As employers welcome the new financial year, they need to make sure they are up to speed with the 1 July changes to the Fair Work regime to ensure they are fulfilling their obligations to employees.
The Fair Work Act 2009 (FW Act) requires the FWC to conduct an annual national minimum wage review. This year, the commission's Expert Panel for annual wage reviews (the Panel) chose to increase the national minimum wage by 3.3% (AU$22.20 a week or 59 cents an hour) to AU$694.90 a week (AU$18.29 an hour). Modern award increases to wages and allowances have also been applied.
The wage increase took effect on 1 July 2017 and impacts the employers of over 2.3 million Australian workers who are paid at the national minimum wage or are covered under a modern award.
While pay rates will not need to rise where an employer is already paying well above the new minimum wage, employers paying at, or close to, minimum award wages should ensure that they have reviewed their award coverage and whether the changes affect their pay rates.
The FW Act's high-income threshold has also increased from AU$138,900 to AU$142,000 (HIT). Where an employee is covered by a modern award and an employer provides a written undertaking guaranteeing annual earnings will be on or above the HIT, the modern award terms will not apply. However, these employees remain "covered" by the award and may still access unfair dismissal provisions
Employers should also be aware that unfair dismissal remedies have become more costly. The maximum amount of compensation an employee can recover in successful unfair dismissal proceedings has been increased from AU$69,450 to AU$71,000.
The penalty unit under the Crimes Act 1914 (Cth), on which FW Act civil penalties are based, has also increased as of 1 July 2017 from AU$180 to AU$210. For example, this means the maximum civil penalties that can be imposed for a breach of the adverse action provisions have increased for an individual from AU$10,800 to AU$12,600 and for a company from AU$54,000 to AU$63,000 (which is in addition to any compensation that may be awarded to the individual).
Lastly, the recent landmark decision of the Full Bench of the FWC handed down on 5 July 2017 has determined a casual conversion clause will be included in 85 modern awards that do not currently contain such a provision. While the draft model clause has not yet been finalised, it currently has the following features:
- A qualifying period of 12 calendar months
- During the qualifying period the casual employee must have worked a pattern of hours on an ongoing basis which, without significant adjustment, could continue to be performed full time or part time
- The employer must provide all casual employees with a copy of the clause within the first 12 months after their initial engagement
- A conversion may be refused on the following grounds:
- It would require a significant adjustment to the employee's hours of work to accommodate them full time or part time
- It is known or reasonably foreseeable that their position will cease to exist or the employee's hours will significantly change or be reduced within the next 12 months
- Other reasonable grounds based on facts that are known or reasonably foreseeable.