Australia: Award Modernisation In The Health & Aged Care Sector

Last Updated: 27 August 2008
Article by John Tuck

As part of the transition from Workchoices to a new regulatory framework, the Commonwealth Government has directed the Australian Industrial Relations Commission (Commission) to modernise awards.

Awards will be simplified and dramatically reduced in number during the transition period to 1 January 2010.

These modern awards are to work in conjunction with the proposed 10 National Employment Standards, and are to become part of the safety net for employees earning less than $100,000 from 1 January 2010.

The new framework will apply to employees of 'constitutional corporations'. While this excludes some State public sector employees, the award modernisation process will have a significant impact in the health and aged care sector.

Health and aged care employers need to closely monitor the changes taking place in their awards, including what these instruments are likely to look like after award modernisation and whether their current terms and conditions of employment will comply with the safety net.

The timing of the introduction of the new modern awards in health and aged care remains unclear. On 29 April 2008, Justice Giudice, President of the Commission, issued a draft list of industries that would be given priority in the preparation of draft modern awards. This list included aged care and nursing. However, the final priority list released by the Commission on 20 June 2008 did not include these sectors.

Who Will Be Bound?

Based on what is outlined in the Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008 (Act), an employer will be bound by a modern award in one of two ways. One being where an employer is specifically named as being bound (as was often the case in pre-Work Choices awards). Another is by inclusion in a specific class by reference to a particular industry or particular kinds of work performed by its employees (as was often the case with 'common rule' awards in most States).

The 10 National Employment Standards

The 10 National Employment Standards will represent the minimum entitlements for all employees in the new system.

The proposed National Employment Standards cover the obvious areas such as maximum weekly hours of work, leave entitlements and notice of termination and redundancy pay. But they also include a new Fair Work Information Statement, which endeavours to provide employees with clear and concise information on their rights and entitlements in the workplace.

Also of interest is the fact that modern awards will provide industry relevant detail and build on the National Employment Standards. Modern awards may contain up to a further 10 minimum standards tailored to the industries and occupations to which they apply.

The 'Modernising' Process

To create modern awards, it is expected that the Commission will simplify the 2,000+ awards, excluding enterprise awards, that are currently in the system and reduce this to a number as low as 150.

The award modernisation process has already begun and will be concluded during the transition period up to 1 January 2010.

Under the terms of the recent request from the Government to the Commission, modern awards must:

  • Be simple to understand, easy to apply and reduce the regulatory burden on business.
  • Include 10 minimum award entitlements.
  • Where necessary, include industry specific detail on the 10 National Employment Standards.
  • Provide the basis for a safety net for Australian workers.
  • Not be overly prescriptive nor extend coverage to employees who are in areas that have been traditionally award free (such as managerial or high income employees). This will not preclude the extension of modern award coverage to new industries or occupations where the work performed is of a similar nature to work that has historically been regulated by awards.
  • Include a flexibility clause allowing for individual arrangements enabling an employer and an individual employee to agree on arrangements that meet their needs, but which cannot disadvantage the employee.

What Can Be In A Modern Award ?

The Act addresses the terms that may be included in modern awards. The terms may only provide a fair minimum safety net and will become the new 'allowable matters'. The further 10 minimum award conditions include:

  • Minimum wages, including junior rates and training rates
  • The type of employment such as full-time, part-time, casual employment and shift work, and also allowing terms for flexible working arrangements, particularly for employees with family responsibilities.
  • Arrangements for when work is performed such as hours of work, rostering, rest periods, variations to working hours and notice periods relating to roster changes.
  • Overtime rates and penalty rates.
  • Annualised wage or salary arrangements.
  • Allowances.
  • Leave, leave loadings and arrangements for taking leave.
  • Superannuation.
  • Procedures for consultation, representation and dispute settling.

Phillips Fox has changed its name to DLA Phillips Fox because the firm entered into an exclusive alliance with DLA Piper, one of the largest legal services organisations in the world. We will retain our offices in every major commercial centre in Australia and New Zealand, with no operational change to your relationship with the firm. DLA Phillips Fox can now take your business one step further − by connecting you to a global network of legal experience, talent and knowledge.

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.

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