Awards

What is an Award?
An award sets the minimum pay rates and working conditions for a particular industry. Currently the award system is notoriously complex and confusing.

As a result the Award system is being reformed and rationalized over a 3 year period under WorkChoices, in an effort to abolish state awards and to replace them with new national awards.

A special taskforce is being established to review the award system and advise the Minister for Workplace Relations on which awards can be merged or rewritten. The Australian Industrial Relations Commissions will be ultimately empowered to create new national awards to replace state awards. Whilst this review is happening, most state awards will continue to operate as preserved awards until a new award has been set.

Moreover, not only are state awards being replaced by national awards, those awards are also being streamlined to ensure that they only include a certain range of matters and are no longer allowed to include those complicated calculations and formulas currently being used in many awards for determining wages and allowances.

Therefore, in effect the following changes are being implemented in relation to awards which will have an effect in relation to your business:

• Basic rates of pay for various awards will no longer be set by the NSW or Australian Industrial Relations Commission, but will rather be set by the Australian Fair Pay Commission. The Commission will set Australian Pay and Classification Scales (APCSs) which will replace these sections of awards.
• As a result the NSWIRC will no longer have any power to set or vary awards.
• However awards will still exist and may govern ancillary issues, such as how many hours someone will work, what types loadings, bonuses, penalty rates, allowances or redundancy pay an employee may be entitled to.
• Matters such as an employers’ right to employ additional contractors, how many hours part-time workers may be required to work, restrictions on how many employees an employer may engage to do a particular task, rights to unfair dismissal etc, can not be included in an award.
• To assuage the fears of those on awards before March 2006 certain entitlements employees were guaranteed under the pre-reform award will continue to apply in relation to those employees, even if a rationalized award does not include these terms. They include rights to annual leave, personal leave, superannuation, parental leave, long service leave to the extent that they are more generous that the Australian Fair Pay and Condition Standard. However, any new employee who is employed under a rationalized award that does not include these conditions will not be able to take advantage of these preserved entitlements.
• New procedures will be created for determining which employees and employers are covered by awards. Under the new system an employer, employee or union will be able to apply to the Australian Industrial Relations Commission to be covered by a relevant award, if negotiations over workplace agreements breakdown and fall into a stalemate.

Please note that if you are currently covered by an award, you will continue to be bound by that award until the reform process is complete and that award has been replaced. You will be contacted by the Australian Industrial Relations Commission if this eventuates.