other things, and it's a mess.

Matt Jones [00:09:38]:

Good old family business with family.

Kristy-Lee Billet [00:09:41]:

Yeah. Tricky, tricky, tricky. Every time I see some people do it really well, where there's really clear parameters. But that's certainly a scenario where I see all the best intentions going in, but it can turn pear shaped very quickly. But, yeah, in trades, businesses especially, I see a lot of, well, that's how they did it at my last place. This is how my mate does it. He said it's fine to do none of that. Could be further than the truth.

Kristy-Lee Billet [00:10:08]:

So that's one of the traps I certainly see.

Matt Jones [00:10:11]:

Yeah, it's a slippery slope. I suppose the reason why this podcast exists is essentially to bring light to some of these conversations. Because it's true, when you're used to doing something a certain way, you don't really get exposure to alternatives until perhaps it's too late. I've said this story a million times on the show, but when I was an apprentice and I was working for a maintenance plumbing company in Sydney, at about my third year, I left and went and worked for another company. And in that company they were using, I mean, back then it was innovative. They had these credit card transactions from Westpac that were lunchboxes. They were the biggest. It was like a satellite.

Matt Jones [00:10:55]:

It was insane. But back then it was like pretty good tech. And I was like, wow. I always just thought the way you rock up, you do the job, you give them a carbon copy invoice, you give one to the office lady, and then you don't get paid. And then these guys are out there taking payment on site with a credit card. And I was like, what? I never had exposure to it.

Kristy-Lee Billet [00:11:15]:

Because you're not exposed to it. Yeah, 100%. And it's the same as a business owner. No one goes into business because they want to manage people and they love HR compliance. Not one single person. So you don't know what you don't know when you're going into business. And so it's quite common to base whatever you're doing on the experience you've had either as an employee or what you've seen others around you do or asking your friends and your family who have businesses. So it's not uncommon that that's how you start out sort of thinking you're doing all the right things.

Kristy-Lee Billet [00:11:44]:

But unfortunately, as I said earlier, no one in Australia certainly, and I don't think they do this great overseas either educates us on what we need to know. We have to kind of go search.

Matt Jones [00:11:52]:

100% and it's your obligation and responsibility to do that. You can't blame the TAFE system. When you've come through as a plumber or a chippy and you don't know these things, you got to go find that information. And that's so often, I think the difference between a successful business and a successful tradesman it's being willing to go and invest in learning those things and figuring out and being humbled by it. Because truthfully, you don't know shit like.

Kristy-Lee Billet [00:12:24]:

When you come and you shouldn't have to know everything. I think as business owners we have a tendency to think we should know all the things. I remember when I was my business was quite young and I was heavily pregnant with my second child and I decided I should definitely go and do a bookkeeping course because I needed to know how to do bookkeeping. It was the dumbest idea ever. I just needed to hire a bookkeeper to know how to do bookkeeping. So I think we all have this issue where we think we need to be the experts on everything. You just need to be the experts on running your trade business and being a great tradie and leading people. You don't need to be an expert on things that go around it.

Matt Jones [00:12:55]:

Become an expert in reading reports. That's what I say to people. Let them figure it out.

Kristy-Lee Billet [00:13:02]:

Exactly your numbers. So lack of understanding is the first mistake. The second one that I see a lot in trading businesses is because we have to pay so well to get good know the market is pretty hot right now. We think that all the other little intricacies of particularly the modern award system here in Australia don't apply because we're paying so well. And unfortunately I've seen lots of businesses be very heavily exposed to potential back payment claims because they don't have the right paperwork in place. And what I will say is because you're paying so well, you absolutely don't need to worry about the little things but you got to have the right paperwork in place to protect you. So assuming that because you're paying really well and most trades businesses I know of are paying really well, that the other rules around things don't apply because they do.

Matt Jones [00:13:58]:

And so what are some of those other things.

Kristy-Lee Billet [00:14:02]:

In Australia talking about the.

Matt Jones [00:14:03]:

80 20 rule and that kind of stuff?

Kristy-Lee Billet [00:14:05]:

Well that is really in the subcontractor land, which is state number three. But really, if I talk specifically about Australia for a moment, we have a very structured award system that every trade business, all of their staff will be covered by one of the 120 odd modern awards. And those awards are complicated. Like the building and construction on site award has like a loading for basically showing up to work every day. And they've got lots like there's pages and pages of penalties and loadings that apply. And if you haven't got it documented somewhere that this amazing salary you're giving this person includes all of that stuff, they could go to prepare work and say, they haven't been paying me my penalties, I want to make a back payment claim. And I've seen it happen. The specific example that I usually use is I've seen it happen with it was actually a training company who hadn't been paying annual leave loading, which in my humble opinion, is the dumbest loading ever, because we have to pay staff extra when they're not there.

Kristy-Lee Billet [00:15:04]:

But they hadn't been paying it because they, in their mind, had incorporated it into their salary, but had never documented that. And a staff member who became a bit sour about five years into employment went to fair work, not only successfully claimed that she was owed annual leave loading, which she was obviously. Then they had to go and look at the 20 other staff that they had and what they had to do with them, and that is money they didn't need to be paying out if they had the right documentation in place. So it's those little things that you can avoid. You just got to have the right document.

Matt Jones [00:15:34]:

Now, you're right about one thing. It's definitely geared towards the employee, isn't it?

Kristy-Lee Billet [00:15:38]:

Like a oh, yes, like 17 and a half percent loading when they take annual leave. I don't know any employees these days that I need to encourage to take holidays. Right, they're pretty keen to take them.

Matt Jones [00:15:48]:

Yeah, exactly. Is it? Wow, seven and a half percent. That's insane.

Kristy-Lee Billet [00:15:53]:

And it's a bit archaic. It's back from the days when people unions were involved, people didn't take holidays, all that kind of thing, but they just haven't kept up to pace with what modern workplace looks like.

Matt Jones [00:16:03]:

I mean, that's pretty much a metaphor for Australian government right there. It should be on there should be a slogan on their t shirt.

Kristy-Lee Billet [00:16:09]:

Yes, exactly. So that's just an example of where you can really get undone with making that assumption.

Matt Jones [00:16:17]:

Okay, what's number two was it?

Kristy-Lee Billet [00:16:20]:

Yeah, that was number two. So number three you just touched on, which is really important for trades businesses, is understanding the difference between an employee and a contractor. And if you're unsure, absolutely have a conversation with your accountant because they're your tax specialists, and contracting is very heavily in tax law, as is superannuation, but just because you call them a contractor doesn't make them a contractor. They look like a duck and quack like a duck. They're a duck. It's the same with employees and contractors and trades. Businesses have notoriously been really exposed to the whole sham contracting situation where we're calling someone a contractor, but they're for all intents and purposes of an employee and we're expecting the future to look like a big crackdown on that. Yet again.

Kristy-Lee Billet [00:17:04]:

They go through phases where they get a bit obsessed with one particular thing. The ATO is currently reviewing their whole employee versus contractor decision making tool. The government is very heavily pushing employment security for all staff members and they will be looking to cramp down on contracting arrangements. So really knowing and being certain that if you are going to engage someone as a contractor, that they are a true contractor. And there are certain situations where you need to be paying your contractors superannuation. So if they fall into that category, and that is a lot of trades, contractors, because it's about supply of labour again, checking with your accountant, making sure you've got that nice and tight. And you've got good contractor arrangements in.

Matt Jones [00:17:45]:

Place, of course, as well, assuming your accountant even knows.

Kristy-Lee Billet [00:17:49]:

Yeah. Didn't want to say that, but it is a challenge. You've really got to have a great accountant.

Matt Jones [00:17:54]:

Yeah, I mean, I feel like that's one thing that you just see constantly coming up in conversation, in groups all over the place. That whole contractor versus permanent, part time versus permanent versus and I know that a lot.

Kristy-Lee Billet [00:18:07]:

Of it is the agenda is pushed often by the individual wanting to be a contractor and the employer just wanting to have this person on the team and not really caring how they're engaged. So I get that. It's often being pushed not by the employer but by the individual. But the risk sits with you as the employer. It's your house they're going to come after. If you're deemed to have had a sham contracting arrangement in place, it's you they're going to chase for superpayments and paig withholding payments. So all the risk sits with the business in this particular scenario. So even if you've got someone pushing for it and you just want to give it to them, just make sure that it's the right move and that your business is protected.

Matt Jones [00:18:46]:

Good tip.

Kristy-Lee Billet [00:18:47]:

Yeah. Number four on my list is the issue of hours and overtime. This is a real challenge. Now, I will say businesses are getting better at this, but in Australia and everywhere around the world will have a maximum number of standard working hours in a week. In Australia. It's 38. It's not 40 and certainly not 42 or 44. If you're not paying overtime after 38 hours or you don't have paperwork in place to protect you from paying overtime, an overtime back payment claim could easily be made.

Kristy-Lee Billet [00:19:22]:

Getting the hours piece right and paying penalties on weekends and those kind of things. Is a huge risk exposure for trades businesses, because the 40 hours work week is kind of still the norm, even though our legislation says 38 hours max. So anything over 38 should be overtime, unless you've got an RDO system in place or some documentation in place to say that you've already incorporated overtime into the rates.

Matt Jones [00:19:49]:

Yeah, I remember growing up as an apprentice, we always used to have the RDO thing.

Kristy-Lee Billet [00:19:55]:

Yeah. And the RDO system is still common? It's absolutely doable, and I think it's favoured by employees largely. I think employees like an RDO system. You just got to make sure you're managing it, obviously, and keeping track of everything. But employers don't love it as much because they feel like they're losing a day of productivity from the person.

Matt Jones [00:20:18]:

And it's saving them a day in wages.

Kristy-Lee Billet [00:20:23]:

It's still a very popular model and as long as you're running it properly, perfect. But lots of businesses that I work with are still expecting a 40 hours work week and there isn't an RDO system in place.

Matt Jones [00:20:32]:

And what's the best way to manage.

Kristy-Lee Billet [00:20:33]:

That depends on your business. So I've got trades businesses that I work with that implemented an RDO system, and what they've done is they have company wide RDOS, so the whole business shuts down for one, and they always are on a Friday, one Friday a month. That actually works brilliantly well for the business owners. In this case, it's the husband and wife couple, because they can do their business planning or take a long weekend, rather than if you've got the rolling RDO system you're always on, you're never off as a business owner, so I quite like that. For business owners, you can do just the rolling RDOS where you've got one person off every depending on the size of your team, but they have one RDO every four week cycle. I've got other businesses that are experimenting with different models where they're working lengthy hours for a two or three week stint and then having multiple RDOS in a row. So that works for them because they're working in rural and regional remote kind of areas and then going home for long periods. So it really depends.

Matt Jones [00:21:28]:

Kind of like the fly flow a little bit.

Kristy-Lee Billet [00:21:30]:

Yeah, almost like a variation of the fly flow kind of model. So you can with the right documentation, you can make all of this happen. But most of the trades awards allow for the standard one RDO accrual per four week cycle. As long as you're averaging 38 hours a week, it's totally fine to do.

Matt Jones [00:21:50]:

Yeah. Interesting. And is there like, technology to track that? I found this was an issue 20 OD years ago when I was plumbing, where people would just say they're putting in for overtime and not doing it. How do you track it?

Kristy-Lee Billet [00:22:06]:

Yeah, look, the overtime in the RDO system is tricky. Systems like zero track things really well and you can get plugins to zero that are very effective for managing hours and timesheeting. I mean, the zero timesheet model is great on its own, but you can definitely get more advanced plugins to help with that. If you're going to run an RDO system, the simplest way is just to structure the hours. So it's one RDO every four week cycle. You work a 40 hours week for three weeks and then a 32 hours week effectively the next week. But then other companies run it where they're accruing time in lieu for overtime and that's where it does get really complicated and there's no one particular system. Some of the zero plugins are very good for managing that, but you've then got to manage in a more manual level to make sure people aren't accruing too many, they're taking them with them in the right time frame and it's not becoming a liability in terms of you holding on to that accrual.

Matt Jones [00:22:58]:

Yeah, sure.

Kristy-Lee Billet [00:22:59]:

So it's a tricky one and the final one, which really underpins all of them. And this applies to everyone wherever you're based. Poor documentation is the biggest risk. Businesses have terrible employment contracts, no supporting documents for these other issues we've spoken about. So in Australia, we would have an employment contract. And then if we want to vary award conditions, like have a great salary but have all these other bits and pieces included, we usually need a second document called an. Individual flexibility agreement or a very tightly claused employment contract, which really details all the inclusions but fair Work recommends, and I tend to suggest, having both of those documents working together.

Matt Jones [00:23:41]:

What did you call it? Independent flexibility agreement.

Kristy-Lee Billet [00:23:45]:

Individual flexibility agreement, yeah. Or an IFA they're often referred to as never heard of. Yeah, they are one of the best documents you can have in place to protect you. If you are an employer that's paying above award or a high salary or great hourly rate and you're not paying all these other bits and pieces like annual leave loading industry allowance, that's the one for just showing up for the day. Your travelling allowances, leading hand allowances there's like a million in the building and construction on site award. For example, you're meant to be paying for your employees steel cap boots if they're required to wear them for work. So all of that stuff can be detailed in one of these IFAs to say we've already compensated for all of that in this high rate of pay. None of that's being paid, it's all been compensated gotcha and the employer obviously needs to sign off on that.

Kristy-Lee Billet [00:24:33]:

So having that kind of paperwork totally protects you. Good position descriptions will protect you when you want to performance manage someone. So just having really solid HR documentation is one of the biggest mistakes I see people make just not having it at all. Or I see a lot of that whole I just took my employment contract from my last job. I'm going to use that without checking. That it actually I reviewed one for a building business not that long ago and thankfully the one clause they needed was in there, but I don't know where he pulled it from. It was on some very official letterheads, but the clauses were completely wrong, didn't relate to the award at all. They weren't the right wording, they weren't the right number, so it wasn't going to protect him at all from any potential issues.

Kristy-Lee Billet [00:25:17]:

So pulling your old employment contract and just using it in your business is not what I recommend.

Matt Jones [00:25:22]:

Yeah, sure. So does that essentially mean that I'm guessing you don't have to have an individual you can still use a template as long as it's current, right?

Kristy-Lee Billet [00:25:33]:

Yeah, you can grab it like there's employment contract templates you can purchase or you can get right for you.

Matt Jones [00:25:39]:

Yeah, I just had a lawyer rewrite ours, actually, and it's still templated for the whole whoever comes aboard. But it is customised for us.

Kristy-Lee Billet [00:25:48]:

Yeah, exactly. There's templates you can get and if you're following all of the award conditions, use a template like you're totally fine because you're following the award anyway. It's when you're changing things and not paying things per the award, like those little allowances. That's when you really do want to make sure that you're really covered. Either that the contract's being customised to cover you, or you've got that second IFA document in place, which again, there's templates for you just got to make sure you create it.

Matt Jones [00:26:15]:

Yeah, some of these associations have some good templates too, like the Master Builders and HIA and that kind of stuff.

Kristy-Lee Billet [00:26:21]:

If you're a member of one of those cheque there first because you're already paying for that subscription and I find they're pretty good at providing the contract templates. They're not always as great at pointing out that if you're not doing these things per the award, you need this other document. Just make sure you're checking that.

Matt Jones [00:26:38]:

Yeah, exactly. Awesome. Well, that's helpful. So give us a recap on those five.

Kristy-Lee Billet [00:26:45]:

So these are the broadest top five. A lack of understanding of the legislation wherever you're based, just knowing what the rules are, paying above the market or the award, and therefore assuming that the other laws don't apply to you.

Matt Jones [00:26:58]:

Just on the first one, is there state to state?

Kristy-Lee Billet [00:27:02]:

Good question. Yeah. So no, the Fair Work Act and the award system is national in Australia, so as long as you're a non government employee or business, so you're a PtyLtd company, your staff will be covered by the Fair Work Act and the Modern Award that's relevant for them. I will say that it's quite common you would have more than one award active in your business, which just complicates things a little further. But not everyone may be covered by the same award. But workplace health and safety legislation, on the other hand, is still. State and territory based, which is frustrating.

Matt Jones [00:27:37]:

Sorry to interrupt.

Kristy-Lee Billet [00:27:38]:

Yeah, no problem. So, number two is paying well above, so expecting that other things don't apply. Number three is knowing the difference between employees and contractors and making sure you've got the right engagement in place, understanding hours requirements and making sure that you're protected and paying appropriately for the hours. And number five is just poor documentation across the board, which can be so easily fixed and it will protect you from so much of the risk that's out.

Matt Jones [00:28:04]:

Awesome. Great. Well, thank you so much for that recap. Where can the listeners get hold of you? And by the way, give you let us know a bit about your podcast.

Kristy-Lee Billet [00:28:15]:

Oh, yeah, great. So my podcast is the people powered business podcast. It's a weekly podcast, drops every Wednesday, wherever. You love listening to podcasts and we talk about all things people in business. So some of it is technical HR, but I try and steer clear of that where possible. So I put everyone to sleep. But we talk about leadership and people management and all the regular challenges that we face in business with people. So, yeah, the people powered business podcast.

Matt Jones [00:28:39]:

And is that the best place for people to get hold of you if they need some more information?

Kristy-Lee Billet [00:28:43]:

Yeah. Via the podcast us or just over@peoplepoweredbusiness.com au. You can reach me there. And Christy Lee billet on.

Matt Jones [00:28:50]:

And guys, if you've got any feedback, once again, or if we've missed anything and you want us to dive a little bit deeper, let us know in the comments and we endeavour to get back to you with those answers. So, Christy, thanks so much for your time. It's been a great series. Yeah.