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Awards for a Modern Workplace or Return to the Future

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An aspect of the Government’s Forward with Fairness policy platform which is already on foot is the award modernisation.

In its 28 March 2008 amendments to the Workplace Relations Act 1996, the Government empowered the Australian Industrial Relations Commission to undertake the award modernisation.  The Australian Industrial Relations Commission is required to complete the award modernisation by 31 December 2009 so that the modern awards may commence operation in conjunction with the National Employment Standards on 1 January 2010.

The Fair Work Act 2009 addresses the operation of modern awards following their creation under the Workplace Relations Act and how they will apply to employees from 1 January 2010.

What Will be Included in a Modern Award?

Modern awards may include items about:

  • minimum wages
  • types of employment
  • hours of work
  • overtime rates
  • penalty rates
  • annualised wage arrangements
  • allowances
  • leave and leave loading
  • superannuation
  • procedures for consultation, representation and dispute settlement
  • outworker conditions
  • industry specific redundancy schemes and
  • flexibility terms

The Australian Industrial Relations Commission has released draft modern awards all industries to be covered by modern awards.  These draft awards may be viewed at the Australian Industrial Relations Commission website at www.airc.gov.au.

Who Do the Modern Awards Cover?

Modern awards will cover all employees who fall within the scope of the modern award except:

  • high income employees (with the high income threshold prescribed under accompanying regulations as varied from time to time)
  • employees covered by enterprise agreements (except to the extent that the modern award is referred to in assessing an enterprise agreement for compliance with the better off overall test and in determining minimum base rates of pay) or transitional instruments (ie. existing registered workplace agreement)

Ongoing Review of Modern Awards

A Full Bench of FWA will be required to conduct a 4 yearly review of modern awards in order to ensure that modern awards continue to meet the objectives of modern awards which include:

  • the need to encourage collective bargaining
  • the need to promote flexible workplace practices and the efficient and productive performance of work and
  • the likely impact of any exercise of modern award powers on employment growth, inflation and the sustainability, performance and competitiveness of the national economy

FWA may vary a modern award outside of the scheduled 4 yearly reviews if FWA determines that this is necessary in order to achieve the objectives of modern awards, where a modern award is ambiguous, or on referral from the Australian Human Rights Commission.


Modern awards will operate to greatly reduce the number of awards that apply in Australia and to eliminate different minimum terms and conditions of employment which operate across state borders.

Modern awards will, however, continue to set minimum conditions which are prescribed for a particular industry of employee.  Accordingly, enterprise agreements will continue to play an important part in setting tailored workplace conditions for particular businesses.

If you have any questions or concerns about how the modern awards will apply to your business, please contact the MST Workplace Relations Team on 03 8540 0200.


Author: Katie Sweatman