Moving unincorporated businesses to modern awards

Analysis

Moving unincorporated businesses to modern awards

Employer associations such as the NSW Business Chamber are assisting unincorporated businesses to phase-in modern awards.

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Employer associations such as the NSW Business Chamber are assisting unincorporated businesses to phase-in modern awards.
 
On 1 January 2010, the state governments in South Australia, Queensland, New South Wales and Tasmania referred the remainder of their private sectors into the national Fair Work industrial relations system. As a result, employers that were not ‘constitutional corporations’ came under the federal Fair Work Act 2009. State industrial relations legislation no longer applies to these employers and, except for the modern award system, the federal legislation system applies.
 
For many of these recently referred employers, modern awards will start on 1 January 2011.
 
[This article is an edited version of writings prepared by Dick Grozier, director of Industrial Relations, Australian Business Industrial (NSW Business Chamber).]
 
The NSW Business Chamber has sought information from its small business members to assist in the phasing-in process:
‘NSW Business Chamber seeks information about how to best phase-in the operation of modern awards.
 
Award coverage of non-constitutional corporations
 
(a) State awards
 
During 2010 the terms and conditions of state awards continue to apply. These continued state award conditions are called “Division 2B state awards”. Except where they prescribe competency-based wages for, or what tools must be supplied to, employees under training arrangements, Division 2B state awards will cease to operate on 31 December 2010.
 
On 1 January 2011 modern awards will cover these employees. The Division 2B state award training provisions will continue past December 2010. [In Queensland Division 2B state award provisions applying to the Green Army and Community Job Plan will also continue past December 2010.]
 
(b) Federal awards
 
Where a federal award covered a non-constitutional corporation (a transitional award) it ceased to operate on 1 January 2010 and was replaced by a relevant modern award. The phasing-in provisions of the modern award also apply to these non-constitutional corporations.
 
(c) Award-free employees
 
Employees who were not covered by either a state award or a federal award remain award-free if they are not covered by any modern award.  Even so, like all other employees in the federal system, the National Employment Standards apply.
 
What does NSW Business Chamber need to know?
 
The making of modern awards is not supposed to cause losses to employees or impose additional costs on employers. Phasing-in becomes important where there is a significant difference (in classification rate, penalty or loading) between the Division 2B state award and the modern award. 
 
Recently referred employers should determine which modern award(s) will cover their operations and compare:
  1. employees’ classification rates
  2. relevant penalties and loadings
  3. identified superannuation funds
under the modern award against the current Division 2B state award.
 
(a) Rates, locality allowances
 
NSW Business Chamber needs to know if the modern award discontinues a district allowance which you currently pay or provides a significantly different rate for any of your employees.
  1. what is the allowance; does not paying it reduce employee’s overall take home pay under the modern award?
  2. what classification(s) have significantly different rates?
  3. do you have employees covered by a Division 2B state award who do not seem to be covered by the relevant modern award?
(b) Superannuation
 
The superannuation choice legislation requires employers to give employees a standard choice form which identifies the fund (default fund) into which the employer will make contributions of the employee does not choose a fund. Does the modern award allow you to keep using your current default fund?
 
If there is a significant difference in the modern award’s classification rates, penalties or loading, or the modern award would require you to alter your default superannuation fund please advise the [Chamber].
 
Where to find out about modern awards and Division 2B state awards
 
Recently many modern awards have been varied. On-line consolidated versions of modern awards are coming available on the FWA website.
 
From 1 May 2010, FWA … posted its view of which Division 2B state awards are replaced by each modern award. This can be found on the FWA webpage.’
 
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