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Growing your business – recruiting in the building and construction industry

Growing your business – recruiting in the building and construction industry

As your building practice grows, you may need to recruit staff to take on extra work asyou continue to develop the business.

Hiring competent and reliable staff can contribute towards the success of any business. Understanding your obligations as an employer, and properly evaluating the role to be filled before you start the recruitment process, can help you find the right fit for your workplace and ensure the employment relationship is mutually rewarding.

Following are some basic tips to assist those considering recruiting. Business owners may also benefit from obtaining professional advice tailored specifically to their building practice before taking this important step.

Evaluate the role to be filled

Before advertising a vacancy or approaching an employment agency or training provider, builders should think about the type of role to be filled and the level of experience required.

An apprenticeship or traineeship is a long-term investment and can add value to your business enabling you to train, develop and integrate staff across the unique needs of your workplace. Builders offering apprenticeships assist in addressing skill shortages in the construction industry and may be eligible to access Government incentives such as funding and rebates. Apprentices however need good guidance and supervision to ensure they are appropriately mentored to reach optimum performance.

An experienced tradesperson on the other hand, should be ready to carry out construction work almost instantly and with minimal supervision, contributing immediately to the business income. Employers however will need to pay more to attract experienced building professionals and may struggle to find suitably qualified employees in an industry that is often impacted by skill shortages.

Determining the role to be filled requires an assessment of the:

  • type of employee required, his or her personality and the workplace dynamics;
  • specific trade or work to be carried out;
  • skills, qualifications and requirements for additional training;
  • level of experience and need for supervision;
  • responsibilities and systems to assess and monitor performance;
  • work arrangements – full-time, part-time, casual, overtime; and
  • long-term objectives of the business.

Understand your employment obligations

The Fair Work Act 2009 (Cth) governs the Australian industrial relations system and sets out minimum standards applicable to all national system employees, known as the National Employment Standards. These standards apply irrespective of industry, occupation or income and must be incorporated into every employment agreement.

Once the position to be filled is determined, the appropriate industrial award covering the industry and occupation should be identified. If there is no award covering the role (usually managerial positions) the conditions will be set out under the contract of employment and National Employment Standards.

The Fair Work Commission website has a range of resources available about industryspecific awards and agreements, minimum wages and conditions, as well as potential workplace issues such as unfair dismissal, discrimination, harassment and unlawful termination. Taking proactive steps by implementing policies and systems to prevent or manage workplace issues is important to reduce the risk of disputes and potential legal proceedings and to help everybody understand their workplace rights and obligations.

Offers of employment and induction

Once a suitable candidate is identified, a written offer should be made setting out the proposed conditions of employment and any applicable award. Employees should be given a Fair Work Information Statement which provides general information on the National Employment Standards and employees’ workplace rights. This is also an opportune time to discuss and provide copies of any workplace policies, procedures or rules.

A standard choice superannuation form advises new employees of the employer’s nominated superannuation fund or lets the employee nominate their own fund for superannuation contributions. Employees will also need to complete a Tax File Number Declaration.

Before the employee commences work, employers should obtain:

  • full contact details including address, phone numbers, email address and an
    emergency contact;
  • personal details regarding specific medical conditions or allergies that may impact
    upon the employee’s capacity to perform his or her duties;
  • completed Tax File Number declaration and superannuation details;
  • bank details for payment of wages;
  • copies of relevant qualifications, licences, WHS induction (White Card);
  • evidence of citizenship / right to work in Australia.

Wages, superannuation and insurance

Employers who have not already done so, must register with the Australian Taxation Office (ATO) for Pay As You Go tax (PAYG), maintain records for PAYG withholding tax and submit the required amount to the ATO when due. Builders who are unfamiliar with ATO reporting and PAYG requirement should seek assistance from their tax advisor.

From the commencement of employment, employees, whether part-time, full-time or casual, are entitled to be paid superannuation contributions into their nominated fund or the employer’s complying superannuation fund.

Employers should also register with the relevant state WorkCover authority and obtain workers compensation insurance and submit records for the new employee to the relevant building and construction industry Long Service Scheme.

Employee or contractor?

Understanding the difference between an independent contractor and an employee is an important consideration for all builders, who often engage workers to carry out specific trades such as concreting or plastering on a contract basis. If the independent contractor is genuinely running a business as a profit-making enterprise this is not problematic.

The Fair Work Act 2009 (Cth) however, prohibits a person from misrepresenting ‘employment’ as ‘independent contracting’. These arrangements essentially involve the employer requiring that the worker obtain an Australian Business Number (ABN) and create a ‘business’ before being offered any work. The worker is generally responsible for paying his or her own taxes and insurances, may be paid a slightly higher rate than an employee, but is denied minimum entitlements such as annual and sick leave, contributions to superannuation and protection from unfair dismissal or termination.

These arrangements are common in the construction industry and are illegal. Builders with similar arrangements in place should consider whether their ‘contractors’ are really ‘employees’. Essentially, an employee performs work under the direction and control of the employer, on specific days and between specified hours, often with an ongoing expectation of work, with tools and equipment provided by the employer, or a tool allowance provided. An employee works in and is part of the business while a contractor operates his or her own business by providing services to the builder.

It is sometimes difficult to discern between an employee and contractor. Builders unsure of their situation should obtain legal advice.

Conclusion

The information contained in this article is only an overview of the many issues involved with employing staff.

It is no longer sufficient (and probably never was) to hire an employee on a ‘handshake’ alone. Prudent building practitioners will familiarise themselves with relevant workplace and occupational health and safety laws, taxation and reporting requirements, and implement strategies to ensure efficiency and increased retention rates and minimise legal issues and disputes.

If you or someone you know wants more information or needs help or advice, please
contact us on 03 8787 8900 or email law@davidnaidoo.com.au.