Do we have to pay modern award wage rates from 01/01/10?

Q&A

Do we have to pay modern award wage rates from 01/01/10?

Existing wage rates in awards and agreements do not align with the rates prescribed in modern awards in many cases; so, what are employers’ obligations in this respect from 1 January 2010 — the commencement date for the modern award system?

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Existing wage rates in awards and agreements do not align with the rates prescribed in modern awards in many cases; so, what are employers’ obligations in this respect from 1 January 2010 — the commencement date for the modern award system?
 
This question was recently posed to WorkplaceInfo.
 
We have been looking at the provision of the modern award that will cover the majority of our employees from 1 January 2010.
 
However, we are particularly concerned about the minimum wage rates prescribed in the modern award.
 
Some wage rates under the modern award are higher than currently provided under the NAPSA, while other wage rates are lower.
 
Is the company required to pay the new higher award wage where applicable from 1 January 2010, and can we absorb any wage increases where the new award wage is lower than the NAPSA rate?
 
In most instances, the company will not need to make any adjustment to minimum wage rates and other specified payments until 1 July 2010.
 
The AIRC has formulated a standard clause relating to transitional provisions, subject to application by a party to a modern award.
 
What transitional provisions cover
 
This schedule will detail a phasing of minimum award wage rates (including wage rates for juniors, training arrangements and employees with a disability) that will commence from the first pay period to commence on or after 1 July 2010, and provide four more instalments each year (expressed as a percentage), ceasing to operate from the first pay period on or after 1 July 2014.
 
The transitional provisions will cover minimum wages (including industry allowance) and loadings and penalty rates (including casual or part-time loading; Saturday, Sunday, public holiday, evening or other penalty; and shift allowance/penalty).
 
The percentage will apply to the difference (either plus or minus) between the modern award wage and the current minimum wage (usually) under the Australian Pay and Classification Scale, ie minimum wage in pre-reform federal award, common rule award or NAPSA.
 
Allowances
 
The phasing arrangements do not apply to work-related allowances (except industry allowance) or reimbursement allowances.
 
What if no transitional provisions schedule?
 
If a modern award does not provide a transitional provisions schedule the wage rates and classification structure, casual or part-time loading, and penalty rates and shift allowances will, at this stage, commence on and from 1 January 2010.
 
In some industries (such as building and construction) the major parties have already indicated to the AIRC that no phasing provisions are required.
 
Source: Paul Munro, IR Consultant.
 
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