Fair Work - to those of who you who have been living on Mars for the last six months

On 1 January 2010, the old system of awards that has applied to businesses (for over a century) has been swept away. There are no businesses on the Central Coast who were previously governed by an award (pre 1 January 2010) and who are still governed by that award. Every business on the Central Coast (and indeed throughout the country), whose employees were covered by state or federal awards, are now covered by completely new and different Modern Awards*.

Every employer should take the time to identify which of these new Modern Awards apply to which of their staff. If the employer does not do that and they continue to engage staff as they have previously done, they run a real risk in breaching the award. These breaches could arise even if the employer is paying over and above that award. Such a breach can lead to an order by the Fair Work Ombudsman for a back payment of allowances/loadings/overtime/etc and the possibility of a fine being imposed.

Some commonly applicable new Modern Awards include:
• Clerks – Private Sector Award 2010
For most people working in clerical or administrative capacity in a business – and even some not-for-profits.
• Aged Care Award 2010
• Building and Construction General on-site Award 2010
• Joinery and Building Trades Award 2010
• Manufacturing and associated industries and occupations Award 2010
Covering a wide range of workers involved in manufacturing.
• Commercial Sales Award 2010
For anyone selling to other businesses
• Professional Employees Award 2010
For those working as Engineers, Scientists and Information Technology workers.

These are but a small subsection of awards of the Modern Awards, noting that there are over 100 in all currently, with more on their way.

These awards are not the end of the world. There are generally no significant increases in pay rates generally associated with them (although there are some issues around overtime and penalty rates in some sectors).

Importantly, there are more positions covered by Modern Awards than what were previously covered. People in middle management are now – by and large – covered by Modern Awards in most sectors of the economy.

We reiterate for the purposes of emphasis, even if you are paying someone on a package of $90,000 per year but fail to pay allowances under a Modern Award, you can (in some industries) be required to back pay those allowances. This uncertainty can be resolved where you (as the employer) have implemented the appropriate variation of that arrangement by using an Individual Flexibility Arrangement (a specific tool available under these arrangements).

The good news is, if you get this right now, it is unlikely there will be significant changes to this Award system in the next 5-10 years (regardless of changes of government).

So to summarise:
• None of the old awards which previously applied for the last 100 years to businesses in New South Wales continue to apply to businesses and their the current arrangements with their staff (except on a transitional basis in some industries for some existing employees).
• Familiarise yourself with the appropriate Modern Awards that are applicable to your staff.
• Where your terms and condition of payment of your staff do not cover every allowance, loading, etc under that Modern Award, use an appropriate IFA tool to document those variations, thereby protecting you.
• The Fair Work Ombudsman is going to be more active than ever in enforcing these provisions (as time goes on). It would be disappointing if you get caught out unnecessarily.
• Importantly, seek advice from your Trade Association or from myself to get this right.

*For information on the new Modern Awards go to http://www.airc.gov.au/awardmod/fullbench/awards.htm

By Warwick Ryan, Central Coast Business Lawyers. Phone 4367 4366 or visit www.ccbl.com.au for more information.

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