Most Australian employers now fall under the jurisdiction of the Fair Work Act 2009 and must apply the minimum safety net provisions of the National Employment Standards and the applicable Modern Award. With the Fair Work Act 2009 implementation process having reached the the introduction of monetary rate provisions of Modern Awards, it is timely to remind employers of their obligations in a complex but fundamental and necessary area of business management.
The following is a guide for all employers to assess their employment relationships:
Jurisdiction
With the introduction of State referral legislation in New South Wales, Queensland, South Australia and Tasmania the Fair Work Act 2009 applies to most employers. State Government Departments, however, are not National System employers.
Employment classification
Each employer should assess the roles, duties and tasks of each employee's position. This will enable you to select the most appropriate Modern Award. The Fair Work website (www.fairwork.gov.au) provides an ideal starting point for this process. Employers should keep in mind that there is an award for almost all employees with very few excluded. It is also prudent to remember that employees are not necessarily excluded from award coverage when they are paid in excess of the "high income threshold" (currently $113,800 pa).
Minimum conditions
The basic premise is that each employee must receive a minimum of the National Employment Standards (NES) and in most cases the terms of the Modern Award. Even if the employer elects to enter into an enterprise agreement the basic conditions of the NES and the modern award cannot be excluded to the employees detriment.
Award transition
Almost all modern awards include provisions to "transition" employers and employees from their pre-existing entitlements to the modern award system. As an employer you should check the modern awards which cover your employees to determine the scope of the transitional provisions that will be applicable to your business. In general the model clause allows for employees to transition over a four year period commencing on 1 July 2010 and ending on 1 July 2014.
Overpayment award payment absorption
In most cases employers who made overaward payments prior to 1 July 2010 are entitled to absorb the modern award increases into their existing overpayment. This a complex issue and we recommend that any employer seeking to rely on "absorption" seeks legal advice to ensure their arrangements are lawful and to manage their industrial relationships.
Individual flexibility arrangements
All modern awards include flexibility terms that allow employers and employees to reach individual arrangements about specific terms of employment. Such terms can be useful to both the employer and employee. We recommend that employers seek specific advice when using a flexibility arrangement.
Award alternatives
In addition to the flexibility arrangements allowed by modern awards, employers can continue to utilise common law contracts so long as the employee is not excluded from the terms of the modern award and the NES. Employers may also consider enterprise agreements to enhance their flexibility and to best meet their business needs.
Compliance
The Fair Work Ombudsman conducts investigations on behalf of employees and also conducts audits of industry. Fines can be imposed where employers fail to ensure that employees are paid their minimum entitlements. We recommend that all employees regularly audit their employment practices. We can provide assistance to all employers in the implementation of modern awards including the development of audit tools to assist with compliance and also strategy and development of employee management practices.
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.
