Award modernisation – transitional arrangements

This information sheet looks at the transitional arrangements for modern awards.

Background

Since the middle of 2008, the Australian Industrial Relations Commission (AIRC) has been modernising some 1,700 federal awards and NAPSAs and consolidating them into a few hundred industry awards.

Some of the modern awards affecting the building industry and HIA members include:

• Building and construction general on-site award
• Joinery and Building trades award
• Modern manufacturing award
• Modern Timber award
• Premixed Concrete award
• Cement and Lime award
• Concrete Products award

While award modernisation was not intended to increase costs for employers or disadvantage employees, given the complexity of the process it became apparent that this was unrealistic.

In an attempt to cushion the impact of award modernisation on employers and employees on 2 September 2009, the AIRC released a major decision on the transitional provisions. These transitional provisions will mean that the introduction of new wages will be deferred until mid 2010.

Operation of the modern award – WAGE RATES DELAYED UNTIL JULY 2010

Most aspects of the modern award, such as classifications and hours of work commence on 1 January 2010

However, from 1 July 2010 the following matters affecting pay will be phased in:

• minimum wages, including wages for junior employees, employees to whom training arrangements apply and employees with a disability (Minimum wage is defined to include any applicable industry allowances)
• casual and part-time loadings
• Saturday, Sunday, public holiday, evening and other penalties, and
• shift allowances for shift workers.

There will be 12 months between instalments and each instalment will be 20%, which will spread the impact of changes over almost the whole of the five-year period. The phase in arrangements apply to both increases and decreases.

Table – Model phasing arrangements

Please see attachment A for a worked example of the arrangements.

The model transitional provisions do notapply to most allowances – such travel or tool allowances. Starting 1 January 2010 allowances will need to be paid as per the modern award.

Take Home Pay Orders

Separate from the transitional provisions, employees can also apply to Fair Work Australia for Take Home Pay Orders if the move to a modern award means they suffer a reduction in their take home pay.

There is no equivalent right for employers to apply to Fair Work Australia.

More information

Although the changes do not begin until 2010, we encourage members who directly employ labour to seek expert advice and assistance from HIA’s Workplace Services team.

For the latest updates and other information please call your Workplace adviser on 1300 650 620.

_{DISCLAIMER – the above is intended to provide general information in summary form. The contents do not constitute specific adive and should not be relied upon as such. Formal specific advice should be sought by members with respect to particular matters before taking action.}