'Protected award conditions' & WorkChoices legislation

Analysis

'Protected award conditions' & WorkChoices legislation

One of the details recently announced by the Federal Government as part of its WorkChoices reform package, was a reference to the preservation of certain employment conditions currently contained in awards, which, if not negotiated away in an agreement, ie.

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One of the details recently announced by the Federal Government as part of its WorkChoices reform package, was a reference to the preservation of certain employment conditions currently contained in awards, which, if not negotiated away in an agreement, ie. collective agreement or Australian Workplace Agreement (AWA), will continue to automatically apply where an award is applicable to an employee's duties.

These 'protected award conditions' will apply in conjunction with the Fair Pay & Conditions Standard (FP&CS), which will provide minimum statutory entitlements for a minimum wage, annual leave, personal (sick) leave, parental leave and a maximum of 38 ordinary weekly hours of work averaged over one year.

An upcoming article will identify those conditions which regularly appear in awards which are not protected by the proposed legislation.

Protected award conditions

Certain award conditions will continue to apply to employees under an agreement unless explicitly altered or overridden by the agreement. However, any award condition which does not fall within the list of 'protected' conditions would not be enforceable. The award conditions which will be protected are:

  • public holidays (excluding union picnic day);
  • rest breaks;
  • incentive-based payments and bonuses;
  • annual leave loading;
  • allowances; and
  • overtime penalty rates

The common contents of these provisions

While there is no 'standard' provision in awards for each of these particular conditions, there are provisions common to most federal and state awards, which are detailed as follows:

Public holidays: The provision of public holidays without loss of pay is a feature of almost all awards, both federal and state.

The days most commonly prescribed as holidays are:- New Year's Day, Australia Day, Good Friday, Easter Saturday, Easter Monday, Anzac Day, Queen's Birthday, Labour Day, Christmas Day and Boxing Day and, in addition, other day(s) which are proclaimed or gazetted by the relevant state or territory government as a holiday within that jurisdiction, eg. Melbourne Cup Day (Vic), Adelaide Cup Day (SA), Royal National Show Day (Qld), etc.

The date of observance of any of the aforementioned holidays may also vary, subject to proclamation or gazettal by a state/territory government.

Other types of holidays prescribed in awards include an additional award holiday (mainly applicable in NSW) and union picnic day (usually only available to financial members of the union). Union picnic day has been specifically excluded as a protected award condition.

Rest breaks: Rest breaks prescribed in awards usually comprise the following:- unpaid meal or lunch break (day workers), paid crib break (shift workers).

Unpaid meal breaks are usually a minimum of half an hour and a maximum of an hour, to be taken no later than five hours after the employee's normal starting time.

Paid crib break is usually twenty minutes in duration, usually taken in the middle of the shift. Other rest periods prescribed in awards include morning or afternoon paid breaks or smokos, which are usually of ten minutes duration.

Incentive-based payments or bonuses: Some awards provide for a system of incentives which can allow employees to earn in excess of the award wage, usually based on a formula calculating the number of items produced or sales made.

This protected condition would also include commissions and payment by results schemes. These incentive schemes are usually in addition to the relevant minimum award rate of pay.

Annual leave loading: The provision of annual leave loading is a provision contained in the majority of awards. The loading is usually 17 1/2% (25% in some awards) of the award wage or an employee's actual wage.

In addition, there is usually a provision that when proceeding on annual leave a shift worker is entitled to the greater amount of either the annual leave loading or the shift allowance that would have been paid for the duration of the leave, whichever is the greater amount.

The loading is not usually payable on pro rata annual leave pay on termination of employment.

Allowances: It would appear from the government's information that any allowance prescribed by an award is a protected condition. Allowances common to many awards would include:- shift allowance, leading hand allowance, first aid allowance, industry or disability allowance, tool allowance, meal allowance, special rates (eg. hot work, cold work, wet work, etc.) and travelling allowance.

Overtime penalty rates: Most awards specify penalty rates for working hours in excess of the specified daily ordinary hours or span of hours contained in the award. The most common overtime penalty rate in awards is time and a half for the first two (or three) hours and double time thereafter.

This penalty rate usually applies to overtime worked on a Saturday, whist Sunday work usually attracts double time, whilst public holiday work usually is at double time and a half.

Particular award should be checked

In the case of the above award conditions, reference should be made to the relevant award to determine the exact employee entitlement.

The fate of state award conditions

Incorporated businesses

For incorporated businesses, the proposed legislation will deem a state award as a transitional federal agreement, with a 3 year nominal expiry date.

Where the parties wish to retain the conditions of the old state award, the transitional federal agreement (ie. old state award) will move to the most appropriate federal award after the expiry date of the transitional agreement.

Most conditions currently contained in a state award will still apply, except those terms below the FP&CS, and other matters regarded as prohibited content which are not currently enforceable in the federal jurisdiction. It will be the role of the Australian Industrial Relations Commission to determine the appropriate federal award coverage.

Unincorporated businesses

For unincorporated businesses, state awards and state agreements will continue to apply under the respective state industrial relations system.

Related

Federal IR changes 2005

 

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