Contract of Employment

After several cases of significant underpayments recently being identified by Fair Work Australia, requiring employers to back pay the relevant employees, employers are reminded to ensure that they have correctly classified all their employees and are paying the correct wages, penalty rates and allowances.

Changed pay conditions were introduced with the new Modern Awards from 1 January 2010; however, most awards provide provisions for certain pay changes to be phased in from the 1 July 2010 over a five year period to minimise the direct cost impact of the new award system to businesses. 

The conditions and the time frames in which these changes can be phased in may differ between Modern Awards. Employers may also have the option to phase in the relevant pay conditions or automatically pay the full rates from 1 July 2010, provided that the Modern Award rates are higher.

Furthermore, Fair Work Australia handed down its 2010 annual wage review, which provides an increase of $26.00 per week to all Modern Awards, Single-Enterprise Awards (other than Division 2B Single-Enterprise Awards) and transitional instruments, effective from the first full pay period commencing on or after 1 July 2010.

Employers need to consider the new pay conditions introduced by the Modern Awards over the two effective dates, as well as the annual wage increase, to ensure their employees are receiving the correct wages.

For employers that were transferred into the Federal workplace relations system on 1 January 2010 and are covered by Division 2B State Awards, the minimum wages remain unchanged until such awards are replaced by Modern Awards on 1 January 2011. Therefore, employees covered by Division 2B State Awards will not be affected by the above wage increases.

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 of $569.90 or $15.00 per hour from 1 July 2010.

Business SA offers a number of services to help ensure businesses understand and are complying with the obligations and the legal requirements of the Modern Award system, including:

  • providing subscribers to the Award Service with their relevant wage rates and associated penalties and allowances;
  • conducting information sessions on Modern Awards, the National Employment Standards and  Modern Award Transitional Provisions; and
  • offering employers with one-on-one sessions with our Business Advisers, to allow in-depth discussion about how specific Modern Awards impact upon their business.

Business SA also has available a Fair Work Booklet that provides practical advice and information to assist businesses in managing their rights and responsibilities under the Federal Fair Work Act 2009.

For more information, call us on 08 8300 0101.

Adelaide Office

Level 1
136 Greenhill Road Unley
South Australia 5061

P 08 8300 0000
F 08 8300 0001



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