Are overtime provisions part of transitional arrangements?

Q&A

Are overtime provisions part of transitional arrangements?

Based on comments by the AIRC in a September 2009 decision, overtime would not appear to be subject to the phasing-in schedule of the transitional provisions. However, there is still some confusion surrounding the issue.

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Based on comments by the AIRC in a September 2009 decision, overtime would not appear to be subject to the phasing in schedule of the transitional provisions. However, there is still some confusion surrounding the issue.
 
This issue was explored in response to a recent inquiry to WorkplaceInfo.
 
Our employees were previously covered by a NAPSA that provided an overtime penalty on the basis of time and a half for the first two hours and double time thereafter.
 
However, the modern award that now covers our employees (ie the Manufacturing and Associated Industries and Occupations Award 2010) only provides overtime at time and a half for the first three hours and double time thereafter.
 
The transitional provisions of the Award defines loadings and penalty rates to mean: casual or part-time loading; Saturday, Sunday, public holiday, evening or other penalty; shift allowance/penalty.
 
This does not specifically refer to overtime penalty rates as part of the transitional provisions.
 
Can we commence calculating overtime on the first three hours immediately or is it subject to the phasing-in provisions of the transitional provisions clause from 1 July 2010?
 
There appears to be some conjecture on this issue. As stated, overtime is not specifically referred to under the definition of penalty rates for the purposes of the transitional provisions.
 
The Australian Industrial Relations Commission (AIRC) handed down a decision with respect to transitional provisions in modern awards in September 2009
 
Excluded matter
 
In referring to the model phasing schedule, the AIRC excluded matters dealing with the spread of ordinary hours, starting and finishing times, and the number of hours of overtime required to be worked at certain rates, from the transitional provisions of modern awards.
 
The ambiguity would appear to be created by the phrase ‘evening or other penalty’ — overtime is often referred to as a ‘penalty’. 
 
Because of the comments by the AIRC in its decision, overtime would not appear to be subject to the phasing-in schedule of the transitional provisions, meaning in this case, the employer is only required to pay time and a half for the first three hours and double time thereafter for overtime worked on and from the commencement date of the modern award (1 January 2010).
 
As said, there is still some debate surrounding this question.
 
 
 
Source: Paul Munro, IR Consultant.
 
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