Modern awards have covered the majority of Australian workplaces
since 1 January 2010. Many of you will recall that the
implementation of the modern award system resulted in changes to
the minimum terms and conditions for many employees. In order to
provide employers and employees with time to adjust to these
changes, most modern awards prescribed a set of transitional
arrangements. Those arrangements essentially specify when
particular parts of the modern award come into effect. Importantly,
all of those transitional arrangements will cease to
operate from the beginning of the first full pay period on or after
1 July 2014. What this means is that all parts of the
modern award applicable to you will have come into full effect by
Effectively, the transitional arrangements in modern awards
phased in any difference between the modern award rate and the rate
that applied prior to the commencement of the modern award, over a
four year period. The sorts of employee entitlements that have been
phased in (and by the beginning of the first full pay period on or
after 1 July 2014 will have been fully phased in) are:
minimum wage rates (including piecework rates and industry
casual or part time loadings;
Saturday, Sunday, public holiday, evening or other penalties;
What does this mean for you?
If you pay employees sufficiently in excess of award rates (that
is, if you pay them enough that even when the rates are fully
transitioned they are earning at least the amount of the fully
transitioned rate), the cessation of the transitional arrangements
will have very little effect on you and your workplace. If you are
not sure whether you pay sufficiently in excess of award rates, you
can ask us to check, or you can check for yourself using the Fair Work
Ombudsman's Pay Check Plus tool.
If you pay employees strictly in accordance with the modern
award rates, you should start reviewing (probably now) what changes
you need to make so that employees are receiving entitlements equal
to, or in excess of, the minimum award rates on the first full pay
period after 1 July 2014. Keep in mind also that the minimum wage
rates in the modern awards will increase from the first pay period
on or after 1 July 2014 pursuant to the annual wage review.
If you do not prepare for the changes and, as a result,
employees do not receive their full entitlements, the Fair Work
Ombudsman can become involved. This could result in mediation,
investigation, enforcement and/or prosecution - all things which we
know you would like to avoid.
If you need some help reviewing your employees' wages and
entitlements in time for the changes - to ensure compliance and to
avoid the risks associated with non-compliance - we can of course
(and would be very pleased to) assist you.
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.Madgwicks is a member
of Meritas, one of the world's largest law firm
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