Cutting through the Fair

Darren Emery Modern awards consist of more than 122 legally enforceable industrial instruments, made under the Fair Work Act 2009. Since January 1, 2010 modern awards have applied to all private sector employers, in most jurisdictions, where those employers are not bound by another enforceable industrial instrument (such as, an enterprise agreement, workplace determination, or transitional instrument).

Only a limited class of private sector employers operating exclusively within WA (such as partnerships, sole traders, and some private sector not for profit companies), are excluded from reach of the Act. Employees not caught under the Act as high income earners (with guaranteed annual earnings above the indexed high income threshold), or bound by another industrial instrument, will be covered by a modern award most applicable to their industry or industry specific work classifications.

Two years on, however, many smaller employers, and employees, are still in the dark as to their rights and obligations under the National Employment Standards (NES) and more particularly modern awards.

Employers should be aware that the NES and modern awards operate by force of law, outside of their employee contracts. Employers may also need to observe more than one modern award depending on the scope of employee classifications applicable to their own workplace. The existence of multiple sources of statutory rights and obligations arising from the NES and modern awards will invalidate inconsistent contractual terms. They may also expose employers (and in the case of companies; their directors as well), to hefty penalties under the Act for non-compliance with statutory employer obligations.

Employers should also consider whether the terms of a modern award are properly excluded from their employee contracts. If not, employers may find themselves in breach of their contract (where a breach would not otherwise have occurred), and exposed to a range of statutory remedies (in addition to contractual remedies), not otherwise available to an employee suing in breach of the employment contract. Employers should be aware that some modern awards may also provide for long service leave entitlements which are better than those entitlements currently preserved under state legislation. Many modern awards also provide for extended termination notice periods, and caps on reasonable working hours, than otherwise provided for under the NES.

Astute Legal Solicitors & Barristers, a Sydney-based firm, consults with employers to determine what awards apply to their workplace. Our practitioners also prepare employment contracts to comply with the Fair Work Act, andany applicable industrial instrument. Alternatively, our practitioners can also assist employers in negotiating and drafting enterprise agreements for their workplace.

Employees who are not senior managers or have guaranteed annual earnings (excluding superannuation, bonuses and penalty rates) of less than $118,100 a year (the current high income threshold), should ask their employer for a copy of the modern award applying to their industry and employment classification, if a copy is not readily available on the employers noticeboard or intranet.

Modern awards provide employees with a safety net of entitlements. As such employees should ensure they are receiving the minimum amount of remuneration applicable to their classification, including all loadings, as well as all their other entitlements. If employed under a contract, employees should ensure their guaranteed earnings will exceed their award entitlements, taking into account their work hours and patterns (including shifts, where applicable), and forgone loadings. Employees should also ensure their minimum award and NES entitlements are included in the contract.

Employees should also pursue from their employer all of their rightful entitlements. Cost effective mechanisms are available for recovery of employee entitlements. Even in instances of employer insolvency, company directors arenot absolved from their duties owed to their former employees under the Act. Alternatively, the GEERS scheme may also be available to compensate employees for lost entitlements, following their former employer's financial collapse.

Our practitioners act for both employers and employees, and can provide frank and timely advice on any employment law issue.

Astute Legal Solicitors and Barristers

Ph: (02) 9871 0166

* Darren Emery is Principal, Astute Legal Solicitors & Barristers.

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