Modern Award Review Process

Every four years the Fair Work Commission is required under the Fair Work Act 2009 to conduct a review of all Awards. The first review commenced on 1 January 2014 and despite many hearings, directions and decisions is still not completed. See the full article which summarises the more important parts of the review process to date.

Annual Leave

The Commission was asked to vary the annual leave clauses in all Awards to allow employers to better manage leave. The Commission agreed to include provisions for:

  • Excessive annual leave, which allows an employer to require an employee with more than 8 weeks accrued leave (10 weeks for a shift worker) to take some of the accrued leave, provided that the amount of accrued leave cannot be reduced to less than 6 weeks;
  • Cashing out annual leave, which allows an employer and individual employee to agree that the employee can forego the taking of the leave and take the cash equivalent instead;
  • Granting annual leave in advance, which allows an employer and individual employee to agree that leave may be taken and paid for before it has accrued.

The Commission is in favour of including these provisions, but final approval has not yet been given as the Commission is still in the process of finalising the wording to be used for each specific Award. We expect this to be finalised in the near future.

The Commission was also asked to vary all Awards by including provisions which would allow employees to purchase additional annual leave by way of reducing their ordinary wage rate. This part of the application was not approved.

AWARD FLEXIBILITY

The Commission has addressed a number of issues under the heading of Award Flexibility. The one of most importance is time off in lieu of overtime, or TOIL. TOIL provisions allow employees who have worked overtime to take paid time off work instead of being paid for the overtime worked. The Commission agreed to vary all Awards which do not currently include TOIL provisions and agreed to allow for TOIL on a time for time basis, rather than on a penalty rate equivalent basis. That means that if an employee works one hour overtime they can take one hour off work as paid time, and not one and one half hours (assuming the overtime penalty is time and one half). The Commission is in favour of including these provisions, but final approval has not yet been given as the Commission is still in the process of finalising the wording to be used for each specific Award. We expect this to be finalised in the near future.

PENALTY RATES

The Commission was asked to review penalty rates in hospitality related Awards. No decision has yet been made in relation to this part of the review process and we do not expect a decision in the near future.

ALLEGED NES INCONSISTENCIES

Some Awards contained provisions which were thought to be inconsistent with the National Employment Standards. As the NES provide for minimum entitlements, any Award provision which sought to reduce any of the NES have no legal standing, but the Commission decided to vary inconsistent provisions to reduce, or avoid, confusion. It is not possible in this short summary to detail all of the changes made, but to give an example, a number of Awards had annual leave accruing on a monthly basis. This was inconsistent with the NES, which simply state that leave accrues progressively (technically, for each hour worked), and the Commission has deleted all such provisions. Another example was the Horse and Greyhound Training Award 2010 which provided for less notice of termination than the NES require. The Commission also deleted those provisions.

 If you would like Quartz Consulting to conduct a thorough search of your particular Award to determine if any similar changes have been made, please contact one of our consultants.

FAMILY FRIENDLY PROVISIONS

The ACTU asked that in addition to existing personal leave provisions, the Commission include paid family and domestic violence leave in all Awards. The claim also included variations to existing parental leave provisions, including paid antenatal leave. Hearings in relation to these matters are ongoing and a decision appears to be some way off.

CASUAL AND PART-TIME EMPLOYMENT

The Commission has addressed the following matters, chiefly with a view to determining if standard provisions can be included across a large number of Awards: part-time minimum engagement; part-time rostering and pattern of hours; part-time overtime; casual minimum engagement; casual conversion (to part-time); and restrictions on casual engagement. Although many parties to the hearings have submitted draft clauses, the Commission is yet to make any decisions to vary Awards.