The Fair Work Commission has now issued draft determinations for multiple awards that contain
annualised salary clauses, and further timetables for others. Most of the revised clauses will commence
on 1 March 2020. The changes require significant procedural changes for compliance.
In an EMA Note and seminar last year, we alerted employers to new annualised wage provisions to be
inserted into all awards that contain annualised wage provisions. Time is running out for affected
employers to comply with the very significant administrative changes required.
Until now, we have only had access to “model clauses”. On 23 December 2019, the Fair Work
Commission (“FWC”) issued an updated decision and published the actual draft award clause revisions
for each affected award. This new decision and the associated draft determinations allow employers to
review more specifically how their awards will change and what they will be required to do.
Affected employers who do not make these changes for relevant employees will be in breach of the
awards. This is a civil remedy provision that can result in prosecution and penalties of up to $63,000 per
occasion.1 Actions may be brought by employees, unions, or the Fair Work Ombudsman.
The changes for most of the affected awards commence on 1 March 2020. There are some special
cases to be treated differently:
- The FWC decided that the existing award provisions for the managerial hotel classification under
the Hospitality Industry General Award (“HIGA”) will not be changed, but instead will be moved
to another section of that award. Provisions for non-managerial staff under the HIGA will be
changed in line with the previous decisions and model clause.
- The HIGA (for non-managerial staff), the Marine Towage Award and the Restaurant Industry
Award will have some additional provisions inserted to specifically limit the number of penalty bearing
hours that may be included in the annual wage. To allow a short period of review of
those limits by interested parties (until 31 January), these three awards will have a delayed
commencement date to be announced in due course.
- The FWC did not produce a determination for the Health Professionals and Support Services
Award. Instead it invited further submissions on whether the classifications of Health Professional
Levels 1-3 should be included in the annualised wage clause. This means that the operative date
for the final change to that award will be further delayed.
What do you need to do now?
Employers who pay annualised wages or “salaries” to employees in any of the affected awards must
develop a strategy now to allow enough time for consultation and implementation of the significant
changes required to all individual employment contracts, payroll processes, timekeeping and records.
Require further information/assistance?
EMA Consulting is preparing a management guide for awards containing annual wage provisions. We
will inform clients when it is finalised. If you require further information or advice in the meantime, please contact one of our consultants.
1 Fair Work Act2009 (Cth), ss 45 and 539