​‘Do I need an employee’s consent to move them on to a different award?’

Analysis

​‘Do I need an employee’s consent to move them on to a different award?’

Award miscalculations are the single largest cause of breaches and resulting fines. How you transition employees between awards can create harmony or heartache.

WantToReadMore

Get unlimited access to all of our content.

Award miscalculations are the single largest cause of breaches and resulting fines. How you transition employees between awards can create harmony or heartache.

Tara was employed to manage your cake shop under the hospitality award but you’ve recently discovered she should be on the retail award. Do you need her consent to switch her over to the new award?
 
The short answer is no, but that doesn’t mean you should proceed full-steam ahead without fully considering the ramifications, according to Joe Murphy, managing director – National Workplace, Australian Business Lawyers & Advisors.
 
“You cannot simply ‘choose’ which award will cover an employee," he says. "They are either covered by a particular award or not by reference to the coverage provisions in the award.
 
“Once you discover you have an employee on the wrong award, work out if there is an underpayment and pay that lump sum as soon as possible, while putting them on the right award at the same time.”
 
If you’ve been overpaying an employee in the past, you may also run into problems, Murphy adds.

It is very difficult to require an employee to pay back a historical overpayment and you may encounter great difficulty if you're seeking to drop their rate of pay.
 
“If you haven’t been diligent in how you engage and contract with employees, you may have to keep paying the higher award rate,” he says. “If a contract erroneously says we will engage you as a ‘level one’ under the hospitality award, and it turns out to be the wrong award, then you could theoretically move them to a different award and drop their pay. However, if you have a contract that says ‘we will pay you $21.33 per hour’, which may have been sourced from an award rate of pay, you’re going to run into problems if you try to pay them less.
 
“You then have to consider whether or not you want to terminate the contract, which can expose the business to risk of an unfair dismissal claim or breach of contract claim, or both."

This article originally appeared on the NSW Business Chamber website. WorkplaceInfo is owned by the chamber.
 
Post details