TIMBER TRADE INDUSTRIAL ASSOCIATION
TTIA GENERAL CIRCULAR
NO. 4/2013
To:
All Members
From:
Brian Beecroft,
Chief Executive Officer
Date:
22 July 2013
MEMBERS ARE REMINDED THAT IF YOU PAY YOUR
SUBSCRIPTION INVOICE BEFORE 31 JULY 2013 A 5%
DISCOUNT WILL APPLY-THANK YOU FOR CONTUNING TO
SUPPORT YOUR INDUSTRY ASSOCIATION
CONTENTS:
1. CHANGES TO FAIR WORK ACT - COMMENCEMENT DATES
2. MODERN AWARDS TRANSITIONAL PROVISIONS - CHANGES
FROM 1 JULY
3. SUPERANNUATION CHANGES – REMINDER
4. PAYROLL MATTERS: REDUNDANCY PAYMENTS AND
TERMINATION PAYMENTS
5. MANAGING THE WORK ENVIRONMENT AND FACILITIES
6. FEDERAL GOVERNMENT RED TAPE - FBT ON CARS
7. ORGAN DONATION LEAVE
The information presented in this circular was developed from sources believed to be reliable. In the
context of the absolute responsibilities owed by employers to ensure a safe place of work, it should
not be assumed that all reliable measures to eliminate or mitigate risk have been canvassed in this
presentation. Prevailing applicable legislation, Australian Standards, Codes of Practice, manufacturers’
requirements etc should all be taken into account in the OHS risk management decision-making
process. TTIA, its employees and agents shall not be liable for any loss or damage incurred as a
result of any reliance on the information presented.
PO Box 236, Darlinghurst, NSW 1300
4/160 Goulburn St., Surry Hills, NSW 2010
Ph: (02) 9264 0011 Fax: (02) 9264 1924
1. CHANGES TO FAIR WORK ACT – COMMENCEMENT DATES
In the last round of seemingly regular employment changes before the
upcoming Federal election, the Federal Government has made
Amendments to the Fair Work legislation through the Fair Work Act
Amendment Act 2013. This amendment came into effect either on 1 July
2013 or will come into effect from 1 January 2014.
The Fair Work Ombudsman has published a summary of these changes.
CHANGES COMMENCING 1 JULY 2013
The changes noted here commenced on 1 July 2013 and relate to familyfriendly amendments.
“Family-friendly” changes
The changes mean that:
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pregnant women can transfer to a safe job even if they haven’t
worked for their employer for 12 months
employees can take special maternity leave without it reducing the
amount of unpaid parental leave they can take
employee couples can take up to eight weeks unpaid parental leave
at the same time (increasing from three weeks) and can take it in
separate periods (e.g. two periods of two weeks off)
more groups of employees now have the right to request flexible
working arrangements, including:
- employees with caring responsibilities
- parents or guardians of children that are school age or
younger
- employees with disability
- employees who are 55 years or older
- employees who are experiencing family violence or who are
caring or supporting a family or household member who is
experiencing family violence.
there is a non-exhaustive list of reasonable business grounds
to refuse a request for flexible working arrangements.
OTHER CHANGES FROM 1 JANUARY 2014
The changes noted below will apply from 1 January 2014.
New anti-bullying measures
Employees who are being bullied at work will be able to apply to the Fair
Work Commission for an order to stop the bullying. The Fair Work
Commission will have to start dealing with the matter within 14 days.
Changes to right-of-entry rules
These changes affect the rights and powers of officials of organisations
who have entry permits to enter businesses. The changes will mean that:

interviews and discussions with employees must be held in an area
that the business and permit holder agree to (lunch rooms can be
used if no agreement can be reached)
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the Fair Work Commission will be able to deal with disputes about
the frequency of visits
the Fair Work Commission will be able to:
deal with disputes about accommodation and transport
arrangements
ensure appropriate conduct by permit holders while they
are receiving accommodation or being transported under
the arrangements.
Genuine consultation on changes to rosters and hours of work
All awards and agreements will have to include a term that requires
employers to genuinely consult with their employees about changes to
their regular roster and ordinary working hours. When employers want to
change an employees regular roster or ordinary hours of work they will
have to:
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give information to employees about the changes
invite employees to air their views about how the changes will
affect them
consider the employees views.
Agreements will also require employers to consult about any major
change to a workplace that is likely to have a significant effect on the
employees.
Protection of penalty rates
The modern award objective in the Fair Work Act 2009 will be amended to
protect penalty rates. This will mean that the Fair Work Commission,
when making or changing a modern award, will have to take into account
the need to provide additional pay for employees working:
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overtime
unsocial, irregular or unpredictable hours
on weekends or public holidays
shifts.
2. MODERN AWARDS TRANSITIONAL PROVISIONS CHANGES FROM 1 JULY
The transitional percentage relating to the phasing in of modern awards
changed on 1 July 2013. This article details the fourth and final
adjustment of the phasing process.
From the first pay period that commenced on or after 1 July 2010, various
monetary entitlements under modern awards were adjusted (up or down)
by a percentage if there was a difference in the (then) minimum rate (i.e.
under the pre-modern award instrument) and the rate prescribed by the
modern award. The transitional amount or the transitional percentage is
adjusted on the first pay period to commence on or after 1 July each year
during the phasing process. The phasing process occurs over a four-year
period, which will cease on 1 July 2014.
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This means the fourth adjustment in the phasing process occurs from the
first pay period commencing on or after 1 July 2013.
Modern awards contain transitional arrangements that specify when
particular parts of the modern award come into effect. Transitional
provisions generally appear as a schedule to the modern award.
Note: some modern awards may provide different transitional provisions
to the ‘standard’ phasing process; therefore, reference should be made to
the transitional provisions of the applicable modern award to determine
the appropriate phasing process.
The phasing percentage has changed to 20 per cent (from 40 per cent)
from the first pay period commencing on or after 1 July 2013.
This article explains the method by which the relevant minimum award
wage, casual loading and penalties are calculated consequent to the
change in the phasing percentage under the transitional provisions of
modern awards, and the decision by Fair Work Australia (FWA) in the
Annual Wage Review 2013.
The phasing process
The following phasing-in percentages are applicable from the first pay
period to commence on or after the relevant date:
Date
1
1
1
1
1
July
July
July
July
July
Phasing-in percentage
2010
2011
2012
2013
2014
80%
60%
40%
20%
nil
On the first pay period commencing on or after 1 July 2013, the
percentage of the transitional amount or transitional percentage to be
deducted, or added, as the case may be, from the minimum wage rate,
casual or part-time loading, or relevant penalty rate, is 20 per cent.
What entitlements are included?
The transitional provisions of a modern award cover the following
employee entitlements:
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minimum wage rates (including piecework rates and
industry allowance)
casual and part-time loadings
Saturday, Sunday, public holiday, evening or other penalty
rates
shift allowance/penalties.
Overtime penalty rates are not considered to be included under the term
‘or other penalty rates’ because the (then) Australian Industrial Relations
Commission excluded certain matters dealing with spread of ordinary
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hours, starting and finishing times, and the number of hours of overtime
required to be worked at certain rates, from the transitional provisions of
modern awards in its decision on Award Modernisation in December 2008.
3. SUPERANNUATION CHANGES – REMINDER
TTIA Members are reminded that changes to superannuation commence
as of 1 July 2013. These changes include:
 an increase of the compulsory superannuation guarantee amount
from 9% up to 9.25%
 employers to make superannuation guarantee payments for eligible
employees who are 70 years of age or over
 comply with the data and e-commerce standards when making
superannuation contributions on behalf of employees
 ensure that you are using a default fund that offers a MySuper
product.
4. PAYROLL UPDATE: REDUNDANCY AND EMPLOYMENT
TERMINATION PAYMENTS
The following changes to payment amounts will come into effect from 1
July 2013:
Tax-free threshold for redundancy payments
The tax free threshold will be $9,246 plus $4,624 for each completed year
of service.
Employment termination payment (ETP) cap
The cap for 2013/14 is $180,000.
Whole-of-income cap for non-excluded ETPs
This will remain at $180,000 for 2013/14. There has been no increase.
Taxing ETPs for redundancy – 2013/14:
Component
Annual leave loading
Long service leave pre 16
August 1978
Long service leave post 16
August 1978
Tax free amount of the first
$9,246 plus $4,624 for each
year of completed service
Excluded ETC - taxable ETP
component
Tax withheld
31.5%
Average marginal rate on 5% of
amount
31.50%
Paperwork
Label A
Label B
Nil
Label D
ETP Cap Under preservation age (55)
at income year end:
 31.5% on first $180,000 then
46.5% on excess
Reached preservation age (55+) at
income year end:
 16.5% on first $180,000 then
46.5% on excess
ETP payment
summary
Label A
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Non-excluded ETP - taxable
ETP component
Whole of income cap* Under
preservation age (55) at income year
end:
 31.5% on first $180,000 then
46.5% on excess
Reached preservation age (55+) at
income year end:
 16.5% on first $180,000 then
46.5% on excess
ETP payment
summary
Taxing ETPs for resignation, retirement or dismissal:
Component
Annual leave loading
Tax withheld
Average marginal rate
Paperwork
Payment
summary - wages
Long service leave loading
pre 16 August 1978
Long service leave between
16 August 1978 and 17
August 1993
Long service leave post 17
August 1993
Excluded ETP - taxable ETP
component
Average marginal rate on 5% of
amount
31.5%
Label B
Average marginal rate
Payment
summary - wages
ETP payment
summary
Non-excluded ETP - taxable
EP component
ETP Cap Under preservation age (55)
at income year end:
 31.5% on first $180,000 then
46.5% on excess
Reached preservation age (55+) at
income year end:

16.5% on first $180,000 then
46.5% on excess
Whole of income cap* Under
preservation age (55) at income year
end:
 31.5% on first $180,000 then
46.5% on excess
Reached preservation age (55+) at
income year end:

16.5% on first $180,000 then
46.5% on excess
Label A
ETP payment
summary
*The whole of income cap is reduced by all other taxable payments. This includes wages,
lump sum leave and excluded ETPs where applicable.
The above information is provided by TTIA to give an overview of the taxation
arrangements regarding these payments. In relation to taxation matters, you are
advised always to contact your accountant/financial adviser.
5. MANAGING THE WORK ENVIRONMENT AND FACILITIES
Following a recent question on the TTIA enquiry line, TTIA Members are
reminded of the Code of Practice on managing the work environment and
facilities which is an approved code of practice under section 274 of the
Work Health and Safety Act (the WHS Act).
The specific enquiry from the TTIA Member was “if we take on a female
employee in a predominantly male work area, do we need to provide
separate toilet facilities for her?” The answer from the above Code of
Practice is:
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“For workplaces within buildings, the National Construction Code of
Australia sets out the ratio of toilets to the number of workers, and the
specifications for toilets. Generally, separate toilets should be provided in
workplaces where there are both male and female workers. However, one
unisex toilet may be provided in workplaces with both male and female
workers where:
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the total number of people who normally work at the workplace is
10 or less
there are two or less workers of one gender.”
The WHS Regulations place specific obligations on a person conducting a
business or undertaking in relation to the work environment and facilities
for workers, including requirements to:
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ensure, so far as is reasonably practicable, that the layout of the
workplace, lighting and ventilation enables workers to carry out
work without risks to health and safety
ensure, so far as is reasonably practicable, the provision of
adequate facilities for workers, including toilets, drinking water,
washing and eating facilities
manage risks associated with remote and isolated work „prepare
emergency plans.
Persons conducting a business or undertaking who have management or
control of a workplace must ensure, so far as is reasonably practicable,
that the workplace, the means of entering and exiting the workplace and
anything arising from the workplace is without health and safety risks to
any person.
This means that the duty to provide and maintain a safe work
environment and adequate facilities may be shared between duty holders,
for example a business leasing premises will share the duty with the
landlord or property manager of the premises. In these situations the duty
holders must, so far as is reasonably practicable, consult, co-operate and
co-ordinate activities with each other.
A person conducting a business or undertaking must ensure, so far as is
reasonably practicable, that:

the layout of the workplace allows, and is maintained to allow,
persons to enter and exit the workplace and move within it safely,
both under normal working conditions and in an emergency

work areas have space for work to be carried out safely

floors and other surfaces are designed, installed and maintained to
allow work to be carried out safely

lighting enables each worker to carry out work safely, persons to
move around safely and safe evacuation in an emergency
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
ventilation enables workers to carry out their work without risk to
their health and safety

workers exposed to extremes of heat or cold are able to carry out
work without risk to their health and safety

work in relation to or near essential services (such as gas,
electricity, water, sewerage and telecommunications) do not affect
the health and safety of persons at the workplace.
If a Member has further queries with regard to this Code of Practice,
please contact the TTIA Office on (02) 9264 0011.
6. FEDERAL GOVERNMENT RED TAPE - FBT ON CARS
In a move that has been universally condemned by most business groups
for its lack of consultation as well as a costly administrative impost on
business and its staff, the Federal Government last week announced
changes to FBT would apply to both salary-sacrificed (i.e. privately
owned) cars and to employer-provided cars that are used for work and
personal use.
The statutory formula method of calculating FBT is the cost of car
multiplied by 20 per cent, regardless of actual personal use of car. The tax
advantage to an individual taxpayer is that the statutory formula
automatically assumes that a significant amount of the car’s use is for
business purposes.
Vehicle contracts entered into, or materially altered, after 16 July 2013
will be affected.
The proposed Government changes are a “political fix” and have come
about in an attempt to plug a significant financial shortfall as a result of
changes to its carbon tax policy prior to the upcoming Federal election.
The changes will remove the statutory formula method for both salarysacrificed and employer-provided cars.
Employees who use their vehicle for work-related travel will still be able to
use a log book to ensure their car fringe benefit excludes any business
use.
The current system
Under the current car fringe benefits rules, a fringe benefit will arise
where an employee is provided with a car for private use. A ‘car fringe
benefit’ is valued using either the operating cost (‘log book’) method or
the statutory formula method.

Under the operating cost method, the car fringe benefit is the cost
of running the car multiplied by the proportion of personal use of
the car worked out by a log book.
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
Under the statutory formula method, a person’s car fringe benefit is
the cost of the car multiplied by 20 per cent, regardless of actual
personal use of the car.
The Government maintains that the statutory formula method provides a
significant tax concession for taxpayers using their car fringe benefit
mainly for private travel, because it assumes a significant proportion of
the use will be for business purposes.
It should be noted that the 20 percent statutory rate was recommended
by the Henry tax review and implemented in 2011.
Changes to the tax system
This proposed change will remove the statutory formula method for both
salary-sacrificed and employer-provided car fringe benefits for new
contracts entered into after announcement, with effect from 1 April 2014.
Existing contracts materially varied after 16 July 2013 will also fall under
the new arrangements. Existing contracts that are not varied will continue
to have access to the existing statutory rate throughout the contract.
All car fringe benefits for new leases will be calculated using the operating
cost method from 1 April 2014.
The operating cost method is based on the actual business use of the car.
Tax is only payable on the portion of operating costs attributable to
private use.
Where there is significant private use, the operating cost method ensures
an amount of tax is paid on the private benefit.
The Government maintains that a tax concession for the private use of a
car is no longer justified or appropriate.
EFFECT OF THE POLICY
This reform will affect more than 320,000 workers including employees,
the self-employed and sole traders — claiming deductions for work-related
travel expenses when they use their own car for work reasons.
Despite some comments to the contrary, the changes will have a
significant impact with many recipients under the current scheme earning
less than $100,000 per year.
The changes do not affect the existing exempt car benefit concessions
that apply to certain uses of taxis, panel vans, utes and other non-car
road vehicles.
Employers who provide a work car to employees for occasional private use
(for example, weekend travel) will continue to be able to use the
operating cost method.
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7. ORGAN DONATION LEAVE
A two year trial will commence on 1 July 2013 where people donating an
organ, such as a kidney or partial liver donors, will be able to take leave,
paid by the Federal government. This leave has been introduced by the
government on a trial basis as donors usually are required to take annual
leave, personal leave or unpaid leave where all other leave options have
been exhausted. An eligible donor will be paid at the national minimum
wage for a period of up to six weeks.
Who is eligible?
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The donor must be employed. The definition of an employed person
for this purpose is someone who has been continuously employed
with the same employer for the previous 28 days.
The employer must have an ABN.
Part time and casual employees are eligible if they meet the above
criteria. They will be paid based on the average number of hours
worked.
Self employed persons are also eligible if they have been self
employed for 28 days prior to the leave commencing and have an
ABN.
A donor must be an Australian citizen or permanent resident with a
Medicare number.
Only donors undergoing operations from 1 July 2013 will be eligible
to make a claim.
The payments are provided to the employer who will pass on the payment
to the employee.
This program has not been legislated and as such employers are not
required to participate. However for an employee to be able to claim this
leave an employer must be willing to engage in the program. There will be
a review at the end of the two year trial period to determine the future of
the program.
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