Common Award Misconceptions
In our last newsletter, we advised that Fair Work had increased minimum pay rates set out in Awards. We thought it an opportune time now to discuss common misconceptions with Awards and to remind Employers of their industrial obligations.
An Award Doesn’t apply to my workforce, they are paid too well
Awards do not generally depend on how much a person earns but more about the type of work that they do. The Classifications definitions and the coverage clauses of Awards will provide further information about whether an employee is or is not covered by an Award.
Modern Awards may also apply to people who were not previously covered by Awards pre January 2010. Therefore, if you have not reviewed and assessed Award coverage since then, it’s time to act now.
I pay my workers above Award so I don’t pay in accordance with the Award
Another common misconception. While many employers choose to pay their employees above Award, it does not mean that they can avoid other obligations in the Award like penalty rates, shift allowances, overtime, loadings and monetary allowances.
The Award may also govern things like meal breaks, hours of work, redundancy and consultation, leave calculations, etc all of which should be complied with.
I have a loose agreement with my workers where I pay them a higher hourly rate but no overtime pay for the first 2 hours
An arrangement like this can work if the higher hourly rate is sufficient to ensure that the employee is not worse off than they would be under the Award. However, such arrangements must be properly documented.
Awards often have flexibility clauses which detail the basis on which provisions can be varied and how.
How can we help?
At Osborn Jensen, we can assist you to determine which Awards your employees come under and the classifications within those Awards which affect you and your employees. We can assist you to determine whether your pay rates are adequate to allow you to absorb allowances, penalties or the like and we can assist you in documenting the necessary arrangements.