FibreHR Blog

We share some of our recruitment strategies in our blog. FibreHR, your people are our business.

Workers Compensation for Pre-Existing Injuries

Lisa Spiden - Friday, April 17, 2015


fibreHR recently attended an Advanced Work Cover Claims course presented by a legal firm which brought attention to the legislation surrounding whether an employee has an entitlement to workers compensation where a pre-existing injury or disease exists.  The legislation states that employees have an entitlement to compensation where work is found to be a significant contributor to the recurrence, aggravation, acceleration, exacerbation or deterioration of any pre-existing injury or disease.

Work Cover claims can be extremely costly to a business so it is important that businesses take steps to protect themselves against work cover claims wherever possible. One way of reducing liability is by ensuring employees are asked to disclose any pre-existing injury or disease that relates to or may impact the role they are applying for. This information can assist in disputing a claim where the business believe that an injury, disease or a recurrence, aggravation, acceleration, exacerbation or deterioration to a pre-existing condition not as a result of work but instead due to a pre-existing injury or disease.  It is important to note that where an employer wishes to dispute a claim, such disclosure may form part of an investigation arranged by the work cover agent and would be considered in conjunction with a range of other factors to determine whether the claim is accepted or rejected; therefore the disclose should not be solely relied upon.

There is a very fine line that needs to be walked in asking for information about pre-existing injuries or medical conditions. If the information is not dealt with correctly, the actions or inactions of an employer may constitute discrimination where it is found that the action or inaction was as result of becoming aware of the pre-existing medical information. You can certainly ask if the employee has a pre-existing injury or medical condition that may prevent them from completing the specific job for which they have applied however, to do this you would need to outline the specific duties required in the role e.g. sitting for four or more hours continuously or lifting up to 5kg packages. As the requirements for positions vary significantly, a generic form may not suffice. You cannot discriminate against a person for a pre-existing injury or medical condition that does not affect their ability to perform the inherent requirements of the role. It is very important that this is understood otherwise you may find yourself defending a discrimination claim.  

fibreHR recommends updating your current Application form and New Starter Form to contain a disclosure statement regarding pre-existing injuries, this statement needs to include relevant clauses of the Workplace Rehabilitation & Compensation Act 2013 in order for the disclosure to be considered valid. Within this disclosure statement we recommend stating key duties of the role and requesting employees outline their capacity to perform these duties. The key duties must be comprehensive in nature and should include things such as sitting at a desk for extended periods of time, manual handling, driving extended distances and tasks of a repetitive nature such as typing, where relevant to the role. Whilst some duties may be seen to be standard requirements such as standing or sitting, it is important these are outlined in the role in order to understand whether any pre-existing injury or disease may be affected by such duties.

fibreHR are able to review and update your Application form and New Starter Form with a pre-existing disclosure statement which meets legislative requirements. For further information or to arrange a review of your current new starter forms, please give us a call 03 9205 5800.

Maximum Super Contribution Base

Lisa Spiden - Wednesday, March 11, 2015

Employers are required to make compulsory superannuation contributions to a complying superannuation fund, on behalf of employees under the age of 75 years. These contributions count towards an individual’s Maximum Superannuation Contribution Base (MSCB) with the current contribution rate sitting at 9.5% of an employee’s ordinary times earnings. This rate is expected to remain unchanged until 30 June 2021.

Each year, the ATO release the superannuation rates and thresholds which includes a MSCB cap. This cap is particularly important for employers as it stipulates the maximum compulsory contributions they are required to make on behalf of their employees. The MSCB cap must be considered in conjunction with the employment contract as the structure of an employee’s salary will determine whether contributions must continue to be made once the cap is reached or whether an individual employee can nominate and enter into an agreement with the employer as the how the amount is to be paid once the cap is reached.

The 2014/2015 annual MSCB contribution cap is $197,720. This means that an employer is only legally required to make superannuation contributions on earnings up to the MSCB of $197,720 in the 2014/2015 financial year, this equates to $197,720 x 9.5% = $18,783.40 superannuation per annum.

As mentioned, employment contracts play an important role in determining what happens once this cap has been reached. Let’s explore a few examples:

Example 1

The employment contract stipulates a remuneration package of $300,000. We know that the employer is legally required to make superannuation contributions of 9.5% on a maximum salary of $197,720 which equates to $18,783.40. Because the remuneration is a package and does not stipulate how it will be structured, once the MSCB cap is reached the employer is no longer legally required to make the contributions however, they must ensure the employee receives their total package so they can:

a. continue to make superannuation contributions past the cap or

b. the employee can chose to take all earnings above $197,720 as cash

c. the employee can chose what split of cash versus superannuation they would like to take after they have met the $197,720  threshold.   

Example 2

The employment contract states that an employee is paid a base of $250,000 plus superannuation. This may be interpreted in two ways and should be clearly clarified in the contract of employment

Package

Example 1 (9.5%)

Example 2 (MSCB application)

Base salary

$250,000

$250,000

Superannuation

$23,750

$18,783.40

Total Package

$273,750

$268,783.40


You can see from the above example, there is a difference of almost $5,000 per year based on how the packages are interpreted. For this reason, it is crucial that contracts are written very clearly as either a “total package” method or define how the base salary and superannuation will be treated.

It is worth noting, that the treatment of superannuation on bonuses should also be clearly defined in writing as if the MSCB has been reached superannuation may not be required to be paid. Again this will depend on what terms have been set out in the employee’s contract or bonus letter.

Where the cap is reached and the employee wishes for the employer to cease any further contributions to their superannuation, it is strongly recommended that such notification is obtained in writing and retained on the employees file. The notification should also include details relating to the employees instructions with regards to where and how the additional funds should be deposited. Where written notification is not provided by the employee, it would be wise to continue the arrangement of making superannuation contributions.  

This is can be a complex topic and your legal obligations to pay or receive superannuation payments above the MSCB can vary based on one or two words in an employment contract or letter. It is therefore recommended that you seek advice before changing practises for existing or new employees. If you require any further information regarding the Maximum Superannuation Contribution Base please contact fibreHR on 03 8413 0200. 

Coca-Cola says goodbye to voicemail

Lisa Spiden - Wednesday, January 14, 2015
Coca-Cola says goodbye to voicemail! We’d love to hear your thoughts, is this a good or bad idea?
Click Here for an interesting read!




Would you like your CEO to send a letter to your parents?

Lisa Spiden - Wednesday, January 14, 2015
What a great initiative by Pepsi CEO Indra Nooyi, thanking parents for their sons and daughters efforts! How would you feel if your parents received a letter from your boss?




Merry Christmas

Lisa Spiden - Tuesday, December 23, 2014

The fibreHR team would like to wish you all a wonderful Christmas and a brilliant New Year! Thanks to all our wonderful clients and candidates, we have had a wonderful year and this is as a result of all the great people we have worked with. 

Merry Christmas to all, 

Lisa, Clarissa, Christine, Taryn, Lucinda and Clair. 

xoxo 



Commonly Misspelt words

Lisa Spiden - Thursday, December 18, 2014
This is a fun little article on commonly misspelt words, we see a lot of these on resumes. Have a great Thursday
Click Here for a fun read :)



fibreHRs Christmas Party

Lisa Spiden - Wednesday, December 17, 2014
Here are some happy snaps from fibreHR’s Christmas party. It was a great night had by all involving lots of laughs and amazing food, Thanking you all for an amazing year and Merry Christmas. 


Fair Work New Professional Development Courses

Lisa Spiden - Monday, December 15, 2014

Fair Work have just released a Online Learning Center to provide professional development; offering a variety of courses including,

  • Difficult conversations in the workplace - employee course
  • Starting a new job
  • Difficult conversations in the workplace - manager course
  • Hiring Employees
  • Managing Performance
To improve your skills and knowledge be sure to Click Here 


Public Holidays

Lisa Spiden - Wednesday, December 10, 2014
Check out 5 Things your business should know about Public Holidays, so you are saying YAY and your business is not in dismay! Click Here 


Christmas Shutdown Periods

Lisa Spiden - Wednesday, December 10, 2014
Christmas and New Year shutdown periods, what your business needs to know to stay off the naughty list, Click Here