Looming IR laws to ‘intensify productivity challenges’ for finance teams
Finance teams will need to adapt swiftly and strategically to new industrial relations reforms commencing from next week, warns software firm Rippling.
Upcoming industrial relations reforms, which start on 26 August, will have implications for areas such as payroll management that will need to be managed by finance teams, according to accounting and HR software Rippling.
The IR reforms which form part of the government’s Closing Loopholes No.2 Act include the introduction of the right to disconnect, stricter definition of casual work, and the reinforcement of fair work practices.
Rippling VP and head of Asia, Matt Loop, said the new reforms are one of the most significant overhauls in workplace laws in recent years.
Like any major workplace reforms, Loop warned the changes will likely have implications for productivity, which is currently a major concern for finance leaders.
“As Australian businesses grapple with rising operational costs, fierce market competition, and an ever-evolving regulatory landscape, finance leaders are under increasing pressure to enhance productivity while safeguarding profitability,” said Loop.
“However, for many, the new workplace laws under the government’s industrial relations reforms are set to intensify these challenges.”
Recent research by Rippling revealed that increasing productivity is a top priority for almost half, or 46 per cent, of finance leaders.
The high cost of doing business was also identified as another key issue, which may be further exacerbated by compliance costs associated with the new workplace laws.
“For finance leaders, these reforms present a dual challenge: ensuring compliance while simultaneously driving productivity in a complex and often unpredictable environment,” said Loop.
“Given the central role of payroll in managing employee compensation and compliance, IR reforms will also have a direct and significant impact on how payroll is managed.”
The introduction of the right to disconnect reform will mean that finance teams need to ensure that payroll systems can accurately track work hours, manage overtime, and handle any pay adjustments in compliance with these new rules.
Moreover, the reforms’ emphasis on fair work practices and the definition of casual work means that payroll systems must be capable of handling a more nuanced and legally compliant approach to employee classification and compensation, Loop added.
“This includes accurately distinguishing between casual and permanent employees, applying the correct pay rates, and ensuring that all entitlements, such as leave and superannuation, are correctly calculated,” he said.
Automating payroll processes will be an important strategy in adapting to the new changes as it will help finance teams to reduce the risk of errors and ensure consistent compliance with the new measures.
“Automation can handle complex calculations, track compliance with fair work practices, and reduce the administrative burden on finance teams,” said Loop.
Businesses may also need to consider how they can leverage global talent and, in some cases, may need to engage external consultants, he said.
“Experts can help identify potential risks, suggest compliance strategies, and ensure that your organisation is fully prepared for the changes,” said Loop.
“By investing in technology, exploring global talent, and seeking expert advice, finance leaders can ensure that their organisations remain compliant while driving growth and profitability in an increasingly regulated environment.”
About the author
