ARE YOU CONFIDENT WITH DETERMINING AN EMPLOYEE’S MINIMUM ENTITLEMENTS?

29 Sep ARE YOU CONFIDENT WITH DETERMINING AN EMPLOYEE’S MINIMUM ENTITLEMENTS?

Are you Confident with Determining an Employee’s Minimum Entitlements?

Such as the appropriate modern award, rates of pay, penalty rates, allowances, loadings, etc.?

Unfortunately, getting it wrong might lead to breaches of the modern award, contraventions of the Fair Work Act 2009, business and/or individual penalties, underpayments and more.

We know it can be confusing, but the risk isn’t worth it, so let us help you!

Let’s start at the start…

The National Employment Standards (“NES”) are 10 minimum employment entitlements that must be provided to all employees throughout Australia.  A modern award, enterprise agreement, registered agreement or employment contract cannot allow for terms and conditions that are less favourable than the NES.

The Fair Work Ombudsman explains that “a modern award is a document which sets out the minimum terms and conditions of employment on top of the NES”.

If a business has an enterprise agreement or registered agreement that applies to an employee’s position, a modern award will not apply, rather the terms and conditions of the applicable agreement will apply instead.

When determining if a modern award applies, an employer must:

1. consider if an industry award applies to the business; and

2. consider if any of the classifications in the industry award apply to the employee’s position.

If there is no industry award or appropriate classification in the industry award, an employer must:

1. consider if an occupational award applies to the employee’s position; and

2. consider if any of the classifications in the occupational award apply to the employee’s position.

If there is no occupational award or appropriate classification in the occupational award, the employee may be considered “award free”.

“Award free” or “agreement free” means that a modern award, enterprise agreement or registered agreement does not apply to the employee.  Therefore, the employee’s minimum entitlements are set by the NES, the national minimum wage, their employment contract and/or any company specific policies and procedures.

The coverage clause, definition clause and job classifications clause/schedule in an applicable modern award will help to determine if a modern award applies to an industry or occupation.

If a modern award applies, an employer should review the modern award to ensure they comply with the minimum entitlements.

Minimum modern award entitlements may include:

– Allowances | such as clothing and equipment, leading hand, meal, tool, travel, first aid, higher duties, mobile phone, and many more allowances depending on the industry or occupation.

– Casual loading | such as that casual employees are entitled to a casual loading of 25% on top of the classification’s minimum hourly rate instead of paid leave entitlements which are accrued by full-time and part-time employees.

– Annual leave loading | such as that full-time and part-time employees may be entitled to an annual leave loading of 17.5% during a period of annual leave.

– Rostering | such as ensuring the appropriate notice is given to employees of their rostered hours.

– Breaks | such as ensuring the appropriate break or breaks are provided to employees depending on their number of ordinary hours worked each day.

– Consultation | such as with regards to workplace changes having a significant effect on employees.

This is only a brief summary.  Refer to the applicable modern award for further information and minimum entitlements.

An employment contract should be provided to an employee whether their employment is award or agreement covered or award or agreement free.  An employment contract cannot allow for terms and conditions that are less favourable than the minimum entitlements set by the NES, a modern award, enterprise agreement or registered agreement.

Resources

Pay Guides

Did you know that the Fair Work Ombudsman have a web page where you can download the applicable modern award Pay Guide?

The Pay Guide includes minimum hourly rates per classification, casual hourly rates (inclusive of the 25% casual loading), penalties, allowances and more.

Follow the link here to view the Pay Guides.

Modern Awards

Looking for where to find the modern awards?  See the Fair Work Commission’s list of Modern Awards here.

The Fair Work Ombudsman also has a “Find My Award” tool which you may find useful – click here.

Contact the team at HR Business Assist for further information or assistance.

Phone:  1300 138 551 | Email:  info@hrbusinessassist.com.au