Exemption of some employees from modern awards

Q&A

Exemption of some employees from modern awards

Is the exemption of certain categories of employees from some modern award conditions expected to be a general provision in modern awards, or will it be limited to a particular clerical award?

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Is the exemption of certain categories of employees from some modern award conditions expected to be a general provision in modern awards, or will it be limited to a particular clerical award?
 
This question was recently put to WorkplaceInfo.
 
We have been reviewing some of the modern awards that are expected to apply to our workforce from 1 January 2010.
 
One of these awards — the Clerks Private Sector Award 2010 — appears to contain a provision that exempts certain award clauses from applying to an employee who receives in excess of 15 per cent above the wage rate for the Level 5 classification.
 
This equates to an exemption applying to an employee who’s ordinary weekly rate exceeds $851.00 per week.
 
The Australian Industrial Relations Commission (now Fair Work Australia (FWA)) indicated in its Award Modernisation decision of December 2008 that it will include an ‘exemption’ provision in the Clerks Private Sector Award in line with the NSW NAPSA clause in recognition of the longstanding and widespread use of the concept in federal clerical awards and in NAPSAs.
 
Under the Clerks Private Sector Award, an employee with an ordinary weekly wage in excess of $851.00 per week will be exempt from every clause in the Award — except:
  • Clause 14 — Redundancy
  • Clause 24 — Superannuation
  • Clause 29 — Annual leave
  • Clause 30 — Personal/carer’s leave and compassionate leave
  • Clause 31 — Public holidays
  • Clause 32 — Community service leave.
 
Minister’s comment
 
In an Award Modernisation Request to the AIRC, the Minister for Workplace Relations indicated that the creation of modern awards is not intended to exempt or have the effect of exempting employees who are not high income employees, from modern award coverage or application, unless there is a history of exempting employees from coverage across a wide range of pre-reform awards and NAPSAs in the relevant industry or occupation.
 
This appears to indicate that FWA cannot introduce an exemption clause into a modern award unless there is a historical reason for doing so, such as the case with clerical awards.
 
High income employees
 
It should be noted that an employer will be able to exclude a ‘high income employee’ (earning in excess of $108,300 pa) from modern award coverage by giving an undertaking guaranteeing the employee’s annual earnings. The employee must agree to the undertaking. This will commence operation from the date of commencement of modern awards (1 January 2010).
 
Source: Paul Munro, IR Consultant.
 
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