When the 4-yearly review of modern awards began in 2014, a number of unions made claims that the Fair Work Commission should amend the modern awards to improve the conditions of Australian workers in traditionally insecure roles.
Earlier this year, the Commission made a decision affecting the terms, conditions and entitlements of part-time and casual employees covered by 12 modern awards. Over the past few months, the Commission has taken submissions from employer and employee representative groups and has now released a further decision reflecting the proposed changes to each of those awards.
The changes take effect from 1 January 2018. These changes, which are outlined below, are in addition to the proposed changes to casual conversion provisions and minimum hours of engagement (which we discussed in our earlier article).
Overtime for Casual Employees in Modern Awards
The overtime provisions in a number of modern awards have been varied to establish that casual employees be paid overtime penalty rates. The Commission saw no reason why casual employees should not have the benefit of overtime penalty rates like full time and part time employees.
Furthermore, the Commission found that the requirement to pay overtime penalty rates to casual employees should not result in the imposition of a significant cost burden upon employers. This is because it is uncommon for casual employees in the affected industries to work full time hours.
Casual employees will now receive overtime rates for each hour of work in excess of the ordinary hours in a day or a week, and in some cases outside the span of ordinary hours.
The overtime rate will not compound upon the casual loading (that is, the overtime rates for casual employees will be applied to the base rates, not the casual loaded rate).
These changes, which are slightly different in each industry, will affect employers covered by the following modern awards:
- Fast Food Award 2010
- General Retail Industry Award 2010
- Hair and Beauty Industry Award 2010
- Hospitality Industry (General) Award 2010
- Registered and Licensed Clubs Award 2010
- Restaurant Industry Award 2010
Part-Time Employment Changes in Modern Awards
The Commission has also varied the part-time provisions in some awards to permit greater employer flexibility in rostering of working hours. It acknowledged the existing provisions do not bear upon or connect with the circumstances of the industries affected.
Part time employees will now have “guaranteed hours” which are the number of hours of work they will be provided and paid each week or per roster cycle. Part time employees will also need to provide the employer with their hours of availability on commencement and employers have the flexibility to roster employees during those periods.
Where a part-time employee has regularly worked in excess of their guaranteed hours for more than 12 months, they will have the right to request that their guaranteed hours be increased. Employers can only refuse such a request on reasonable business grounds.
These changes will affect employers covered by the following modern awards:
- Hospitality Industry (General) Award 2010
- Registered and Licensed Clubs Award 2010
- Restaurant Industry Award 2010
Other Changes in Modern Awards
Other minor but notable amendments will be introduced to two of the selected modern awards.
In the Pastoral Award 2010, the minimum engagement for junior employees who are school students has been reduced to 2 hours per shift.
In the Social, Community, Home Care and Disability Services Industry Award 2010, the part time provisions have been varied to clarify that the agreed hours for a part-time employee do not have to be the same for each week.
What Happens Next?
The changes come into effect at the start of the first full pay period for affected employees after 1 January 2018. Therefore, employers will need to start preparing for the changes this week, prior to the Christmas break.
While fortunately the timing of the decision means that there won’t be increased costs over Christmas, employers should carefully review their rosters and rostering practices in the New Year to account for the new entitlements.
