Due to the introduction of Modern Awards, employees that have previously been award-free may now be award covered.
This is a result of some Modern Awards providing coverage for some traditionally award-free employees, for example IT professionals, retail store managers and a number of health professionals.
However, it may still be the case where employees remain award-free under the new Modern Award system.
Award-free employees who have transferred to the Federal workplace relations system as a result of the South Australian Government referring its industrial relations powers to the Federal Government may also be covered by the new Modern Awards.
An award-free employee is an employee that performs work that extends beyond the classification structure in any award. That is, determining if an employee is award-free is not based on the title of their position or their rates of pay but the responsibilities, tasks and nature of the work they perform compared to those listed in the awards.
Regardless of whether an employee is award covered or not, if the employee is under the Federal workplace relations system, they are entitled to receive the minimum conditions of employment under the National Employment Standards (NES).
However, award-free employees who are covered by the NES have greater flexibility under such conditions, in particular, the option to cash out annual leave or agree to extra annual leave or person/carer’s leave by giving up an equivalent amount of pay.
To determine if your employee is still award-free or is now covered by a Modern Award you will need to review the new Modern Awards and associated classification structures that cover your business. If the majority of work, tasks and responsibilities that the employee performs are included in the classification structure of an award, the employee will then be covered by that award.
All employment contracts, regardless if the employee is award covered or not, will need to be reviewed in line with the new workplace relations laws.
In the case where an award-free employee is now covered by a Modern Award, any applicable employment contract must be reviewed and updated to reflect the employee’s new employment conditions, including the award that will apply to them, their classification and details of the award wages and/or benefits.
For award-free employees who have transferred to the Federal workplace relations system and still remain award-free, they must be paid at least the national minimum wage, or if the State minimum wage is higher, the State minimum wage will apply until the national minimum wage is greater. However, if an increase is made to the State minimum wage from 1 January 2010, this increase will not apply to award-free employees.
For assistance in relation to whether your employees are covered by an award or are award-free, call the Business Advisory Centre on 8300 0101.