Background / Significance

Background
The Australian Industrial Relations Commission, now Fair Work Australia, reviewed all pre-reform awards (Federal awards) and notional agreements preserving state awards (NAPSAs), with a view to consolidating and simplifying those instruments by replacing them with industry/occupation-specific modern awards.

Whilst modern awards commenced on 1 January 2010, Fair Work Australia are continually making variations to awards which may have varying degrees of impact on organisations covered.

The outcome of award modernisation is both positive and/or negative on your business and solutions are available to your organisation in response. Because of the wide coverage, modern awards have fundamentally altered the industrial relations platform by creating a totally new safety net against which all employers will be obliged to comply.

Livingstones’ role in the award modernisation process differed in accordance with our client’s needs.  Some clients requested that we make detailed submissions on their behalf, whilst we developed strategies with others to manage the process.

As a brief introduction into award modernisation and the outcomes; we urge you to read further and contact us should you have any questions about the process or the effect (both positive and negative) on your company or organisation.

Significance
Modern awards are the most significant change to industrial relations that Australia has ever experienced. Repercussions of the changes are:

• Modern awards are used as the point of comparison for approving enterprise agreements in relation to the “better off overall test”;
• Modern award conditions will apply to employees on award-derived conditions, including individual flexibility arrangements (subject to state-based differences);
• The rate of pay in workplace agreements must meet or exceed the minimum rate of pay contained and updated within modern awards; and
• Employees traditionally not covered by awards and engaged under a common law contract of employment may become covered by a modern award and be able to make a wage claim or unfair dismissal application (this is particularly the case for lower level management employees\especially in service industries).

Be sure to review your applicable modern award to ensure your employees are correctly paid for there hours of work where new penalties or allowances may apply.