Allowable award matters

The Fair Work Act sets out terms which may be included in modern awards, as well as terms which must be included. It also sets out terms which are must not be included in a modern award. Although the concept of non-allowable award matters no longer exists from 1 January 2010, most of the non-allowable matters from the Workplace Relations Act are not prescribed in modern awards in any case.

The Fair Work Act sets out terms which may be included in modern awards, as well as terms which must be included. It also sets out terms which must not be included in a modern award.
Employment Topics A-Z  on WorkplaceInfo contains detailed information on awards provisions and related matters.
Back to pre-WorkChoices
A number of employment conditions are enforceable under modern awards that were not allowed under the previous WorkChoices legislation. The intention of WorkChoices, in not allowing various matters in awards, was to make these terms the subject of bargaining between an employer and its employees.
The Fair Work Act however, returned to a pre-WorkChoices environment whereby awards provide a broad set of employment conditions for the workers which are covered by them.
From 1 January 2010, in most instances, modern awards re-introduced many terms and conditions that applied under federal and state awards prior to the introduction of WorkChoices on 27 March 2006. These terms and conditions are to be read in conjunction with the National Employment Standards (NES).
Terms which may be included in modern awards
A modern award may include terms about any of the following matters (s.139) :
“(a)  minimum wages (including wage rates for junior employees, employees with a disability and employees to whom training arrangements apply), and:
(i)  skill‑based classifications and career structures; and
(ii)  incentive‑based payments, piece rates and bonuses;
(b)  type of employment, such as full-time employment, casual employment, regular part‑time employment and shift work, and the facilitation of flexible working arrangements, particularly for employees with family responsibilities;
(c)  arrangements for when work is performed, including hours of work, rostering, notice periods, rest breaks and variations to working hours;
(d)  overtime rates;
(e)  penalty rates, including for any of the following: 
(i)  employees working unsocial, irregular or unpredictable hours;
(ii)  employees working on weekends or public holidays;
(iii)  shift workers;
(f)  annualised wage arrangements that:
(i)  have regard to the patterns of work in an occupation, industry or enterprise; and
(ii)  provide an alternative to the separate payment of wages and other monetary entitlements; and
(iii)  include appropriate safeguards to ensure that individual employees are not disadvantaged;
(g)  allowances, including for any of the following:
(i)  expenses incurred in the course of employment;
(ii)  responsibilities or skills that are not taken into account in rates of pay;
(iii)  disabilities associated with the performance of particular tasks or work in particular conditions or locations;
(h)  leave, leave loadings and arrangements for taking leave;
(i)  superannuation;
(j)  procedures for consultation, representation and dispute settlement."
Any allowance included in a modern award must be separately and clearly identified in the award.
Section 140 also provides that modern awards may cover outworkers and their conditions, as well as the terms that cover outsourcing of work to an outworker entity.
Terms which must be included in modern awards
Modern awards must include coverage terms (ie who is covered by the award). Different coverage terms are set out for modern enterprise awards, State reference public sector modern awards and all other modern awards.
Modern award must also include:
  • flexibility terms
  • terms about settling disputes
  • terms specifying, or providing for the determination of, the ordinary hours of work for each classification of employee covered by the award and each type of employment permitted by the award
  • base and full rates of pay for pieceworkers, if these workers are defined or described in the award
  • terms providing for the automatic variation of allowances when wage rates in the award are varied, if a modern award includes allowances of the kind that FWA considers should be varied in this way. (ss143-149)

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Terms which must not be included in modern awards
Modern awards must not include terms that:
  • are objectionable (these cover ‘workplace rights’, ‘industrial activities’ and ‘sham arrangements’)
  • require or permit the payment of a bargaining services fee
  • allow unreasonable payments and deductions for benefit of the employer
  • allow unreasonable requirements to spend an amount
  • require or authorise an official of an organisation to enter premises to hold discussions with, or interview, an employee, or to inspect any work, process or object
  • discriminate against an employee on the basis of race, religion, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, political opinion, national extraction or social origin, unless of the inherent requirements of the job or an institution conducted in accordance with the doctrines, tenets, beliefs or teachings of a particular religion or creed
  • are state-based, unless included in the modern award process (but only for up to five years)
  • deal with long service leave (as the relevant state or territory legislation generally applies).

Non-allowable matters in previous legislation

Although the concept of non-allowable award matters no longer exists from 1 January 2010, most of the non-allowable matters provided under the Workplace Relations Act 1996 are not prescribed in modern awards in any case. 

Previous non-allowable matters that have already been determined by the Australian Industrial Relations Commission (AIRC) include ‘conversion from casual employment to another type of employment’, ‘maximum or minimum hours of work for regular part-time employees’, and ‘dispute resolution training leave’. These matters became enforceable under modern awards from 1 January 2010.

Sample documentation

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