Four-yearly review of modern awards – time to trim the fat?

Savvy employers are taking advantage of a rare chance to review and amend employee entitlements that can be ‘anachronistic’ and see them overpaying.

Employers and industry are busy utilising a current review of modern award entitlements to press for much-needed changes to the rights of employees.
The Fair Work Act 2009 regime requires the Fair Work Commission to undertake a review of modern award entitlements every four years, and the current review is in progress, with many decisions to be handed down in 2015.
Lawyers representing their clients’ interests in the Fair Work Commission say that the award review is dominating their employment practices, as smart employers try to make the most efficient use of their human resources.
“The most critical thing impacting our clients at the moment is the four-yearly review of modern awards, rather than any legislative changes,” Harmers Workplace Lawyers chairman Michael Harmer said.
Most employers have employees covered by a Federal Award, and according to Harmer, employers had been a times surprised by discovering ‘anachronistic’ awards that had left them overpaying their workers ‘dramatically’.
“We had one major corporate client that discovered that the industry allowance of 3% per annum that it still pays has not been reviewed by any tribunal in 40 years, despite the fact that that industry had of course gone ahead leaps and bounds in terms of improving conditions for workers,” Harmer told delegates at a recently held client seminar. “So it is through sheer anachronism and sheer lack of investigation paying an additional 3% per annum across it’s entire workforce for disabilities that starkly no longer exist,” he said.
Harmer said industries that had shifted in nature considerably over a number of decades risked overpaying for things such as industry allowances.
In August, the Fair Work Commission successfully defended its May decision to cut penalty rates for casual workers in the restaurant and catering industry.
The Court upheld that penalty rate entitlements could be reduced on Sundays upon application from 75% to 50%, in a decision with important ramifications for the ongoing modern award review process and other service industries.
Michael Harmer says the decision in May has spawned “quite a number of challenges” to penalty rates in various industries, and said “the time was nigh” for employers who wished for their current arrangements to be reviewed.

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