New Industry Awards: Are You Prepared?

Fair Work Australia (FWA) has announced its first annual wage review under the Fair Work Act, 2009. The decision provides increases to rates of pay in modern Awards and also an increase to the national minimum wage of $26 per week. In accordance with provisions of the Fair Work Act, rates will became operative from the first full pay period on or after 1st July 2010. 

In his column in the latest Australian Amusement, Leisure and Recreation Association (AALARA) e-newsletter, Association President Rob Bradley explained that one of the key points of the new awards was that “minimum wage rates in modern Awards have been increased by $26 per week, with proportionate increases in hourly rates of pay and annual salaries.” 

Bradley’s column also detailed the following:
• Modern award minimum wages for juniors, training employees and employees with a disability
• FWA noted that under most modern Awards, junior employees and employees to whom training arrangements apply receive a percentage of the minimum award rate of pay. The • Minimum Wage Panel decided that these employees should receive the benefit of an increase to minimum rates generally. 
• Employees with a disability in open employment have been awarded an increase to minimum wage rates on a proportionate basis. Employees engaged through Australian • Disability Enterprises (formerly known as 'sheltered workshops') are engaged under the Supported Employment Services Award 2010, which will also be adjusted in accordance with the decision. 
• The Supported Wage System minimum weekly payment (currently $71) will also be increased separately once the weekly income test free threshold is announced by the Australian Government (expected on 1st July). 

Transitional pay scales 
With the commencement of the modern Award system, most employees ceased being covered by Australian Pay and Classification Scales ('pay scales'). Prior to January 2010, employees of constitutional corporations were bound by the relevant NAPSA and associated pay scale. 

While not currently covering many employees, FWA noted that the pay scales do cover employees covered by enterprise award-based transitional instruments. For this reason, the pay scales were deemed to form part of the safety net and therefore varied by $26.00 per week or on a proportionate hourly basis. 

Division 2B State awards 
Organisations in New South Wales, Tasmania, South Australia and Queensland that are not constitutional corporations are covered by Division 2B State awards, those being notional federal instruments in the same terms as the previous state awards covering those employers. Division 2B state awards have a life span of 12 months only and will automatically terminate at the end of this year. 

Employer groups, including AFEI, argued that there should be no increase to Division 2B State awards as typically these employees had received a wage increase in 2009 and therefore contained rates higher than those in the relevant transitional pay scale. FWA decided not to vary the minimum rates in Division 2B State awards. The Minimum Wage Panel observed that the review of Division 2B State awards was part of a separate exercise currently before the tribunal, and it was more appropriate to deal with those instruments in that exercise to avoid any unnecessary complication. 

This means that if your organisation is not a constitutional corporation and is currently covered by a Division 2B State award, there is no increase to the minimum rates in that instrument as a result of this decision. 

Some minimum rates contained in the Division 2B state Awards in NSW (for example, the Award Review Classification Rate) will be lower than the NMW on 1 July 2010 and will therefore need to be adjusted upwards to meet the NMW of $569.90 per week. 

State reference transitional awards 
State reference transitional awards are award-based transitional instruments that existed under the Workplace Relations Act, 1996 and are preserved by the Fair Work (Transitional Provisions and Consequential Amendment) Act. 

FWA decided to vary all State reference transitional awards in accordance with the increase afforded to modern Award minimum wage rates. 

Casual loadings 
FWA decided against varying the casual loading for award covered employees, indicating that the current casual loading of 25% had only recently been adopted by the Full Bench of the Australian Industrial Relations Commission in the Award Modernisation process. 

The minimum casual loading for award/agreement free employees has been varied from 20% (being the default casual loading under the Workplace Relations Act) to 21%. 
FWA signaled an intention to 'phase-up' the award/agreement free casual loading to 25% by 1% each year. This outcome would align the award free casual loading to the casual loading currently prescribed in modern Awards. 

Allowances 
In the modern award system, work related allowances are linked to a percentage of the standard rate in a particular modern Award. Accordingly, the increase to wage rates (including the standard rate in the award) will have a flow on increase to work related allowances. 

In a separate statement last week regarding the adjustment of expense related allowances, FWA noted the standard Adjustment of expense related allowances clause set out in modern Awards. This clause allows for the automatic adjustment of expense related allowances in line with the relevant CPI at the time of any adjustment to the standard rate. 
FWA foreshadowed that most expense-related allowances would be increased by the percentage movement of the applicable CPI between June quarter 2008 and March quarter 2010. 

Modern Award Transitional Provisions 
Unfortunately, the decision did not provide any clarity on the interaction between this increase and the transitional provisions in most modern Awards. While an increase of $26.00 applies to the rate set out in the modern Award, the actual increase received by the employee may vary due to the transitional provisions. 

Modern award wage determinations cover:

MA000092 Alpine Resorts Award 2010 
MA000080 Amusement, Events and Recreation Award 2010 
MA000091 Broadcasting and Recorded Entertainment Award 2010 
MA000070 Cemetery Industry Award 2010 
MA000094 Fitness Industry Award 2010 
MA000101 Gardening and Landscaping Services Award 2010 
MA000028 Horticulture Award 2010 
MA000009 Hospitality Industry (General) Award 2010 
MA000081 Live Performance Award 2010 
MA000112 Local Government Industry Award 2010 
MA000093 Marine Tourism and Charter Vessels Award 2010 
MA000108 Professional Diving Industry (Industrial) Award 2010 
MA000109 Professional Diving Industry (Recreational) Award 2010 
MA000013 Racing Clubs Events Award 2010 
MA000014 Racing Industry Ground Maintenance Award 2010 
MA000082 Sporting Organisations Award 2010 
MA000102 Travelling Shows Award 2010 

Modern award wage determinations can be seen at www.fwa.gov.au/index.cfm?pagename=wagereview2010&page=determination