“Maximising Organisational Performance” Why Do An HR Audit? May 2012 Why Conduct An HR Audit? Penalties totalling almost $1.5 million! Since July 2010, 125 penalty matters finalised. • There has been a 20% rise in the level of fines issued by the Fair Work Ombudsman (FWO) for breaches of the Fair Work Act over the past 18 months. • The FWO now regularly imposes penalties in the high $100,000 and mid‐ $200,000 range. A fine for a single breach of the Act is currently $3,000. • Court penalties are intended to serve as a warning to others to ensure they understand and comply with national workplace relations laws. • It is essential that companies ensure they are not in breach of the Award. The highest‐ever was $288,000 against a small Adelaide cleaning company ‐ underpaid two vulnerable workers less than $4,000!! May 2012 © Ask HR Pty Ltd 2012 2 Example Fines Recently Imposed Month Company Fine Grenpro Pty Ltd and sole director and part‐ 07/10 owner Aaron Michael Grennan 07/10 07/10 08/10 08/10 8/10 10/10 11/10 May 2012 $11,550 for failing to provide employment records for an employee who claimed he had been underpaid Shrek Pty Ltd and sole owner‐director Peter $184,250 for underpaying 18 Court employees No. 1 Riverside Quay Pty Ltd $25,000 for failing to follow correct procedures when it lodged Australian Workplace Agreements Compumark Pty Ltd, owner‐operator Giuseppe $120,800 for underpaying two employees De Simone and former manager Alan Evers‐ Buckland Stewarts Transport & Logistics Pty Ltd and $60,200 for underpaying one owners Rodney Stewart and Pamela Stewart employee, failing to keep proper records and not issuing payslips D.Z. Import & Export Trading Co. Pty Ltd and $178,200 for underpaying two director Zheng Ming Zhu employees Gisela Bottcher, owner‐operator of GB Studio $18,480 for underpaying 11 employees and dismissing an Enterprises, and Wolfgang Bottcher, owner‐ apprentice who queried his pay operator of Cardock Pty Ltd Contracting Plus Pty Ltd and manager‐sole $214,500 for sham contracting and director Randall David Rowe underpaying 116 employees © Ask HR Pty Ltd 2012 3 What Is An HR Audit? DEFINITION The HR Audit is an objective study and analysis of your organisation’s current HR programs, policies, practices and procedures, aimed at ensuring compliance with the Fair Work Act, as well as benchmarking existing HR practices with acceptable HR ‘best practice’. It takes approximately 1 – 1½ days to complete, depending on the size and complexity of the organisation, with a follow up report delivered within 5 days after the audit. WHEN IS AN HR AUDIT NEEDED? 9 If you are concerned about compliance issues with regards to existing legislative requirements. 9 If you have never conducted one before, in order to gain a clear perspective of the HR aspects of your business. 9 Prior to doing any planning and budgeting. 9 If you are considering making changes or revisions to your HR programs and practices. 9 If there is an indication of internal HR or organisational problems. 9 If you are considering selling your business, or prior to buying a business. May 2012 © Ask HR Pty Ltd 2012 4 How Will The Audit Be Conducted? WC will require access to a Conference or Meeting Room and a designated part-time Project Coordinator for the duration of the Audit. WC will also require access to all relevant documentation pertaining to the company structure and HR systems including but not necessarily limited to the following: Business plan Company vision, mission and values Organisational charts Job structures and job descriptions Employee records/files relating to letters of offer, terminations and administrative warnings Recruitment and induction procedures Employee Handbook, Policies and Procedures Manual or copies of individual policies if no manuals exist HR Management systems such as Performance Management documentation, career development and management development HR IT systems, including a brief overview of their operation Training and Development records and procedures Internal communications publications Employee Relations documents including relevant awards, agreements and other industrial instruments Pay records and related documentation May 2012 © Ask HR Pty Ltd 2012 5 Benefits Of This Approach The benefits of undertaking such an audit are that it is: 9 conducted by an independent external company experienced in HR; 9 summarizes your key programs, policies, practices and procedures; 9 evaluates your practices according to commonly accepted standards, international benchmarks and key national requirements; 9 identifies problems and inefficiencies; 9 summarises the major HR strengths and weaknesses of your business; 9 recommends areas for improvement and refinement; 9 outlines actions for modifying programs, policies, practices and procedures; and 9 indicates the priorities and degree of urgency of any new or revised requirements. May 2012 © Ask HR Pty Ltd 2012 6 Contact Details Further information is available from: Wal Beattie Principal Ask HR Pty Ltd ABN: 341 010 842 08 PO Box 6131 Linden Park, SA 5065 AUSTRALIA Phone: 0412 158 893 Email: walbt@iprimus.com.au www.askhr.com.au May 2012 © Ask HR Pty Ltd 2012 7