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New IR legislation to impact HR and payroll systems

  • 28 November, 2005 14:48

<p>BRISBANE, November 28. The Government's proposed Industrial Relations legislation is likely to increase the cost and complexity of administration in industries dependent on award payments, cautions specialist HR software company, Aurion Corporation.</p>
<p>Aurion believes that a percentage of workplaces will find their current computerised payroll systems are unable to handle the demand, while some employers will make promises beyond their ability to deliver.</p>
<p>Smaller employers are most likely to be using systems that will not cope with extra workloads the new laws will create, according to Silvano Basso, Aurion’s Managing Director.</p>
<p>He says: “Many of these systems also have no HR, or limited HR, which is increasingly important for attracting and retaining staff. ASP is an attractive alternative as it delivers the benefits of a modern system without the cost.</p>
<p>“Companies with multiple employee awards can expect twice that number of payroll variations as an outcome of this legislation. They may need to think about upgrading the hardware that supports their current payroll systems.”</p>
<p>Basso cites an HR system for 4,000 employees that comfortably handles eight awards. Under the new rules, there may only be three awards, but individual agreements mean that no two employees need be paid exactly the same. Older and less flexible payroll solutions will struggle to implement the new arrangements.</p>
<p>Every time an employee negotiates a different mix of entitlements and benefits, it will involve a payroll data input to make and record changes to tax, superannuation, net salary and benefits.</p>
<p>Basso says: “The current award structure simplifies administration with common terms of employment such as pay rates and leave entitlements applying to all people doing similar work. But under the new rules, all that simplicity goes out the window and the system, computerised or manual, will need to get it right first time every time.</p>
<p>“In terms of manpower, think of it as a system where two specialist clerks are employed full time to manage a 4,000 person automated payroll. Suddenly, you have twice the number of Moves, Additions and Changes (MACs) every week. The system and the staff have to be able to meet the new demands – there is no half-way point.”</p>
<p>According to Aurion, the new rules also will impact on the Accounts Department and external relationships such as employee car finance, benefits programs and superannuation companies. Under awards, a company might say ‘this group of people has these entitlements’. But that is no longer the case with individual agreements.</p>
<p>Basso says: “Although the proposed IR changes may have few immediate effects on the labour market, the long-term impacts need to be understood and planned for. I believe that marketplace dynamics will encourage some employers to offer potentially more than their systems can handle.</p>
<p>“Moreover, the changes are coming at a time when employers are under pressure to reduce operating costs. Innovative employers will use the new IR framework to promote themselves as employers of choice by offering greater flexibility in employment conditions to support work/life balance considerations. It's a selling point for an employer in a competitive hiring environment.”</p>
<p>According to Basso we are already seeing examples in the workplace. In response to requests from working parents, some employers enable staff to ‘buy’ additional holidays by ‘banking’ some of their weekly pay so the parents can have more time off for school holidays.</p>
<p>But to do this for everyone and on a grander scale, employers will first need to assess carefully their existing HR infrastructure. They will certainly need the flexibility and features of modern enterprise HR solutions, such as 24/7 access via self service.</p>
<p>Basso concludes: “As a developer of payroll software, Aurion gets early warning from customers if they believe proposed legislative changes are going to impact their workload. We operate in a range of industries, so our experience is representative of employers in general.</p>
<p>“So far the Government’s proposed IR legislation has generated little response from the market. The general feeling is to 'wait and see' and the expectation is that change will be gradual given everyone’s investment in existing employment entitlements and conditions. Wait and see will be fine for most, but there is a measure of systems pain ahead for many.”</p>
<p>About Aurion
Aurion Corporation is a leading provider of HRMS solutions in Australia, with a track record of innovation since its beginnings in 1985. It was the first company to deliver a HR Self Service system in Australia and one of the first globally. The company’s performance measure is that all Aurion implementations are successful.
Aurion is wholly Australian owned. Queensland Government is the majority shareholder, with Business Management Limited (BML) and the Aurion founders (the original development team remain as shareholders) holding the remaining equity. Hundreds of Australian clients include News Ltd., Boeing, John Fairfax, TabCorp, Thiess and many state, local and federal government agencies.</p>
<p>For more information</p>
<p>Paul MacRae, Aurion - 07 3368 9630 or +61 400 826080</p>

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