As part of the Modern Award Review there were changes made to some awards from 1 July 2020. These changes may have the effect of increasing exposure to business risk and costs associated with engaging employees covered under the following Awards:
Some changes have included:
- The clarification of which employees are covered by this award.
- If an employer is covered by an industry award, but there is no classification in that award for the particular employees concerned, then the Miscellaneous Award will cover these employees.
The extended coverage of this award may have consequences for a business where employees previously not covered by an award, may now be covered by this award and may now expose the business to additional claims such as unfair dismissal when previously they were not.
Fortunately, the coverage clause specifically excludes managerial and professional employees including accountants, finance, marketing, legal, human resources, public relations and information technology specialists. Businesses may therefore be able to argue that certain types of employees would still be excluded from award coverage.
An interpretation of these changes seems to therefore indicate that previously ‘award free’ employees within an industry may now be captured under the Miscellaneous Award. It is therefore recommended that businesses complete an assessment and review of previously assumed ‘award free’ employees in non-managerial/ professional positions within an industry to ensure compliance if these employees are now captured under the Miscellaneous Award.
Social, Community, Home Care and Disability Services Industry Award
Some changes have included:
- Permanent employees whose ordinary working hours include Saturday and / or Sunday work will be paid for ordinary hours worked as follows:
- Permanent employees whose ordinary working hours include between midnight on Friday and midnight on Saturday are entitled to 175% of the ordinary rate of pay, (excluding overtime hours).
- Permanent employees whose ordinary working hours include between midnight on Saturday and midnight on Sunday are entitled to 200% of the ordinary rate of pay, (excluding overtime hours).
- Casual employees are paid a casual loading as well as a penalty rate for working on Saturday, Sunday or overtime which equates to the following:
- Payment of 175% of the ordinary hourly rate for work performed on a Saturday, (inclusive of the casual loading) between midnight on Friday and midnight on Saturday.
- Payment of 225% of the ordinary hourly rate for work performed on a Sunday, (inclusive of the casual loading) between midnight on Saturday and midnight on Sunday.
- Casual employees working on a public holiday will be paid the casual loading in addition to the public holiday penalty rate as follows:
- Payment of 275% of the ordinary hourly rate of pay for hours worked on a public holiday, (inclusive of casual loading).
Traditionally the use of casual staff has provided a flexible and reasonably economic option to cover ad hoc operational requirements, particularly on weekends and public holidays.
This change will increase the cost of engaging permanent and casual employees on weekends and public holidays, where previously they were paid time and a half on Saturdays, double time on Sundays and double time and a half on public holidays.
It is therefore crucial that budgets and payroll are updated to reflect these changes and mitigated by appropriate workforce planning strategies to minimize additional unnecessary costs. If the business also has an applicable enterprise agreement covering your workforce, you must also check the applicable Award increases are comparable with the rates under your Enterprise Agreement. If the Award rates are now higher than provided under your existing Enterprise Agreement, you must update the rates to at least reflect the minimum provided in the applicable Award.
Aged Care Award
- An increase in casual rates for work on Saturday, Sunday or overtime worked has occurred as follows:
- Payment of 175% on ordinary hourly rate for work between midnight Friday and midnight Saturday.
- Payment of 200% on ordinary hourly rate for work between midnight Saturday and midnight Sunday.
- Payment of 275% on ordinary hourly rate for work on a public holiday.
As with the Social and Community Services Award above, it is also crucial that budgets and payroll are updated to reflect the changes to the Aged Care Award and include minimizing any additional unnecessary costs. If the business also has an applicable enterprise agreement, you must check the applicable Award increases are comparable with the rates under your Enterprise Agreement and adjusted as required.
- A clause has also been inserted to provide for regular casual employees with systematic and regular work to request to have their employment converted to full-time or part-time depending on the regular and systematic nature of their hours performed over the preceding 12 month period.
Given the changes to casual entitlements where casuals can now request permanent employment after 12 months of systematic and regular hours worked, considerations around the viability of using casual employees or not in place of permanent staff and the continued cost efficiency to the business of doing so is recommended.
Building and Construction General On-site Award
- Simplification of allowances are now paid as follows:
- General building and construction industry, civil construction industry and metal and engineering construction industry employees are to be paid an allowance of 6% of the weekly standard rate.
- Residential building and construction industry employees are to be paid an allowance of 4.8% of the weekly standard rate.
- With the exception of casual or daily hire employees, there is now provision by agreement to take time off instead of being paid overtime, where one hour of overtime is the equivalent of one hour of time off.
- In addition to the existing shift types an additional early morning shift is now provided for between 11pm and before 4.30am.
- Additional distant work payments are provided for.
- Annual leave loading is now calculated on the applicable ordinary hourly rate.
- Soil and aggregate testing employees are no longer covered under this Award.
While the allowances are now streamlined it is important to ensure that the change to allowances is reflected in employee payments and payslips.
Businesses may seek to maximise profits and reduce costs by allowing employees to take time off instead of paying additional overtime rates. However, if by doing so it increases the businesses requirements to engage more costly casual or labour hire options to back fill the time the employee is absent, then further thought is recommended around how to maximise the use of employees and the benefits of allowing time off in lieu instead of paying overtime.
If the business has soil and aggregate testing employees and are currently paying these employees under this award, they will need to assess which award these employees should now be paid under.
Joinery and Building Trades Award
Some changes have included:
- Updating the criteria for transfers, travelling and working away from the usual place of work provisions.
- With the exception of casual employees, there is also a provision by agreement to take time off instead of being paid overtime, where one-hour overtime is the equivalent of one hour of time off.
- Allowing for a written agreement between the employer and the majority of employees to change ordinary hours of work and rosters, breaks and overtime.
The provision for altering the hours of work, rosters, breaks and overtime by a written agreement between the employer and the majority of employees is a more flexible option which businesses may find more adaptable to change as operational requirements dictate.
This award has also made provision for time off instead of paying overtime (please refer commentary under Building and Construction Award above).
If you are an employer or Human Resources professional and are dealing with difficult award or award coverage problems we offer an obligation free consultation – please call +61 (07) 3876 5111 to arrange an obligation free consultation to discuss your inquiries and we will do our best to provide a helpful, practical solution.
About the Author
Jonathan Mamaril leads a team of handpicked experts in the areas of employment law and commercial law who focus on educating clients to avoid headaches, provide advice on issues before they fester and when action needs to be taken and there is a problem mitigate risk and liability. With a core value of helping first and providing practical advice, Jonathan is a sought after advisor to a number of Employers and as a speaker for forums and seminars where his expertise is invaluable as a leader in this area as a lawyer for employers.