Rebekah Fryer - Solicitor
The Federal Government's recent amendments to the Workplace Relations Act introduce the concept of Award modernisation. Workplace Relations Minister, Ms Julia Gillard, has said that Award modernisation will involve drafting new Awards "from scratch" rather than "dragging old awards kicking and screaming into the 21st century". The Government claims that Award modernisation will involve creating new and updated awards, rather than superficially simplifying old Awards or preserving existing rules and structures for the sake of preserving them. Ms Gillard has stressed that modern Awards need to provide a flexible safety net that meet more contemporary needs.
What is a Modern Award?
The aim of the Government's Award modernisation process is to create a comprehensive set of modern Awards that are relevant and contemporary to meet the needs of today's society. Modern Awards will be created primarily along industry lines but, if appropriate, could be created along occupational lines. Where it is convenient and appropriate to do so, industries will be grouped together in one modern Award. Several industries may also be covered by one Award.
The Government says that the creation of modern Awards is not intended to extend Award coverage beyond those classes of employees already covered by Awards. For example, managerial employees or high income employees are not intended to be covered by modern Awards. Modern Awards should also not disadvantage employees or increase costs for employers.
The Workplace Relations Act provides that a modern Award must:
1. be simple to understand and easy to apply;
2. reduce the regulatory burden on businesses;
3. provide a minimum safety net of terms and conditions of employment for employees;
4. be economically sustainable and promote flexible modern work practices; and
5. result in a certain, stable and sustainable modern Award system for Australia.
Terms of a Modern Award
The Government has specified 10 matters that may be included in a modern Award. They are:
1. Minimum wages;
2. Type of employment;
3. Hours of work, rest breaks, rostering and notice periods;
4. Overtime rates;
5. Penalty rates;
6. Annualised wage or salary arrangements;
7. Allowances;
8. Leave and leave loading;
9. Superannuation; and
10. Procedures for consultation, representation and dispute settlement.
The Modernisation Process
The Federal Government has given the Australian Industrial Relations Commission (AIRC) responsibility for modernising all Federal Awards and many State Awards operating in the Federal workplace relations arena as NAPSAs (Notional Agreements preserving State Awards).
The AIRC has consulted with employer and union groups to determine the best process to be followed in creating a modern Award. It will continue to consult with interested parties throughout the modernisation process. Ms Gillard has said that the Government will meet with as many people as possible, talk for as long as it is necessary and sort out any unintended consequences in order to achieve the goal of Award modernisation.
The AIRC has developed, from its consultation with employer and union groups, a draft list of 19 industries that it considers should be dealt with as a matter of priority in the modernisation process. The list includes the aged care (excluding nursing), clerical, retail and coal industries. The list will be finalised after further consultation by the AIRC with interested parties across Australia in the next two weeks.
Once this consultation is complete, the AIRC will finalise the priority industries and set a timetable for the modernisation of particular Awards. At the moment it is expected that drafts of modernised Awards in priority industries will be completed by September. Interested parties will have an opportunity to make submissions in relation to the draft modern Awards. It is hoped that the modern Awards in the priority industries will be completed by 31 December 2008. All other Awards are to be modernised by 31 December 2009.
Implications for Employers
Most businesses, but particularly small and medium businesses which are more reliant on Awards than larger organisations, will face a change to their business practices because of the Award modernisation process.
It is a matter of 'wait and see' at the moment as to whether modern Awards will be completed within the anticipated timeframes and if they will be simple to understand, easy to comply with and not increase costs to employers. We will keep you updated as the Award modernisation process continues.
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