Maintaining HR compliance in the aesthetic medical field

In this article, the second of a three-part series, Lizzy Boots outlines key elements to implement to safeguard your business and stay up to date with workplace reform.

The initial post gave tips on navigating the recruitment maze.

Australian workers’ rights have changed significantly over the past 18 months. The Fair Work Legislation Amendment Act (2022) and Closing Loopholes Acts (2023 and 2024) have delivered the most significant industrial relations (IR) reforms we have experienced since the Fair Work Act was introduced in 2009. These new laws have created a shake-up for Australian workers’ rights and resulted in a wake-up call for employers, presenting business owners with new and unique workplace challenges – and placing them on notice that HR compliance cannot be ignored.

The challenge for employers: understanding and embracing IR changes

Maintaining HR compliance – and staying on the right side of employment law – starts with understanding and staying up to date with changes in workplace legislation. Designed to be rolled out in tranches, the Workplace Amendment Act (2022) and Closing Loopholes Acts 1 (2023) and 2 (2024) are clearly aimed at creating greater legal protection for employees, while the unprecedented media coverage surrounding these new laws has resulted in a generation of workers that has never been more educated in relation to their individual rights and workplace entitlements.

Adapting to the new IR legislation, maintaining robust HR compliance is not just a legal obligation but a critical component for business success. Non- compliance can lead to costly litigation, reputational damage and a disruptive workplace environment.

While there is a myriad of factors required to ensure an HR- compliant workplace, in this issue we will focus on five key elements that are considered essential for implementing and maintaining HR compliance. Incorporating these actionable tips into your business can go a long way to ensuring compliance across the employee lifecycle, from initial interview through to ending employment.

1 – Recruitment and onboarding

The recruitment and onboarding process is the first opportunity to establish a compliant workplace. It’s crucial to understand that legal obligations extend far beyond simply filling vacancies. Missteps in this area can lead to severe consequences, including discrimination claims and breaches of employment law.

Best practice should be implemented for each stage of the hiring process, including advertising and hiring, interviews and reference checks, and onboarding.

Advertising roles with accurate and non-discriminatory language is fundamental to HR compliance.

The Australian Human Rights Commission (AHRC) has reported that recruitment-related discrimination remains a significant issue for complaints, particularly concerning criminal records. Employers must ensure that job advertisements are clear, inclusive and free from biases that could exclude qualified candidates unjustly.

Addressing any potential bias to discrimination and inclusivity is important in both job ads and interviews. According to a recent survey by Seek, discrimination remains a major concern in the Australian job market, with 41% of job seekers stating they have faced age discrimination, and significant percentages experiencing gender- and ethnicity-based biases.

Conducting thorough interviews and reference checks is vital to mitigate risks. A well-documented interview process not only helps in selecting the right candidate but also serves as evidence of fair hiring practices if disputes arise.

Reference checks should always be conducted. Inadequate reference checks have led to cases of negligent hiring, where employers have been held liable for the
actions of employees who were not properly vetted.

HR action

Create and use an application form that captures the same information for all candidates.

When conducting interviews, refer to a list of carefully prepared interview questions that will serve as a checklist for the skills, knowledge and experience required for the role and ensure your interview process is not only fair but avoids prohibited questions, including those related to ethnicity, marital status, age, gender or religion. Outsource reference checks wherever possible.

A structured onboarding process sets the tone for the employment relationship. It is essential to provide new hires with all necessary compliance information, including workplace policies and codes of conduct. Proper onboarding reduces the risk of early turnover. A recent survey by the Society for Human Resource Management (SHRM) identified employee churn costs employers an average of 6 to 9 months of an employee’s salary.

HR action

Write and implement a 30-60-90 day On-boarding Plan to both guide and monitor the employee through the first three months of employment. Education and clear communication will ensure your business meets legal employee engagement requirements and also dramatically increase retention.

2 – Updating employee contracts

Well-drafted employment contracts are the cornerstone of HR compliance. Contracts must be clear, comprehensive and regularly updated to reflect changes in employment law and workplace conditions.

Contracts should outline the terms of employment, including start date, the Award and classification under which the employee is engaged, title and job duties, remuneration, hours, and conditions of work. The full name of the employment entity and ABN is also legally required and often omitted.

Failure to include legally binding terms can lead to disputes over entitlements and obligations, often resulting in costly legal battles during or post engagement.

Including prohibited clauses exposes a business to costly penalties. For example, from 7 June 2023 pay secrecy clauses are prohibited from inclusion in employment contracts. Employers who enter into employment contracts with pay secrecy terms after this date are exposing themselves to costly penalties, highlighting the need for constant vigilance in reviewing and updating contracts.

Contracts should also clearly identify the employment type under which the person is engaged – full-time, part-time, casual, fixed- term or contractors. Misclassification of employees, particularly casuals or independent contractors, can lead to significant penalties, as seen in recent high-profile cases where businesses have been found guilty of sham contracting.

HR action

Review and revise contracts on a regular basis. Seek advice from HR professionals to ensure your contracts meet the current IR guidelines, include the required information and do not include prohibited clauses. Legally binding contracts are the backbone of compliance and should provide employees with information about their entitlements and responsibilities.

3 – Providing a safe workplace

Under the Work Health and Safety Act 2011, employers are obligated to create and maintain a safe and healthy work environment. This extends beyond physical safety to include managing workplace risks and fostering a positive mental health culture.

Safe Work Australia provides advice to employers: ‘Under the model WHS laws, a person conducting a business or undertaking must manage psychosocial risks – including risks to mental health at work.’

Under new legislation, implementing a robust mental health policy is no longer optional; it’s a critical component of overall workplace safety. Employers must proactively identify potential hazards, conduct regular risk assessments and provide appropriate training to all staff. This comprehensive approach to safety not only protects employees but also minimises the risk of legal issues arising from workplace incidents.

According to Beyond Blue, businesses that prioritise mental health see a 2.3-fold return on investment, highlighting the tangible benefits of fostering a supportive work environment.

HR action

Invest in HR advice or simply download and implement a Mental Health Policy. Plan and conduct a team training session to ensure the policy is not just created and then filed away to tick the box. This important policy should be acknowledged and embraced by everyone in the business.

4 – Managing performance issues

Effective performance management is crucial for maintaining HR compliance and ensuring the smooth operation of any business. Setting clear performance expectations from the outset is key, as is conducting regular performance reviews and providing ongoing feedback.

When addressing under- performance or disciplinary issues, it is essential to handle these situations with care and professionalism. Performance meetings should be conducted at the right time and in a suitable environment, beginning with positive feedback to set a constructive tone. When meeting, be specific and objective, focus on behaviours rather than personality traits and provide actual examples to support concerns being raised.

Difficult conversations, while challenging, present opportunities for growth and improvement. Always offer support, whether through additional training or resources, and ensure that any agreements or actions to be taken are documented. Remember, if it’s not in writing, it didn’t happen. Follow-up after performance meetings is vital to track progress and demonstrate your commitment to your employee’s development.

HR action

Develop a clear Performance Management Policy and follow best practice guidelines every time you meet with an employee to discuss performance issues. Always document the conversation, agree on a timeline for improvement or change and set a calendar reminder for a follow-up meeting. Place a copy of the notes on the employee’s HR file and provide them with a copy. Diligent documentation is the foundation of HR compliance.

5 – Ending employment and off-boarding

Terminating an employment relationship is a delicate process that requires careful handling
to ensure compliance with Fair Work guidelines. Whether due to performance issues, redundancy or other reasons, following best practice guidelines is crucial to avoid legal repercussions.

Before proceeding with a termination, seek external advice to ensure all legal obligations are met. This includes providing the appropriate notice period, offering support during the transition and conducting an exit interview. A well-managed off-boarding process not only mitigates risk but also leaves the door open for a positive future relationship, whether through rehiring or professional networking.

HR action

Develop a Policy for Ending Employment and refer to it every time an employee leaves the business. Whether by resignation or termination, the off-boarding process should be formalised and standardised. Conduct an Exit Interview to gather valuable information about the workplace and employee experience. Consistency in the off-boarding process is a crucial step in managing compliance.

Conclusion

HR compliance is not just about avoiding penalties. When embraced and carefully implemented, compliance is fundamental in creating a workplace where employees feel valued, safe and motivated.

Failure to stay up to date and comply with HR regulations can result in significant financial losses, damage to your brand and a demoralised workforce. In the aesthetic medical field, where patient care and satisfaction along with optimal treatment outcomes are paramount, a strong HR foundation and robust workplace compliance is essential to achieving excellence.

In the next instalment, we take a deep dive into the ‘Closing Loopholes’ legislation, which includes the right to disconnect, as well as changes to casual employment laws. Until then, stay compliant! AMP

For more insights and professional recruitment support, contact Lizzy Boots at +61 414 644 463 or www.bootsandall.com.au.