The Government's proposed industrial relations legislation is likely to increase the cost and complexity of administration in industries dependent on award payments, according to HR software company, Aurion Corporation.

Aurion believes that a percentage of workplaces will find their current computerised payroll systems are unable to handle the demand.
 
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.
 
He says: “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.”
 
As an example, 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. Some payroll solutions will struggle to implement the new arrangements.
 
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, according to Basso.
 
“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," says Basso.  "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.
 
“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 every week.”
 
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.
 
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.
 
“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.”
 
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.
 
“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.”