26Sep 06

What's so bad about keeping records?

Posted by @ 13:40 1 comments

Minimising red tape and administrative processes has always been a key goal for most enterprises, but occasionally you get the suspicion that such tasks are not always being undertaken from the purest of motives.

There's been a certain amount of squabbling in corporate circles recently over new rule-keeping requirements imposed by the federal government's WorkChoices legislation.

Safeguards under WorkChoices aren't exactly thick on the ground, but one of the more important ones is that detailed records of work hours must be kept for anyone on an hourly wage being paid less than AU$55,000 a year. That regulation is designed to ensure that companies don't breach laws concerning working hours and overtime (which are defined as roughly 38 hours a week, but can be subject to averaging over a longer period of time).

The record-keeping requirement had already been deferred once after complaints that businesses had not been given enough notice to implement appropriate systems, but becomes a requirement as of September 27. Yet some business heads are arguing that this is still unreasonable.

One sector complaining long and hard is the cash-rich mining and resources industry. A national newspaper recently quoted from a letter written by Christopher Platt of the Australian Mines and Metals Association to Workplace Relations Minister Kevin Andrews which argued that many industry participants were not able to maintain the required records.

Platt made a fairly astonishing assertion, worth quoting in full: "If the failure to keep records has not resulted in an underpayment of wages and has not been motivated by a desire to mask an underpayment of wages, then the breach is purely administrative in nature and should not result in the prosecution of the employer.

This gives rise to one immediate question: how on earth do the businesses in question know that their failure to keep records hasn't resulted in someone being underpaid? If they don't have any records, then it would seem that wages are being paid more or less at random.

That in turn suggests two unpleasant scenarios: either everyone is in fact being underpaid (bad for the workers), or everyone is being overpaid because the record-keeping system is sloppy (bad for the shareholders).