Spotlight on modern awards compliance

The spotlight is moving, and before too long the focus of the Fair Work regulators will be squarely on modern awards compliance. In this light, companies need to ensure they fully understand their obligations under this new system, and Human Resources Managers need to be up to speed as this issue starts to receive more attention.

In particular, young workers and workers in 'vulnerable industries', like cleaning and hospitality are highly likely to be targeted, with the Fair Work Ombudsman putting pressure on employers to ensure they are doing the right thing by their workers.

Sifting through the confusion
Understanding modern award coverage is critical and there are plenty of examples where employers are incorrectly determining modern award coverage.  If you're getting the modern award coverage wrong, it's difficult to fulfill the minimum conditions of employment.

The real problems come when looking at the transitional provisions included in a number of the modern awards, which can be extremely confusing to deal with.

The transitional wasteland
The transitional provisions have been included to allow enough time for both employers and employees to adjust to changes to pay rates, penalties and loadings. It's important to recognise that not all modern awards contain transitional provisions in the same form, so it's essential for employers to determine correct award coverage and review those provisions.

The transitional provisions within modern awards can be especially challenging for labour hire, especially where there is regular change and short term engagement.  In those situations, it's better for recruiters or human resources personnel to get advice on how to deal with these arrangements in light of the transitional provisions and consider paying the higher of the pre-modern and modern awards to avoid underpayments.

Tips for managing awards

1. Make sure coverage is determined: every modern award is slightly different and need to be read in conjunction with the National Employment Standards.   Don't presume that the award with a similar name to your pre-modern award automatically covers you under the new modern award system.
2. Continue to pay the higher of either the pre-modern award or the modern award
3. Off-set transitional provisions through over-award rates of pay and salaries and the use of a carefully drafted off-set clause in your employment contracts.
4. Apply the better of the pre-modern award and modern award penalty rates to ensure compliance with the transitional provisions.
5. Use online tools to assist with transitional calculations at www.fairwork.gov.au

The temptation to throw up your hands
This is not an area that where employers can throw up their hands and say 'it's too hard'. It's important for employees and industry that we get it right.  Modern awards are here to stay, so it's best to get it right now, or risk being prosecuted for non-compliance later.

About the author

Charles Cameron is director of consulting firm Stratecom, and manager of workplace policy for the Recruitment Consulting Services Association (RCSA)

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