The employee was the Chief Executive Officer of a not-for-profit organisation. Following the termination of employment, the CEO lodged an unfair dismissal application. The organisation argued that because the CEO earned well above the High Income Threshold, the employee was not protected from unfair dismissal.

The Fair Work Commission approached the matter differently.

Rather than focusing on the employee’s earnings, it considered whether the CEO’s role was covered by the SCHADS Award. The Commission found that the role fell within the Award’s classification structure and that award coverage remained relevant despite the CEO earning above the High Income Threshold. [fwc.gov.au]

For many employers, that finding may come as a surprise.

The High Income Threshold (currently $190,100) does not automatically remove award coverage. An employee can earn well above the threshold and still be covered by a modern award.

The Fair Work Act contains specific provisions dealing with a Guarantee of Annual Earnings (GAE). A GAE is designed to remove award coverage for an employee who would otherwise be covered by a modern award. To be effective, it must meet the requirements set out in the legislation, including being in writing, specifying the guaranteed earnings, containing a guarantee period and being accepted by the employee.

This is particularly relevant for not-for-profit organisations operating under SCHADS.

Many readers will be familiar with SCHADS Level 8. When you read the classification descriptors, they align closely with the responsibilities often performed by CEOs, Executive Managers and General Managers within community organisations. As a result, it is entirely possible for a senior executive earning above the High Income Threshold to still be covered by the Award if a compliant Guarantee of Annual Earnings is not in place.

A standard offset clause or all-inclusive salary clause is not the same thing as a Guarantee of Annual Earnings. The fact that an employee earns above the threshold does not, by itself, switch off award coverage.

The Bloom HR Takeaway

For not-for-profit organisations, the SCHADS Award reaches further into management and executive roles than many people realise.

If you have CEOs, Executive Managers or other senior employees earning above the High Income Threshold, it may be worth reviewing whether the role is covered by an award and, if so, whether there is a compliant Guarantee of Annual Earnings in place.

This case is a useful reminder that award coverage and earnings are two separate questions. Before making decisions about contracts, performance management, termination of employment or industrial obligations, it is worth confirming exactly where your senior employees sit under the Award and whether the documentation supports the intended arrangement.

Unsure whether your CEO, Executive Manager or senior employee is still covered by an Award? Bloom HR can review your contracts, classifications and remuneration arrangements to ensure they align with your organisation’s obligations.

Supporting those who support the community.

#FairWorkFriday #SCHADS #NotForProfit #CEO #EmploymentLaw #HumanResources #AwardCoverage #WorkplaceRelations #BloomHR

The post Fair Work Friday: Your CEO earns above the High Income Threshold. So why does the SCHADS Award still apply? appeared first on Bloom HR.

A recent Fair Work Commission decision involving GPC Asia Pty Ltd demonstrates what happens when an employer approaches performance management properly and genuinely invests in helping an employee succeed.

The result – The employer successfully defended an unfair dismissal claim, with the Commission describing the performance management process as effectively a textbook example of how it should be done.

The Case

The employee worked as a Supply Chain Planner and was responsible for maintaining and managing key supplier data.

Over time, concerns emerged about the quality and accuracy of his work. The employer identified ongoing performance issues and implemented a structured Performance Improvement Plan.

Like many employees facing performance concerns, the employee argued that the issues weren’t really his fault.

He claimed system problems, operational challenges and broader team backlogs contributed to the shortcomings identified by the employer. The Commission, however, wasn’t persuaded.

What stood out was not simply that performance concerns existed. It was the way the employer responded to them.

Why the Employer Won

The employer didn’t rush to termination. It didn’t ambush the employee. It didn’t create a PIP simply to build a paper trail. Instead, managers spent considerable time clearly identifying the performance gaps, setting expectations, providing support and conducting regular documented reviews.

The evidence showed consistent weekly meetings throughout the process, progress was monitored, feedback was provided and expectations were clearly communicated.

The employee was given genuine opportunities to improve.

Importantly, the Commission found the manager’s objective throughout the process was not to terminate the employee, but to help him succeed. That distinction mattered.

The Deputy President specifically noted that the manager worked hard and consistently throughout the PIP to identify what needed to be done to close the performance gap.

When performance ultimately failed to improve to the required standard, the employer was able to demonstrate that it had acted fairly, reasonably and with genuine intent.

What Employers Should Take Away

The strongest PIPs have several things in common:

• Specific examples of the performance concerns
• Clear and measurable expectations
• Regular review meetings
• Genuine coaching and support
• Accurate documentation
• A realistic opportunity to improve

What they don’t contain is a predetermined outcome. If you’ve already decided the employee is leaving, you’ve missed the point of performance management. The purpose of a PIP should be improvement.

Termination should only be the outcome if improvement does not occur despite reasonable support and opportunity.

The Bloom HR Take

I’ll be honest, some managers avoid performance conversations for years because they’re worried about hurting feelings, others go to the opposite extreme and suddenly produce a PIP once they’ve already decided they’ve had enough.

A PIP is a management tool. The reality is that many employees genuinely don’t know they’re underperforming until somebody sits down and clearly explains the gap between what’s expected and what’s actually being delivered.

I’ve seen employees completely turn their performance around when they’ve been given clear feedback, practical support and realistic expectations. Employees need to be open to the feedback, and that requires trust. Leaders must build trust to be able to constructively give feedback that is received with good intentions.

I’ve also seen organisations drag out PIPs. This is also not fair. Being on a PIP is stressful and time consuming for both the employee and employer.

I’ve also seen employers not address things quickly enough. This is also not fair. The employee doesn’t know where they stand and in the meantime, other employees are picking up the slack.

When performance improvement plans are undertaken with the intention of getting that employee to improve, its an act of genuine leadership, not a a punitive process.

Good leaders don’t avoid difficult conversations. They have them early, clearly and respectfully and sometimes, despite everyone’s best efforts, improvement doesn’t occur.

When that happens, a fair and properly documented process protects both the employee and the employer. That’s exactly what happened here. The employer was able to demonstrate a fair, clear and reasonable process that was well documented and genuinely wanted the employee to success, and that is precisely what the Fair Work Commission expects.

Need assistance with a difficult conversation or tricky performance issues? Bloom’s array of talented consultants are here to help. Set up your free 30 minute consultation here.

#FairWorkFriday #PerformanceManagement #PIP #HumanResources #Leadership #EmploymentLaw #FairWorkCommission #HR #WorkplaceRelations #BloomHR

The post Fair Work Friday: The PIP That Actually Worked appeared first on Bloom HR.

One of the biggest workplace debates of the past few years has been the rise of work from home requests based on caring responsibilities. 

Many employers assume that if an employee has a genuine caring responsibility, then a request to work from home must be approved. 

A recent Fair Work Commission decision involving the Australian Financial Complaints Authority (AFCA) is a timely reminder that this simply isn’t the case. The Commission upheld AFCA’s decision to refuse an employee’s request to work from home full-time, despite the employee having significant caring responsibilities for an immunocompromised spouse and a child experiencing ongoing health issues. 

The Facts

The employee requested to work from home on a permanent full-time basis due to his caring responsibilities. 

Importantly, AFCA had already implemented a hybrid working guideline that allowed employees to work from home for up to three days per week, with attendance in the office required for the remaining two days. 

The employee argued that AFCA had failed to properly consider the impact its refusal would have on him and his family and that the employer did not have reasonable business grounds to reject the request. 

The Fair Work Commission disagreed. 

Deputy President Bell described AFCA’s hybrid working arrangement as “on one view generous” and found there was no “capriciousness or arbitrariness” in the policy. The Commission accepted that the employer had reasonable business grounds to refuse the request for full-time remote work. 

Why Did AFCA Win?

The key point is that AFCA was not refusing flexibility altogether. 

The employee was already permitted to work from home for the majority of the week. The dispute was about whether the employer had to remove all office attendance requirements. 

The Commission accepted that it did not. 

This distinction is important because the Fair Work Act gives eligible employees the right to request flexible working arrangements. It does not give employees an automatic right to their preferred arrangement. Employers can refuse a request if they have reasonable business grounds and comply with the legal process. 

In this case, the Commission accepted that AFCA’s hybrid model was a legitimate workplace policy and that requiring attendance in the office for two days a week was a reasonable position for the employer to maintain. 

Why Do Some Work From Home Cases Succeed?

This decision shouldn’t be interpreted as a green light for employers to reject flexible work requests. 

Recent Fair Work Commission decisions have shown that employers who rely on vague statements about culture, collaboration or management preference can find themselves in trouble if they can’t demonstrate genuine business reasons for refusing a request. 

What we continue to see is that employers are more likely to succeed when they can demonstrate: 

✅ A clear and consistently applied policy 

✅ Genuine operational reasons 

✅ A thorough assessment of the employee’s circumstances 

✅ Evidence that alternative options have been considered 

✅ A well-documented decision-making process 

The cases are highly fact-specific, but one principle remains consistent: employers must do more than simply say “because that’s our policy”. 

The Bloom HR Take

This case got me thinking about a question that many employers quietly ask but rarely say out loud. 

When did “caring responsibilities” become synonymous with “working from home”? 

The Fair Work Act provides eligible employees with the right to request flexible work arrangements because of caring responsibilities. However, flexibility comes in many forms. 

Sometimes flexibility might mean: 

• Adjusted start and finish times

• Reduced hours

• Part-time work

• Job sharing

• Compressed work weeks

• Different rostering arrangements

• Temporary changes during periods of increased caring needs

• Accessing paid personal/carer’s leave when a dependant is unwell

• Occasional or partial work from home arrangements

Work from home is just one option. 

What concerns me is that, in many workplaces, we’ve almost reached the point where caring responsibilities automatically become a work from home discussion. 

I don’t think that is what the legislation intended, and I don’t think it’s always the most appropriate solution. 

Let’s be honest. 

If an employee genuinely needs to provide ongoing care and supervision throughout normal business hours, employers are entitled to ask a practical question: 

How will the employee continue to perform the inherent requirements of a full-time role? 

That isn’t a criticism of carers. 

It’s a legitimate operational question. 

If a spouse, child or family member genuinely requires significant care during the day, there may be other options available. Depending on the circumstances, this could include formal support services, family support arrangements, adjusted work schedules, reduced hours, or utilising available leave entitlements when active care is required. 

I appreciate this is an uncomfortable conversation, but I think it is one employers need to be willing to have. 

A full-time employee should be available to perform their role during work hours. If caring responsibilities are so extensive that somebody cannot attend the workplace at all, employers shouldn’t be afraid to explore whether there are alternative flexible work arrangements that better balance both needs. 

The lesson from this case isn’t that caring responsibilities aren’t real. 

The lesson is that caring responsibilities do not automatically equal work from home. 

Nor do they automatically override an employer’s legitimate operational requirements. 

As HR professionals and business owners, our role isn’t to judge whether an employee’s circumstances are genuine. Our role is to determine whether there is a practical and sustainable arrangement that enables the employee to balance their responsibilities while still performing the role they are employed to do. 

This decision reminds us that flexibility is a broad concept. 

And sometimes the most appropriate solution may not be working from home at all. 

The post Fair Work Friday: Caring Responsibilities Don’t Automatically Mean Working From Home appeared first on Bloom HR.

A funds management firm, Whistle Funds Management Company, engaged a senior professional through his own consultancy company in 2012. By 2021, he had stepped into the role of Managing Director. Over the years, the financial reality of the relationship shifted significantly. He stopped taking outside clients, worked full-time from the company office, and drew a high fixed monthly salary that progressed from $250,000 to $300,000, finally reaching $350,000 by October 2023. This amount was paid regardless of whether he took leave or was absent due to illness, and he no longer had to invoice to be paid.

In March 2025, the company founder sent a series of emails issuing a strict directive: the Managing Director was to keep the founder informed of all conversations with a specific high-profile investor family, and he was explicitly barred from holding any discussions without the founder present under any and all circumstances.

Believing this directive placed him in an impossible position regarding his corporate and legal responsibilities, the Managing Director sent an email raising concerns and referencing legal advice. The founder immediately reacted with anger, and the Managing Director was terminated the following day. The company cited a broken-down working relationship. The Managing Director subsequently lodged a Federal Court claim alleging unlawful adverse action alongside claims for unpaid entitlements.

The Ruling

Justice Yaseen Shariff of the Federal Court ruled heavily in favour of the Managing Director in the case of Vize v Whistle Funds Management Company Pty Ltd [2026] FCA 831. The court first looked past the contractor label, using the dispute as a clean test of the statutory definition of an employee under Section 15AA of the Fair Work Act. Because of his $350,000 fixed salary, full-time integration, and lack of billing requirements, the court determined the arrangement had transitioned into an employment relationship back in July 2017.

On the adverse action claim, the founder admitted under cross-examination that he was “absolutely annoyed” by the email raising legal objections. The judge described parts of the founder’s account as “unimpressive, unsatisfactory, unreliable, combative and inconsistent”, concluding that this personal irritation was a substantial and operative reason for the termination. Sacking an employee because they made an inquiry or complaint in relation to their employment is a direct breach of section 340 of the Fair Work Act.

Because the worker was deemed an employee, the court declared that Whistle Funds breached the law by failing to pay out accrued annual leave on termination and failing to pay superannuation from January 2024. The court also ruled he was entitled to six months’ notice and back-dated long service leave under NSW law stretching back to 2017. While the company’s liability has been firmly established, the court has reserved the final multi-year calculations for damages, compensation, and statutory penalties, listing the matter for a case management hearing on 16 July 2026.

How to do it better

• Review high-level contractor structures regularly: Just because an executive is paid a high fee through an ABN and charges GST does not make them a contractor. If they work exclusively for your business, receive a regular fixed amount, and operate as part of the internal leadership team, the law will view them as an employee.
• Pause before reacting to pushback: When a senior leader objects to a business directive or mentions legal parameters, treating that complaint as insubordination or a culture problem is highly risky. Emotional or reactive terminations following a formal complaint almost always trigger adverse action risks.
• Document objective performance or structural issues early: If a relationship is genuinely breaking down, it must be managed through objective, documented communication over time, rather than a sudden termination immediately following a disagreement.

The Bloom HR Takeaway

This case is a stark reminder that the general protections framework protects everyone, from an entry-level trainee right up to a Managing Director drawing $350,000 a year. While the high-income threshold prevents top earners from filing standard unfair dismissal claims in the Fair Work Commission, there is no income cap on adverse action claims in the Federal Court.

Furthermore, you cannot contract out of Fair Work minimum entitlements, and you cannot rely on past contractor billing history to stop a worker from claiming employee rights later. When an executive is misclassified, the financial exposure for back-dated annual leave, long service leave, notice periods, and superannuation over multiple years can easily climb into the hundreds of thousands of dollars. Leaders must separate personal frustration from objective business decisions, ensuring that tough internal feedback is met with professional dialogue rather than a swift exit.

The post Fair Work Friday: Senior executive wins adverse action claim – contractor v employee test applied! appeared first on Bloom HR.

In June 2025, a manager at Freight Victoria was informed by two directors that a specific project officer role, which previously reported directly to her, was being temporarily reassigned to the commercial ports team for a 12-month period. The directors explained that this adjustment was temporary and based on feedback regarding her leadership approach.

The manager did not see it as a minor operational adjustment. Instead, she interpreted the structural change as a direct demotion and a calculated attempt to push her out of the business. In response, she resigned from her position and subsequently lodged a general protections application with the Fair Work Commission, claiming she had been constructively dismissed.

The Ruling

The Fair Work Commission completely rejected the manager’s claim. Deputy President Ian Masson ruled that she was not constructively dismissed and had ‘simply no basis’ to believe she was being forced out of her role.

The Commission’s investigation revealed that the employer’s decision to shift the reporting line was actually a proactive management step. Rather than trying to eliminate her position, Freight Victoria management was genuinely anxious to retain her. The change was driven by a genuine and balanced concern to protect the psychological safety of an incoming subordinate while simultaneously offering active coaching to help the manager develop into a more effective leader.

This decision was backed by formal staff complaints from project officers in 2022 and 2024 regarding the manager’s style. Subordinates noted she was frequently unavailable for guidance and addressed basic performance issues in a hostile manner. The Commission reaffirmed that constructive dismissal requires an employer to leave a worker with ‘no real choice’ but to resign. Reasonable management actions, such as altering reporting structures or adjusting responsibilities in good faith, do not meet this threshold.

How to do it better

While the employer successfully defended this claim because they acted in good faith and had clear evidence of performance issues, minor missteps in communication can easily lead to costly legal disputes. To handle structural changes and leadership coaching smoothly, organisations should:

1. Document the ‘Why’ early: Maintain clear records of all performance feedback, staff complaints, and leadership coaching sessions. This provides an objective paper trail if a structural change is later challenged.
2. Over-communicate the intent: When temporarily altering reporting lines or duties, explicitly frame the change in writing as a supportive development step rather than a disciplinary measure.
3. Outline clear timelines and support: Set defined boundaries for temporary restructures, detailing exactly what milestones need to be met and what training will be provided to help the manager succeed.

The Bloom HR Take Away

A restructure or a shift in operational responsibilities is not automatically a constructive dismissal, provided it is handled reasonably and for a legitimate business purpose. This ruling is a reassuring reminder for Australian employers that you are fully entitled to manage your teams, protect the psychological safety of your staff, and implement leadership development strategies without fear of forced resignation claims.

The secret to success lies in your intent and your execution. When you approach performance challenges with a genuine desire to coach and retain your people, and support those actions with robust documentation, you protect your organisation while building a healthier workplace culture.

The post Fair Work Friday: When a change in reporting lines isn’t constructive dismissal appeared first on Bloom HR.

The Case: Re Kristan Heidel v University of Notre Dame Australia

A program manager at the University of Notre Dame, responsible for managing a rural health grant, frequently struggled with incomplete tasks, vague accountability, and pushing deliverables onto other team members.

When her acting line manager began directly addressing these performance gaps through professional emails and requests for progress updates, the employee resisted accountability. She routinely pushed back, claiming she didn’t understand deadlines or that the tasks fell outside her responsibility.

The tension peaked when the manager issued a formal invitation to a performance meeting to discuss implementing a Performance Improvement Plan (PIP). That exact evening, the employee lodged a stop-bullying application with the FWC, claiming that the ongoing monitoring and formal meeting request constituted workplace bullying.

The FWC dismissed the employee’s application entirely. Commissioner Stephen Crawford noted that the employee was challenging to manage and actively resisted accountability.

Crucially, the Commission emphasised that employees cannot expect to avoid standard scrutiny of their performance by simply launching a workplace bullying claim.

While the Commission noted a minor administrative oversight by the university (an HR partner had accidentally forwarded a confidential query from the employee back to the manager), this did not alter the core facts. The manager’s communication remained professional, focused entirely on work delivery, and was deemed a classic example of reasonable management action carried out in a reasonable manner.

How to do it better: A strategic approach to performance management

While the FWC will back reasonable management action, managing performance should never be a one-size-fits-all process. Crucial factors such as an employee’s length of service, age, seniority, and past performance history must heavily influence your HR strategy.

When dealing with long-serving employees who have no prior history of performance issues, an abrupt shift to a formal PIP can damage trust. Instead, consider these Bloom HR approaches:

• Adopt a performance development mindset: If a long-standing team member suddenly experiences a performance slump, don’t head straight for a rigid PIP. Frame the initial process as performance development rather than improvement, shifting the focus onto support, guidance, and capability building.
• Lead with relationship leadership and empathy: Start from a place of understanding. Ask what is happening behind the scenes. A performance slump is often driven by systemic changes, new technology, or organisational restructuring that an older or long-standing employee may be struggling to navigate.
• Break poor habits gently but firmly: Years of non-management or shifting company structures can breed bad habits. You can realign expectations through increased supervision, clearer guardrails, and frequent informal feedback sessions to change behaviours that have formed over time.
• Document everything, including informal support: Taking a gentler, relationship-driven approach does not mean skipping the paperwork. Keep records of the emails, meetings, phone calls, offers of support and agreed actions. If performance does not improve and a formal process becomes necessary, this documentation ensures you can justify and outline to the employee the attempts before implementing a formal process.

The Bloom HR Takeaway

Addressing underperformance can be one of the hardest, most fraught, not to mention time consuming processes for managers and it’s not uncommon for employees to mistake constructive feedback for a personal attack. This FWC ruling serves as a reassuring reminder for Australian employers: you have a fundamental right to manage your team and hold them accountable to performance standards, but its not a one size fits all. Ensure to consider all the factors before your embark on a formal process. Put the human back into Human Resources!!

Either way, it’s comforting to know that Fair Work is ruling by the law. And reasonable management actions ARE NOT bullying. The trick is knowing what is ‘reasonable’, and that can be different for each case.

Facing a difficult performance conversation?

Don’t go it alone or guess the legal boundaries. Book a free 30-minute chat with the team via our booking page, and we will give you a compliant PIP and warning letter template to ensure your business stays protected.

The post Fair Work Friday: Performance Scrutiny Is Not Workplace Bullying appeared first on Bloom HR.

The Federal Court of Australia handed down a staggering $2.8 million financial blow to the Hawkesbury Race Club. A highly successful marketing manager who had been with the club since 1991 was subjected to a relentless campaign of workplace bullying, micromanagement, and intimidation by the club’s newly appointed CEO. Over multiple months, the CEO withheld her bonuses, flooded her inbox with argumentative emails, and questioned her integrity. When she raised the immense stress this was causing her, the board failed to step in or launch a proper investigation. Instead, they backed the CEO and placed the employee on a performance management plan. As a direct result, the employee suffered a permanent, severe psychiatric injury and could never return to work.

The Ruling

The Federal Court found the employer directly negligent and vicariously liable, ordering them to pay a record $2.8 million in damages, penalties, and interest. The breakdown included over $1.1 million for past economic loss, nearly $870,000 for future economic loss, and personal statutory fines for both the club and personally to the CEO. The judge made it clear that the club’s total failure to activate a proper workplace investigation or respond adequately to the employee’s complaints effectively destroyed her livelihood.

Why this matters (and why I’m appalled)

As the Founder & CEO of Bloom HR, I have to call this out: This is the ultimate, catastrophic consequence of an organisation protecting an executive’s ego over an employee’s safety.

To see a board look the other way when a long-standing, high-performing employee explicitly says she is drowning in stress is worse than unethical. I can image the racing fraternity to be a boys club, but this poor woman will never be the same. Turning a blind eye to an overbearing, toxic executive won’t stand any longer. This case proves. that. Boards must act and act unbiasedly and ethically – or face massive financial and legal liability.

The court’s decision sends a clear, costly message to all Australian organisations: you cannot treat an employee’s legitimate psychological distress as a “performance issue” or have different rules for the C-suite.

How we can do it better

This landmark case leaves HR and business leaders with a clear message regarding psychosocial hazards and executive accountability.

• Zero Executive Immunity: No matter how senior a leader is, or how much revenue they generate, they are not above the law. If an employee lodges a complaint against a CEO, the board must act independently and immediately.
• Trigger Independent Investigations: When a power imbalance exists, even internal HR may feel compromised or afraid to speak out. Boards should be engaging an external, independent workplace investigators to ensure a fair, unbiased process.
• Listen to the Red Flags: When an employee reports that workplace behavior is impacting their sleep, mental health, or well-being, that is a formal alert. It requires a documented risk assessment and immediate intervention, not a performance management plan.

The Bloom Takeaway

Workplace culture starts at the top, but accountability stops at the courtroom door. If you choose to protect a toxic bully in a leadership role, prepare to pay the price, both culturally and financially.

Managing complex workplace grievances and compliance requires expert care.

Would you like a free consultation to discuss a current HR issue keeping you up at night? Or are you considering outsourcing your HR so we can get on with your business?

Call us on (02) 8114 4449 or schedule a free 30 minute consultation.

The post Fair Work Friday: $2.8m Workplace Bullying Outcome appeared first on Bloom HR.

National charity organisation The Smith Family has entered into an Enforceable Undertaking after self-reporting more than $5.9 million in underpayments affecting 784 current and former employees.

The Case: How a Lack of Systems Creates Massive Underpayments

Between 2016 and 2024, staff across multiple departments: including education program workers, managers, engagement advisors, and back-office corporate teams in marketing, accounting, and HR: were paid incorrectly.

The charity self-reported the non-compliance to the Fair Work Ombudsman in 2023 after identifying the discrepancies during an internal review. The total back-payments reached $5.912 million, which includes underpaid wages, superannuation contributions, and interest. Individual back-payments ranged from $1 to over $121,000, with an average payout of about $7,900 per person.

The Back-Story: The Two Fatal Compliance Mistakes

The Fair Work Ombudsman investigation found two clear systematic failures that allowed these underpayments to go unnoticed for eight years:

• Award Confusion: The organisation lacked adequate systems to correctly identify which industrial instruments, such as the correct modern award or Enterprise Agreement, applied to specific employees. This meant many staff missed out on minimum rates, overtime, allowances, and public holiday pay.
• The Classification Trap: Even when they identified the correct framework: like the Social, Community, Home Care and Disability Services Industry Award (SCHADS Award): they unlawfully classified employees at a lower grade than was appropriate for their qualifications, experience, or actual duties.

Because the charity failed to conduct regular payroll and classification reviews, these errors compounded year after year.

How to do it better:

• Audit Your Classifications: Never look at a job title alone when determining pay. You must map the actual day-to-day duties, decision-making responsibilities, and required qualifications against the specific award definitions.
• Implement Automated Systems: Moving away from manual or legacy tracking is crucial. Part of The Smith Family’s commitment under the Enforceable Undertaking is implementing an automated time-and-attendance system to ensure proper tracking of hours and overtime.
• Schedule Routine Independent Reviews: Awards and enterprise agreements change regularly. Conducting an annual or bi-annual payroll compliance audit ensures a minor administrative slip-up doesn’t turn into a multi-million-dollar liability over a decade.

The Bloom HR Takeaway

In the small business and NFP space, leaders are often operating under tight budgets and managing complex funding models. However, this case demonstrates that compliance cannot be treated as a set-and-forget task.

The Smith Family did the right thing by self-reporting and fully cooperating, which is why they were able to sign an Enforceable Undertaking rather than facing litigation in court. But the financial and operational burden of fixing an eight-year oversight is immense.

The hidden trap here is the classification error. It is incredibly easy for a manager to place a new hire on a baseline level without checking if their qualifications or leadership duties automatically bump them up to a higher band under the SCHADS Award. When you multiply that single error across hundreds of staff over several years, the numbers add up quickly.

Ensuring your payroll systems match your actual award obligations is not just a matter of finance; it is about protecting the sustainability of your organisation and valuing the people who deliver your mission.

Are your modern award classifications accurate, or is a hidden payroll error risking your organisation’s compliance? At Bloom HR, our HR Advisory service specialises in award mapping, compliance audits, and system configuration to ensure your processes remain robust and transparent.

Call us on (02) 8114 4449 or schedule a free 30 minute consultation

The post Fair Work Friday: The $5.9 Million Award Classification Lesson appeared first on Bloom HR.

Navigating Fair Work compliance is about to change significantly for the community services sector. On 1 June 2026, the Fair Work Commission Full Bench handed down a landmark decision completely restructuring the Social, Community, Home Care and Disability Services Industry Award, known as the SCHADS Award. Prompted by an extensive review into gender-based undervaluation, the Commission determined the old framework was “no longer fit for purpose” due to its overwhelming complexity and multi-stream pay silos. This sweeping overhaul introduces a single integrated Final Classification Structure that fundamentally alters how employees are classified, how they progress, and what they must be paid.

The Case

The SCHADS Award covers the vast majority of social justice, charity, and care sector workers across Australia. For over a decade, employers operating under this award have had to juggle a fragmented system split across multiple schedules (Schedules B, C, E, and F). This multi-stream setup meant that employees performing work of comparable value were often subject to entirely different pay structures and rules. Managing rosters and cross-utilising staff across different service streams became a legal minefield, leaving many organisations highly vulnerable to unintentional misclassification, complex pay disputes, and severe underpayment compliance risks.

The Ruling

The Fair Work Commission historic ruling completely abolishes the old, separate award schedules and revokes the separate Equal Remuneration Order (ERO) framework, absorbing those rates into a new unified minimum wage scale. In their place, the Commission is introducing the Final Classification Structure (FCS).

The FCS applies universally across social and community services, home care, crisis services, and disability work. Instead of relying on rigid, task-based role descriptors, the new structure aligns classification levels directly with qualifications and equivalent experience (including lived experience).

While the new minimum rates mean wage adjustments vary from a 1 percent reduction to a 17 percent increase for general social and community services, some disability support workers could see pay increases of up to 27 percent. Crucially, the Commission has built in transitional protections, ensuring that if an employee’s current pay rate is higher than the new minimum, their higher rate is legally preserved so they do not suffer a reduction in pay.

The implementation follows a phased timeline:

• 1 October 2026: Applies to home care disability workers currently under Schedule E, who will receive an initial interim wage uplift of approximately 15 percent to fix the unjustified disparity between disability care and aged care roles.
• 1 October 2027: Full implementation of the Final Classification Structure across the rest of the entire sector.

How to do it better

This structural shift requires proactive workforce planning and a complete rethink of how performance and remuneration are managed.

Transition from task lists to evaluative capability mapping

Because the new structure replaces prescriptive role lists with broader criteria based on qualifications and equivalent experience, employers must make evaluative judgments. You will need to carefully assess whether an employee’s practical skills or lived experience are truly equivalent to formal qualifications to place them correctly on the new scale.

Establish robust performance and competency assessment frameworks

In addition, the Commission has made it clear that there is no automatic annual pay increments (though this was already in place). Pay point progression will only occur after an employee successfully demonstrates competency and satisfactory performance. Organisations must implement clear, objective performance review processes to support these progression decisions and minimise the risk of industrial disputes when progression is withheld.

Execute strict labor cost modelling before the NDIA review

While the Commission suggested these changes would not require significant additional Commonwealth funding, employers are facing material labor cost increases, particularly in disability support segments. Organisations must model these cost impacts immediately while awaiting the National Disability Insurance Agency (NDIA) Annual Pricing Review results to understand the full financial impact on their operating budgets.

The Bloom HR Takeaway

At Bloom HR, our vision is to create workplaces where people feel valued and empowered to reach their full potential. This landmark restructuring represents a major long-term win by removing the convoluted silos that have complicated community sector administration for years. However, transitioning an entire workforce to a brand-new classification matrix and introducing performance-linked award progression requires significant HR expertise. Utilising professional outsourced HR solutions is a highly effective way to navigate this transition smoothly, audit your position descriptions, and protect your organisation from compliance risks.

To discuss how we can help you automate these processes using a digital engine that is efficient and affordable, reach out at hello@bloomhr.com.au | call +61 2 8114 4449 | or book in for a free 30 minute meeting at a time that suits you.

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Supporting an event dedicated to the wellbeing of this workforce is exactly where we belong, because we believe the people doing the most important work in our community deserve the highest calibre of support. 

I would like to extend our thanks and gratitude to the team at Q Shelter for inviting us to be part of such a wonderful day for the sector.  Huge thanks also to Courtney Pomerenke from our digital partner, Employment Hero, who joined me on the day to demonstrate the HRIS modules we can deliver to our clients.

The Value Impact Chain: Psychosocial Safety as a Foundation

In my closing address at the summit, I spoke about the Value Impact Chain. It is a mission-driven spin on the traditional Value Profit Chain: the simple truth that when you look after your staff, they are empowered to look after your clients.

But looking after staff isn’t just about encouraging resilience; it is about ensuring psychosocial safety.

In many organisations, the chain is weighed down by mechanical friction and systemic stressors: manual salary reviews, tracking expired police checks, and clunky or non-existent performance frameworks. When these structures are manual or missing, it contributes to a workplace environment fraught with administrative burden and burnout.

The shift is simple but powerful:  By removing the compliance weight and silencing the administrative noise, you move towards your positive duty to provide a safer workplace. It frees your people to focus on what truly matters; coaching, professional development, and the customer. When your team is protected by a mature foundation, they have the emotional and professional capacity to truly inspire the communities they serve. 

To find out how we can help bring this to your organisation, I’d love to hear from you. I can be contacted on 02 8114 4449 or email to hello@bloomhr.com.au.

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