Award-free employees - minimum employment conditions

Analysis

Award-free employees - minimum employment conditions

Employers are often confused as to the minimum entitlements (or otherwise) pertaining to certain employment conditions of employees who traditionally have not been covered by an industrial instrument.

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Employers are often confused as to the minimum entitlements (or otherwise) pertaining to certain employment conditions of employees who traditionally have not been covered by an industrial instrument.

With the introduction of WorkChoices, many employers are unsure as to what employment conditions have been bestowed on this category of employee by the WorkChoices legislation.

Non-industrial instrument employees would typically include management staff, many professionally qualified employees such as salaried lawyers, salaried doctors, qualified accountants, and supervisory-type employees in many industries.

Most commentary has concentrated on the employment conditions relating to those employees covered under a pre-WorkChoices or WorkChoices industrial instrument, mainly because that type of employee constitutes the majority of employees in the private sector and a substantial number of employees in the public sector.

Category of employee - who's award-free?

As mentioned previously, 'traditional' occupations, as well as those in newly created industries, have never been the subject of award or other industrial instrument coverage, although the courts and industrial tribunals have had to determine, from time to time, whether a particular position was indeed 'award-free'.

These occupations remained 'award free' under the previous industrial relations system because the incidence of union membership was low or non-existent, consequently very few industry awards or industrial agreements were created to cover these occupations.

Conditions of employment

Prior to WorkChoices, the minimum employment conditions for these employees were regulated by the relevant State or Territory employment legislation.

These usually covered conditions such as annual leave, long service leave, public holidays and, in some States, additional conditions such as personal carer's leave. Because of the amount of leave usually prescribed under these statutes, the WorkChoices Standard will generally prevail.

Most employees not covered by an industrial instrument prior to WorkChoices would have had many of their conditions of employment determined by the individual contract of employment, in addition to statutory entitlements. However, in most instances, an employer would now be required to apply the minimum entitlements prescribed under the WorkChoices Standard.

WorkChoices impacted on 'award-free' category

State jurisdictions and WorkChoices interaction

Under WorkChoices, an employee not previously covered by an industrial instrument would now be employed under a notional agreement preserving State awards (NAPSA) in those State jurisdictions that previously provided for State awards prior to the introduction of WorkChoices.

This is because certain employment conditions for these employees were previously derived from a State industrial law. The provisions of the NAPSA will only contain those conditions bestowed by State law prior to the introduction of WorkChoices. This situation will continue to apply until the NAPSA is terminated, replaced by a workplace agreement, or it expires after three years as prescribed by the legislation.

The relevant State industrial law is to be compared with the relevant Standard under WorkChoices, with the Standard prevailing if the quantum of leave is equal to or greater than the relevant State industrial law.

In the majority of cases, this means the Standard will usually prevail over the State law. In the absence of an entitlement under a State industrial law, a non-industrial instrument employee will be automatically covered by the relevant condition under the WorkChoices Standard.

Victoria, Northern Territory and Australian Capital Territory

Because the Federal industrial relations system covered these jurisdictions prior to WorkChoices, no NAPSA would apply with respect to these employees as no State award system was in place immediately prior to the introduction of WorkChoices.

A non-industrial instrument employee in these jurisdictions would be subject to the Standard and the other minimum entitlements contained in WorkChoices.

WorkChoices Standard

The following are the minimum entitlements provided by the WorkChoices Standard:

  • a Federal minimum wage (FMW) and casual loadings (which are varied from time to time by the Australian Fair Pay Commission). A non-industrial instrument employee's minimum hourly rate is the FMW, (currently $13.47 per hour, although this will increase to $13.74 per hour operative from first pay period commencing on or after 1 October 2007)
  • maximum 38 ordinary hours per week, plus reasonable additional hours
  • annual leave calculated at the rate of 1/13 of the employee's nominal hours worked over each four week period of continuous service, which equates to four weeks each year for an employee working a 38 hour week
  • personal/carer's leave calculated at the rate of 1/26 of the employee's nominal hours worked over each four week period, which equates to 10 days' per year for an employee working a 38 hour week, with an additional entitlement of two days' paid compassionate leave per occasion, and
  • unpaid parental leave of 52 weeks, which includes maternity, paternity and adoption leave (this condition applies whether or not the employee is covered by WorkChoices)

Other minimum entitlements

The Workplace Relations Act also provides a minimum entitlement on a number of other employment conditions. These are:

  • specified public holiday that fall on a day the employee has guaranteed hours of work, those public holidays being New Year's Day, Australia Day, Good Friday, Easter Monday, Anzac Day, Christmas Day and Boxing Day, and any other day declared as a holiday by a State or Territory, for the State, Territory or locality, including the right of an employee to reasonably refuse a request from the employer to work on a public holiday
  • minimum periods of notice, based on continuous service with the employer, when termination of the employment is made by the employer, and
  • unfair dismissal laws that apply to an 'eligible' employee, ie where the employer employs more than 100 people and the employee has been continuously employed for at least six months
  • an unpaid meal break, with respect to certain employees, of half an hour after five hours of continuous work

With respect to meal breaks, the provision under WorkChoices does not apply to a non-industrial instrument employee covered under a NAPSA. This would be the case in New South Wales, Queensland, South Australia, Western Australia and Tasmania. However, non-industrial instrument employees in Victoria, Northern Territory and Australian Capital Territory (ACT) would be subject to the meal break provision.

State laws that continue to apply

Although WorkChoices overrides most State and Territory industrial laws, other State and Territory laws continue to apply to this category of employee. State and Territory laws related to employment that continue to apply include the following:

  • long service leave
  • the observance of a public holiday, except the rate of payment of an employee for the public holiday
  • occupational health and safety
  • child labour (ie. employees under 18 years of age)
  • anti-discrimination and equal employment opportunity laws
  • superannuation
  • workers compensation
  • the method of payment, and the frequency of payment, of wages
  • deductions from salaries or wages
  • attendance for service on a jury

New employee (existing employer)

An employee employed in New South Wales, Queensland, South Australia, Western Australia or Tasmania after 27 March 2006 is deemed to be employed under a NAPSA for the purposes of WorkChoices, provided the particular duties were being performed in the company prior to the introduction of WorkChoices.

Where the position did not exist prior to this, the employee's employment conditions are subject to the WorkChoices Standard and the other minimum entitlements prescribed by the WRAct.

Similarly, an employee hired in Victoria, Northern Territory or the ACT after 27 March 2006 would have their minimum employment conditions determined by the WorkChoices Standard and the minimum entitlements under the WRAct. Wages would be subject to the Federal minimum wage and the default casual loading (where relevant).

New employer

Where an employer has commenced business after 27 March 2006, and in the absence of a new workplace agreement (collective agreement or AWA), the employment conditions of non-industrial instrument employees are determined by provisions under the WorkChoices Standard, including the Federal minimum wage and a default casual loading of 20%, and the minimum entitlements prescribed in the WRAct. This applies to this category of employee in all States and Territories.

Related

Application of awards to employees 'on staff'


Staff policy entitled employees to allowances and reimbursements
 

 

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