Sole traders and partnerships must prepare for 1 January
For private sector businesses that are not constitutional corporations, for example sole traders, partnerships with natural persons, trusts where the trustee is a natural person and some incorporated associations, 1 January 2011 will mean the commencement of Modern Awards.
When these businesses were referred to the Federal workplace relations system on 1 January 2010 through the South Australian Government’s referral of the private sector, their State Awards were preserved until 31 December 2010 as a Division 2B State Award.
This means for private sector businesses referred to the Federal workplace relations system, their Division 2B State Award will be replaced by a Modern Award on 1 January 2011.
Businesses need to be aware that coverage of their Division 2B State Award may not correspond with the coverage of a Modern Award, and the implementation of Modern Awards will not simply be a process of swapping one award with a Modern Award. Identifying which Modern Awards will apply to a particular business will be determined by the operational characteristics of the business.
Modern Awards may have an impact on businesses in relation to labour costs, human resources, payroll and administration functions. The cost impact of Modern Awards differ depending on the industry in which the business operates. However, generally the commencement of Modern Awards results in new minimum wages, classifications, hours of work and penalties and overtime provisions.
To assist businesses in transitioning to their Modern Awards, Business SA will be distributing an online Award Service Analysis later in the year to businesses covered by Division 2B State Awards, asking businesses a few questions on their business operations to determine which Modern Awards will apply.
However, it is strongly recommended that businesses start planning for the commencement of Modern Awards on 1 January 2011 now, by assessing their previous arrangements and compare this with the terms of the relevant Modern Awards to identify what impact the new awards have on their business. Payroll systems, human resources and administration functions may have to be updated due to the reclassifying of staff, as well as reviewing and amending contracts to reflect new wage rates, penalty rates, allowances and classification structure on 1 January 2011.
Business SA is also offering Modern Award training sessions that provide a comprehensive overview of the Modern Award system, including industry and occupational coverage, part-time employees and overtime, casual conversion and award-flexibility. Attending these sessions will provide businesses currently covered by a Division 2B Award with a good understanding of the Modern Award system and assist them in implementing the necessary changes required from 1 January 2011.
Further, to assist businesses in familiarising themselves with their relevant Modern Award, Business SA offers a member only Modern Award Advisory Service, which provides the opportunity to meet one-on-one with a highly experienced Business Advisor who will guide you through the complexities of the new award system and assist you with your questions at a fixed fee. Complementing our existing Award Service and Telephone Advisory Service, this Modern Award Advisory Service will provide your business with the essential information to help the transition into the new award system be as simple as possible.
With two options of the service available, you can choose between learning more about key components of the specific Modern Award that covers your employees or have an in-depth discussion on how a specific Modern Award will impact on your individual business.
Private sectors businesses that are constitutional corporations, for example, proprietary limited companies, have been covered by Modern Awards since 1 January 2010 and should also, if they have not already done so, reclassify their employees and review and amend their employment contracts to reflect new wage rates, penalty rates, allowances and classification structures.
For further information, contact the Business Advisory Centre on (08) 8300 0101.