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Modern Awards Modern Awards

Every employer is familiar with the term Modern Award. It is potentially the most important term in understanding employment relations, however, it is also the most commonly misunderstood. So how do you know which Modern Award relates to your employees and industry?

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Understanding Modern Awards.

As an employer, one of your main obligations is to ensure Modern Awards are correctly applied throughout your workplace. Failure to comply could lead to you and your business being investigated and potentially fined.

With 122 Modern Awards in place, understanding which one satisfies your business, industry and employees can be confusing. It is also important to note that in some cases, not all employees will fall under the same Modern Award, meaning differing roles may require different categorisation.

Considering this, cementing your understanding surrounding Modern Awards and keeping up to date on any changes associated with these is paramount.

 

What is a Modern Award?

In basic terms, Modern Awards outline the minimum entitlements awarded to employees, covering wages and conditions, based on industry and occupation. These conditions include the type of employment, overtime, penalty rates, allowances, superannuation and leave entitlements. Modern Awards stem from the National Employment Standards (NES), which outline the 10 minimum standards for employment as outlined below.

  • Maximum weekly hours
  • Flexible working requests
  • Parental leave and related entitlements
  • Annual leave
  • Personal, carers and compassionate leave
  • Community service leave
  • Long service leave
  • Public holidays
  • Notice of termination and redundancy pay
  • Fair Work Information Statement

Collectively, the Fair Work Act 2009, NES, and Modern Awards instruct employers on the standards associated with employment of all staff, in order to ensure every employee is treated fairly and every business knows their obligations.

 

Background.

Modern Awards provide employees with their entitled minimum wage and working conditions. The Awards were introduced in 2010 and are governed by the Australian Industrial Awards Commission (AIRC). Originally, there were 1,500 Modern Awards ranging from employer specific Awards, National Awards and Preserved State Awards.

Today however, the Awards have been reworked into 122 industry and occupational Awards. Every year, the Fair Work Commission conducts an annual wage review which can result in an increase to minimum wages. Changes to pay rates usually must be applied from the first pay period on or after 1 July each year.

 

Who do Modern Awards cover?

Modern Awards cover most employees, unless they are employed under an Enterprise Agreement which excludes an Award or receive a guaranteed annual income of over $136,700 (prorated for part-time employees). Your employees only fall under an Enterprise Agreement if you have gone through the process of negotiating a work agreement, between yourself, your employees and perhaps a professional representative. A clear set of rules are outlined by the Fair Work Act 2009 in regards to these types of arrangements.

Some employees, such as junior employees, may not be covered by a Modern Award however, a national minimum wage is set for such employees, which also includes a loading for all casual employees who are not covered by either an Award or an agreement.

 

Examples of Awards:

  • Aged Care Award
  • Building and Construction General On-site Award
  • Children Services Award
  • Clerks Private Sector Award
  • Hair and Beauty Industry Award
  • Hospitality Award
  • General Retail Industry Award
  • Real Estate Industry Award
  • Miscellaneous Award
  • Vehicle Manufacturing, Repair, Services and Retail Award

 

Something to consider.

Within your own business, it is important to recognise that all your employees may not necessarily fall under the same Modern Award. For example, within a restaurant, an employee whose primary duty is accounts will not fall under the same Award as the chef. You must also consider what effect the employee’s level of experience and qualifications will have on their rate of pay under the allocated Modern Award. If a physiotherapist is hired straight out of university, their pay rate would be lower than if they had five years of experience. You would therefore be required to review their pay regularly in order to substantiate their qualifications and remain compliant.

Employsure understands that with ambiguous and complex legislation, companied with the vast number of categories attached to Modern Awards, determining which one/s apply to your business can be a tricky and time consuming.

Employsure can take the hassle out of navigating Modern Awards, by ensuring you are aware of your obligations under the Fair Work Act and are kept up to date on any legislative changes.

 

For peace of mind, please call our 24-hour Advice Line now on 1300 651 415