Australia: Workplace Relations Update: Fair Work Wage Review and Modern Awards

Last Updated: 4 June 2010
Article by Meryl Remedios and Michael Cooper


  • Fair Work Australia's 2010 annual wage review
  • Guidance on the transitional arrangements in modern awards

Fair Work Australia's 2010 annual wage review

On 3 June 2010, the Minimum Wage Panel of Fair Work Australia handed down its inaugural annual wage review determination, awarding an increase of $26.00 per week to the rates of pay for employees covered by modern awards and Division 2B enterprise awards. Importantly, the Minimum Wage Panel did not increase the rates of pay for employees covered by Division 2B State awards. In respect of all other employees (who are not junior employees, trainee employees or employees with a disability), it set a national minimum wage order of $569.90 per week. It has also set a special national minimum wage for employees with disability and set a casual loading of 21%.

The process of this annual wage review was described in our March 2010 update here.

The conduct of the annual wage review

The Fair Work Act 2009 (Cth) requires Fair Work Australia to conduct an annual wage review each financial year and to make a national minimum wage order. Fair Work Australia performs its function by reviewing modern award minimum wages as well as making a national minimum wage order for award-free employees each year (who are not junior employees, trainee employees or employees with a disability). Any increases to rates of pay as a result of the annual wage review are payable from the first full pay period to commence on or after 1 July of that year, unless there are exceptional circumstances justifying the increases coming into operation on a later date. Our January 2009 update (click here) provided an outline of the role of Fair Work Australia in determining minimum wages.

The 2010 annual wage review decision

Fair Work Australia has:

  • reviewed modern award wages and decided to increase minimum weekly wages contained in modern awards by $26.00, with proportionate increases in hourly minimum wages (69 cents per hour based on a 38 hour week) and annual salaries. This increase also applies to transitional instruments, including Division 2B enterprise awards
  • set a national minimum wage order, being a rate of pay for employees without coverage of awards or agreements (who are not junior employees, employees to whom training arrangements apply or employees with disability) at $569.90 per week or $15.00 per hour
  • set two special national minimum wages for employees without coverage of awards or agreements with disability:
    • for employees whose productivity isn't affected, a minimum wage of $569.90 per week or $15.00 per hour based on a 38 hour week
    • for employees with a disability whose productivity is affected, an assessment under the Supported Wage System
  • declined to vary minimum wages, casual loadings or piece rates in Division 2B State awards as they will be the subject of a separate exercise by Fair Work Australia when it will terminate the Division 2B State awards on 31 December 2010
  • maintained the casual loading for employees covered by modern awards at 25% and set a casual loading for employees without coverage of awards or agreement of 21%, with a view to increasing the loading in instalments until it is bought into line with the standard casual loading in modern awards by 2014
  • deferred until the 2010-2011 annual wage review setting a special national minimum wage for junior employees and employees without coverage of awards or agreements to whom training arrangements apply.

Fair Work Australia has determined that the increases as a result of the 2010 annual wage review will be payable from the first full pay period to commence on or after 1 July 2010, there being no 'exceptional circumstances' warranting a delay and that increased costs to employers as a result of the introduction of modern awards had already been taken into account with the transitional provisions contained within modern awards.

In making its decision, Fair Work Australia took into account a variety of factors including the performance of Australia's economy, which was better than other developed economies over the period of the GFC; the relative stability of inflation; and the increase in employment and aggregate hours. Since the decision of the Australian Fair Pay Commission in July 2008, productivity, prices and real earnings have grown but minimum wages have not. Fair Work Australia concluded that a significant increase in minimum wages was warranted and the state of the economy was such that the increase would not threaten business viability, employment growth or add to inflation.

Implications for employers

Employers should start preparing now to implement the increase to minimum rates of pay as a result of the annual wage review. Employers will also need to consider how the increases to rates of pay impact on, and are impacted by, the transitional arrangements contained in modern awards.

If you have any questions or would like further information about the 2010 annual wage review decision and its impact to your business, please contact a member of Gadens Lawyers' workplace relations team.

By Meryl Remedios of Gadens Lawyers, Sydney

Guidance on the transitional arrangements in modern awards

On 31 May 2010, the Fair Work Ombudsman released a guidance note in relation to the transitional arrangements contained within modern awards that deal with phasing in of pay-related entitlements over four years from 1 July 2010. The guidance note has been published to provide the community with an understanding of how the Fair Work Ombudsman has interpreted and will apply the transitional provisions contained within modern awards, which is relevant to its role in providing education, assistance and advice to employers and employees, and ensuring compliance with, and enforcing the terms of, the Fair Work Act 2009 (Cth) (FW Act) and modern awards.

What are the transitional provisions?

As we have previously outlined (click here), the Australian Industrial Relations Commission has included, in all modern awards, detailed procedures to transition employees from the industrial instruments that used to apply to them, to the new modern awards. This is mainly due to the fact that there were such different terms and conditions of employment applying around Australia to employees who are now covered by a single modern award.

The transitional provisions have been included in modern awards in an attempt to cushion the impact of the new terms and conditions of employment provided for by the modern awards, and they deal with:

  • minimum wages and piecework rates (including for junior employees)
  • casual or part-time loadings
  • Saturday, Sunday, public holiday, evening or other penalties
  • shift allowances / penalties.

Why a guidance note?

The guidance note has been provided to give a clearer understanding of how to implement the transitional provisions contained in the modern awards. The guidance note is based on the Fair Work Ombudsman's interpretation of the transitional provisions and what the likely application of these provisions will be. While in some circumstances the transitional provisions are quite easy to implement (such as where you are transitioning from a casual loading of 20% to 25%), others can be quite complicated (such as, for example, when you have to transition from an additional flat dollar payment for working a night shift, to a night loading of 25%).

The guidance note also:

  • deals with matters such as take-home pay orders and over-award payments
  • gives further clarification of the Fair Work Ombudsman's views as to the impact of the transitional provisions in modern awards on less clear areas, such as:
    • the impact on overtime
    • the impact of a payment in lieu of annual leave for casual employees (which was mainly relevant in New South Wales, and some other federal awards).

A copy of the guidance note that has been released by the Fair Work Ombudsman is available from the Fair Work Ombudsman's website (, or is available here.

Implications for employers

There is no doubt that the transitional provisions in modern awards are very complicated, however the Fair Work Ombudsman's guidance note should provide some assistance in implementing those provisions. Employers should be aware, however, that the guidance note can be varied or revoked at any time, and complying with the guidance note will not necessarily protect you from a prosecution in which it is alleged that you have breached a modern award.

If you would like assistance with implementing the transitional provisions in a modern award that applies to your business, please contact a member of Gadens Lawyers' workplace relations team.

By Michael Cooper of Gadens Lawyers, Sydney

For more information, please contact:


Kathryn Dent

t (02) 9931 4715


Mark Sant

t (02) 9931 4744


Jane Seymour

t (02) 9931 4909


The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.