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Modern award pay rates phase in from 1 July 2010

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Modern awards commenced operation on 1 January 2010 pursuant to major workplace reforms introduced by the Rudd Government and delivered under the Fair Work Act 2009.

Modern awards, by and large, replaced the then current state and federal award regimes throughout Australia and apply to all Australian employers, save for non incorporated employers in WA.

Certain aspects of modern awards, fundamentally minimum wage rates, casual and part-time loadings and penalty rates for weekend, public holiday and night work, will phase in over a 4 year period commencing 1 July 2010.

Debate continues among academics as to whether or not overtime rates of pay provided under modern awards applied from 1 January or whether they form part of the phasing in provisions.

The reality is that both Julia Gillard and the Fair Work Ombudsman are on record to say that overtime rates of pay kicked in from 1 January 2010.

If this wasn’t enough for Australian employers to contend with, Fair Work Australia will hand down its first minimum wage rate increase on 3 June 2010 that will apply across all modern awards as and from 1 July 2010. It is widely tipped hourly minimum rates will increase between 40 cents and 70 cents per hour.

Provided below are 2 simple steps that employers should take to ensure legal compliance with modern awards and the National Employment Standards, which also commenced operation on 1 January 2010.

Step 1

Determine which modern awards apply to their workplace and whether or not prevailing workplace conditions comply with legal minimum requirements.

Employers should note that it is not legally possible to contract out of award conditions through the use of common law employment contracts. Salaried positions offered to award staff under such contracts will not protect employers from claims for overtime, penalty rates and annual leave loading.

Mason Sier Turnbull offers a fixed price Online Toolkit that assists employers by providing easy access to wage updates, National Employment Standards and other documentation necessary to ensure compliance with the Fair Work Act.


Step 2:

If, as a result of step 1, an employer determines that it is not legally compliant but does not wish to change the way in which it remunerates their staff, the employer should implement an enterprise agreement covering all award staff in their workplace that enshrines prevailing workplace conditions.

An enterprise agreement is the only way, moving forward, that award conditions and the like can be displaced.

Mason Sier Turnbull offers fixed price Enterprise Agreement solutions for businesses wanting to displace award conditions in their workplace.

    We invite you to contact Herbert Fischbacher or any of our Workplace Relations lawyers to discuss how modern awards, the National Employment Standards and the Fair Work Act generally impacts on your business and to ensure legal compliance.

    Author: Herbert Fischbacher