Issues arising from award modernisation

by HCA11 May 2009

With the AIRC’s Award Modernisation Process well under way, further issues of concern are beginning to crystallise for employers. Those issues include the narrow time frame for em ployers to prepare, uncertainty surrounding transitional rates of pay and the significant creep in award coverage.

Modern awards can contain state-based differences for up to five years. This will allow for the inclusion of transitional pay rates in awards where large differences exist between the various states and territories.

Transitional rates of pay have not yet been included. The AIRC has indicated that these will be finalised later in the year. Further, the final stage of the Award Modernisation Process is not due for completion until Decem ber. Accordingly, many employers will have only a few months – some less than one month – to prepare for the impact of the modern awards commencing on 1 January 2010.

A number of the modern awards made thus far contain coverage provisions that capture a far greater number of employees than are caught by the current award system.

For example, the Banking, Finance and In surance Award 2010 extends coverage to employees in senior middle managerial roles. The classifications within it cover most man agers, possibly with the exception of those who directly report to the CEO.

Furthermore, managers who have previously fallen outside the unfair dismissal jurisdiction will become eligible to make an unfair dismissal application if the manager is captured by a modern award.

HR tips: In preparation for the introduction of the modern awards, employers should:

1. Determine the new award(s) relevant to their business, carefully review the provisions of those awards and then ensure they meet their obligations from 1 January 2010. These are gradually being released by the AIRC. Forty-four awards have been re leased to date in various industries. The bal ance of the awards will be released on 4 September and 4 December.

2. Ascertain where current conditions fall short of the modern award(s) and prepare to cor rect those by 1 January 2010.

3. Consider whether any of their employees fall within exemption provisions if the award has one.

4. If there is no exemption provision, or it is in sufficient, utilise flexibility agreements.

5. If uncertain, seek advice.

By Tim Capelin, managing partner, and Adam Moulton, lawyer, Australian Business Lawyers. Tel: 02 9458 7497 or 02 9458 7345.