On Friday 25 September 2009, the Australian Industrial Relations Commission (the Commission) released a statement regarding the final group of awards to be produced during the award modernisation process - stage 4 modern awards.
Along with the statement, the Commission published 29 draft awards, including the much awaited exposure draft of the Miscellaneous Award 2010 (Miscellaneous Award).
The Commission's release of their statement and the stage 4 draft modern awards is another significant step in the award modernisation process which is now entering its final months.
Employers have been awaiting the draft Miscellaneous Award for some time.
As we stated in our last update, the scope of the Miscellaneous Award has been uncertain and there was concern that it would be a 'catch all' award covering all employees that were not captured by another modern award.
Our review of the draft Miscellaneous Award indicates that it will not be as far reaching as originally anticipated, however there will be circumstances where it covers employees who are currently award free.
We still do not have absolute clarity over the application of the Miscellaneous Award. The Commission itself has said that the Miscellaneous Award will "have application in some areas of the workforce which have not been covered by awards before" and that it "is unclear which employees will be covered by this award."
Although the coverage clause of the Miscellaneous Award has been drafted to cover employees not covered by any another modern award, this potentially broad coverage is qualified by a number of exemptions. The Miscellaneous Award will not cover employees who are:
- in an industry covered by a modern award who are not within a classification in that modern award;
- in a class exempted from the operation of a modern award;
- excluded from award coverage by the Fair Work Act 2009 (Cth), such as employees have a guarantee of annual earnings (employees who earn over the $108,300 income cap); or
- covered by modern enterprise awards, enterprise instruments, State reference public sector modern awards, or State reference public sector transitional awards
The Miscellaneous Award will apply to employees in the classifications set out within the modern award. The classification structure is broad consisting of four levels.
- The first level applies to employees with less than three months' service, who are not carrying out the duties of a level 3 or 4 employee.
- The second level applies to employees with more than three months' service who are not carrying out the duties of a level 3 or 4 employee.
- The third level applies to employees with trade or trade equivalent qualifications who are carrying out duties requiring such qualifications.
- The fourth level applies to graduate employees who are carrying out duties requiring such qualifications
The Miscellaneous Award also provides for allowances, overtime and penalty rates to be paid to employees covered by the modern award.
Employers have already expressed concern over the application of these provisions, particularly to professional employees, such as accountants.
The Commission has determined that there will not be a modern award for accountancy practices, rather it indicated that these practices could be covered by the Miscellaneous Award.
While the Miscellaneous Award is unlikely to increase the basic wage costs of professional staff (the minimum wage is currently set at $733.30 per week), the potential impact of other aspects of the modern award such as overtime and penalty rates will be of some concern.
Many professional employees currently work well over the standard 38 hour week and often work after 7pm. Employers who find themselves covered by the Miscellaneous Award may be forced to pay considerably increased rates for such work.
The only ways for employers to lawfully avoid these modern award obligations will be to make individual flexibility arrangements with employees covered by modern awards, enter into high income guarantees with relevant employees, or introduce an enterprise agreement which will apply to the exclusion of the modern award.
Other industries will be affected by the Commission's stage four draft modern awards. The restaurant industry has been given its own modern award after a variation request from the Minister for Employment and Workplace Relations, Julia Gillard, separating the restaurant industry from the broad Hospitality Industry (General) Award 2010.
The real estate industry will have its own modern award, with special provisions for non-commission employees and commission-only employees.
There are also modern awards for the funeral directing industry, correctional and detention facilities (due to increasing privatisation of prisons) and fire fighting services.
Pre-school teachers will also be covered by the occupational award covering all teachers (the Educational Services (Teachers) Award 2010) rather than the award for the children's services and early childhood industry.
The labour-hire industry will not have its own specific modern award. Some employees employed by labour-hire firms will be covered by the modern awards in the industries in which they work, however most modern awards do not cover employees of labour hire firms. Modern awards can be varied to extend coverage to labour-hire employees, but if this is not done in a particular industry, labour-hire employees will most likely fall within the coverage of the Miscellaneous Award.
The next steps
The Commission's next steps will be to consider submissions from interested parties in relation to the stage 4 draft modern awards as well as submissions as to the content of transitional provisions for the third and fourth stage modern awards.