Wages phased in under new Modern Award system
Modern Awards and the National Employment Standards came into force on 1 January 2010.
While most aspects of Modern Awards, such as conditions of employment, work and expense related allowances and overtime apply from this date, certain pay related matters may be subject to phasing in arrangements to assist with the transition into the new award system.
The majority of Modern Awards have incorporated standard transitional provisions which allow for changes to employees’ classifications, wages, loadings and penalties introduced by the new award system to be phased in from 1 July 2010.
These provisions have been created to minimise the direct cost impact of the new award system for businesses and to gradually phase in any increases to employees’ wages.
Therefore, from 1 January 2010 and up until 30 June 2010, businesses, in most cases, are not affected by any wage changes and will continue to pay the wages and penalties that are included in the relevant NAPSAs and Pre-Reform Federal Awards that employees were previously covered by prior to the commencement of Modern Awards.
The conditions to be phased in and the timeframe for the transition may vary in different Modern Awards, so it is important that businesses refer to each of their relevant Modern Awards separately to ascertain if and how this provision applies to their employees.
It is also important to note that a small number of Modern Awards may contain industry specific transitional provisions which may be different from the standard transitional provisions.
For businesses that are covered by a Modern Award that does not contain standard transitional provisions, the Modern Award, including the rates of pay and other pay related matters, will operate in its entirety from 1 January 2010.
The conditions of Modern Awards that will be allowed to be phased in include:
- classifications and minimum wages (including industry allowances) for adults, juniors, apprentices and trainees, supported wages and piecework rates;
- casual or part-time loadings;
- Saturday, Sunday, public holiday, evening and other penalties; and
- shift allowances and other penalties.
Businesses can choose whether they automatically pay the increased wages, loadings and penalties from 1 July 2010 or phase in the increases over the period as stated in the Modern Award.
However, allowances (e.g. meal and travel allowances), other than industry allowances, must be paid in accordance with the provisions contained in the relevant Modern Awards from 1 January 2010.
Furthermore, due to the period between 1 January 2010 and 30 June 2010 where businesses are covered by the new Modern Awards and their previous awards, businesses will need to retain their previous awards should they need to refer to them in regards to providing the correct wages, loadings and penalties and throughout the phasing in period.
If you would like more information about Modern Awards and the transitional provisions, refer to our information sheet, attend one of the Modern Award and NES information sessions or call the Business Advisory Centre on 8300 0101.