On 4 December 2009 the Australian Industrial Relations Commission (Commission) handed down its decision dealing with the Stage 4 modern awards. This decision deals with the final group of modern awards to be created by the Commission during the long running award modernisation process.
The award modernisation process is a significant part of the Government's transformation of Australia's workplace relations system. Modern awards will, along with the National Employment Standards (NES), form part of the new safety net of employee entitlements that will commence on 1 January 2010.
Miscellaneous award
In its decision on Stage 4 modern awards, the Commission handed down the final version of the Miscellaneous Award 2010 (Miscellaneous Award), the exposure draft of which had caused consternation amongst employers and commentators alike.
The exposure draft of the Miscellaneous Award was controversial due primarily to its coverage clause, which allowed the Miscellaneous Award to cover a very wide range of employees, potentially including a large number of employees not traditionally covered by awards, such as senior employees and managers as well as professionals, including accountants.
Whilst further variation of the Miscellaneous Award (as with the other modern awards) is not out of the question, the version handed down on 4 December 2009 should be treated as the final version.
Reduced Coverage
In handing down the final version of the Miscellaneous Award, the Commission announced that it had amended the coverage clause in the Miscellaneous Award so that coverage does not extend to employees not traditionally covered by awards.
Specifically, new clause 4.2 of the Miscellaneous Award provides that 'The Award does not cover those classes of employees who, because of the nature or seniority of their role, have not traditionally been covered by awards including managerial employees and professional employees such as accountants and finance, marketing, legal, human resources, public relations and information technology specialists.'
Classifications
A further concern that arose from the exposure draft of the Miscellaneous Award was the classification structure which extended to cover graduate employees who were carrying out duties requiring graduate qualifications.
The classifications have now been amended to reduce their reach. In the final version of the Miscellaneous Award, the definition of level 4 (the highest classification) states 'an employee at this level has advanced trade qualifications and is carrying out duties requiring such qualifications or is a sub-professional employee'.
Stage 4 modern awards
As well as the Miscellaneous Award the Commission handed down a further 28 modern awards, as well as varying the Educational Services (Teachers) Award 2010.
Amongst the other Stage 4 modern awards handed down on 4 December 2009 were the:
- Restaurant Industry Award 2010;
- Legal Services Award 2010;
- Car Parking Award 2010;
- Real Estate Industry Award 2010; and
- Water Industry Award 2010.
Annualised salaries
Prior to the 4 December 2009 decision, the Commission had handed down two decisions on 16 November 2009 dealing with variations to the Banking, Finance and Insurance Award 2010 (BFI Award) and the Clerks – Private Sector Award 2010 (Clerks Award).
Prior to the 16 November 2009 decision, both of these modern awards had included a clause providing for an exemption rate so that employees who were paid an amount that was a certain percentage above a set minimum rate of pay were exempted from certain clauses in these modern awards.
The decisions of 16 November 2009 removed the exemption rate clauses and replaced them with clauses providing for the option of annualised salaries.
Under the annualised salaries clauses in the BFI Award and the Clerks Award, an employer may, subject to meeting procedural requirements, pay an employee an annual salary in satisfaction of any or all of the following provisions:
- minimum weekly wages;
- allowances;
- overtime and penalty rates; and
- annual leave loading.
The above provisions are the only terms of the BFI Award and the Clerks Award that can form part of an annualised salary arrangement; the other terms of the BFI Award and the Clerks Award will continue to apply.
We note that the BFI Award and the Clerks Award are not the only modern awards to contain clauses providing for annualised salaries. Employers should review the modern awards applicable to their workforce to determine if they contain clauses providing for annualised salaries.
Fair Work Information Statement
From 1 January 2010, employers must provide all new employees with a Fair Work Information Statement (FWIS). The provision of the FWIS is a term of the NES.
The FWIS sets out information for employees regarding the NES, modern awards, agreement making and various other rights and entitlements under the Fair Work Act 2009 (Cth).
The FWIS has now been produced by the Fair Work Ombudsman and is available on the Fair Work Online website.
Click here to download a copy of the FWIS.
Compliance
As noted, the new safety net of employee entitlements - NES and modern awards will commence on 1 January 2010.
Employers should ensure they are aware of their obligations and if they have not done so, consider which modern award/s are likely to apply to their workforces from 1 January 2010, so they are ready to comply with their new obligations.
Please contact a member of the Hall & Wilcox
Employment team to assist you in preparing for the new changes.