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As a business owner, or an employer, one of your main obligations in that position is to ensure that Modern Awards are adhered to and correctly applied throughout your workplace. If you are not on top of this, and in extreme cases, fail to comply with the relevant Modern Awards, you could find yourself in a situation whereby your business is investigated or even potentially fined.
There are over 120 Modern Awards currently in place that span many industries and job types. So it is understandable that knowing which one (or ones) satisfy your business, industry and employees is difficult. What makes the job even harder is that if you are running a business with a variety of roles, or one which covers several different functionalities, you may find that not all your employees fall under the same Modern Award. This means that you must work out which Awards specifically apply to the differing roles.
So with this in mind, it is essential that you maintain a sound understanding of Modern Awards and keep up to date with any changes or adjustments which are associated with them.
To keep it simple, Modern Awards provide an outline of the minimum entitlements which employees are entitled to. They primarily cover wages and conditions, and are based on the particular industry and occupation. When it comes to conditions, some of the key aspects that contribute to Modern Awards are the type of employment, overtime, penalty rates, allowances, superannuation and leave entitlements.
Current Modern Awards stem from the National Employment Standards (NES), which outline 10 minimum standards for employment. These minimum standards are:
• 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
By combining the collective effect of the Fair Work Act 2009, National Employment Standards, and Modern Awards, employers should have a much better understanding of the rights and entitlements relevant to their employees. This is important because every employee should be treated fairly, and if a business or employer is unaware of their obligations, they may find themselves under scrutiny with the possibility of action being taken against them.
Even though it is most important to know which Modern Awards are relevant to your business as they provide employees with their entitled minimum wage and working conditions, it is equally relevant to understand the Awards’ background and where they came from.
The Awards were introduced in 2010 and are governed by the Australian Fair Work Commission. Originally, there were 1,500 pre-modern Awards, and they were much more varied, ranging between employer specific Awards, National Awards and Preserved State Awards.
It is also important to note that every year the Fair Work Commission conducts an annual wage review which can result in an increase to the minimum wages for particular job roles. If changes are made to minimum wages, generally they need to be applied from the first pay period on or after 1 July each year.
In most cases, employees are covered by Modern Awards. However, employees that are employed under an Enterprise Agreement or employees that do not work in an industry or business covered by an Award or in a job classification provided for by an Award will not be Award covered.
You should know that your employees only fall under an Enterprise Agreement if you have gone through the process of negotiating a work agreement, which should have been agreed on between yourself, the relevant employees and perhaps even a professional representative. You can find a clear set of rules outlined by the Fair Work Act 2009 in regards to these types of arrangements.
It is also important to note that some employees, may not be covered by a Modern Award. However, a national minimum wage is set to cover such employees.
This national minimum includes a loading for all casual employees who are not covered by either an Award or an agreement.
There are many different kinds of Awards ranging across all industries. This is to ensure that no matter what the job type, all employees are ensured a fair working arrangement. Some examples of Modern Awards include the following:
• Aged Care Award
• Building and Construction General On-site Award
• Children’s Services Award
• Clerks Private Sector Award
• Hair and Beauty Industry Award
• Hospitality Industry (general) Award
• General Retail Industry Award
• Real Estate Industry Award
• Miscellaneous Award
• Vehicle Manufacturing, Repair, Services and Retail Award
While a lot of businesses may have all their employees falling under a single Modern Award, this is not always the case. If you are a business owner, it is important for you to recognise that there is the potential for some employees to fall under different Awards. For example, if you own a restaurant and employ both kitchen staff and business operations staff, an employee whose primary duty is accounts will not fall under the same Award as a chef or kitchen-hand.
You also need to consider what impact the employee’s level of experience and qualifications will have on their rate of pay under the specific Modern Award. For example, if a physiotherapist is hired straight after graduating from university, their pay rate should be lower than if they had five years of experience. In this case, you would be required to review their pay regularly in order to substantiate their qualifications and remain compliant with legislation.
Employsure understands that determining which Modern Awards apply to your business can be tricky and often quite time consuming. With the ambiguity and complexity of legislation being combined with the large number of categories attached to Modern Awards, it is no surprise that many business owners end up confused.
We 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, we can make sure that your business operates smoothly within the guidelines.
To know more about how we Employsure can help you with adhering to Modern Awards in your business, please call us on 1300 651 415, or book a Free Workplace Check here.
For peace of mind, please call our 24-hour Advice Line now on 1300 651 415