News
Modern awards transitional arrangements
20th May 2010
On 1 January 2010, modern awards began operating. Transitional arrangements in most modern awards mean that rates of pay and certain other conditions do not come into force until 1 July 2010 and may be phased in over time.
What are transitional arrangements?
Modern awards were created to establish one set of minimum conditions for employers and employees across Australia who work in the same industries or occupations.
As modern awards replace about 1700 federal and state-based awards, the impact of the wages and conditions in the modern awards vary between states, industries and employers.
To lessen the financial impact of the new arrangements, most modern awards contain transitional provisions which allow increases and decreases in minimum conditions affecting pay to be progressively phased in.
Modern awards may contain:
- a model phasing schedule that phases in changes to pay rates over 5 annual instalments from 1 July 2010
- specific transitional provisions unique to the modern award and dealing with pay and/or other conditions – see the award for details
- no transitional arrangements at all – the full terms of the modern award apply from 1 January 2010.
If the modern award contains higher wages, the employer may choose to immediately start paying the higher modern award rates for all employees.
What is the model phasing schedule?
Most modern awards contain a model phasing schedule, which allows wages, loadings and penalty rates which are higher or lower than pre-existing conditions to be progressively introduced in 5 annual instalments.
This period gives employers and employees who are affected by modern awards enough time to introduce the changes.
The model phasing schedule may affect:
- minimum wages, including piecework rates
- casual and part-time loadings
- Saturday, Sunday and public holiday penalty rates
- evening and other penalty rates
- shift allowances.
If the modern award contains the model phasing schedule, the provisions are found in a schedule to the award.
The model phasing schedule allows wages, loadings and penalty rates which are higher or lower than pre-existing conditions to be progressively introduced in 5 annual instalments.
Where wages, loadings and penalty rates are affected by the model phasing schedule, the
pre-existing rates continue to apply until the first full pay period on or after 1 July 2010.
The increases and reductions in wages loadings and penalty rates under the model phasing schedule will commence from the first full pay period on or after 1 July 2010.
If I pay my employees more than the award, do I have to increase pay or entitlements again?
Where you previously made over-award payments to an employee, resulting in a rate of pay at least the same as their pay rate entitlements under their modern award and you continue to pay these after 1 January 2010, then your monetary obligations under the modern award are being met.
Modern awards do not require you to maintain or increase any over-award payments to your employees, although reducing their pay may be a breach of their employment contract.
For more information contact the Fair Work Info Line on: 13 13 94
From Fair Work Australia website: www.fairwork.gov.au
