Monday, 23 November 2020

Important changes and clarification for how overtime is calculated for casuals under Modern Awards

As part of its 4-yearly review of Modern Awards, the Full Bench of the Fair Work Commission (FWC) has made a number of changes, including to re-word clauses or insert new clauses, in a number of Modern Awards to clarify how overtime is calculated for casual employees.

These changes come into operation from the first full pay period on or after 20 November 2020 for almost all impacted awards.

The exception is the Aged Care Award 2010 where these changes only come into operation from 1 March 2021, as a result of the disproportionate effects the COVID-19 pandemic on the aged care sector.

What are the changes?

Following an extensive public consultation and consideration process, the FWC has outlined a variety of changes to wording of a number Modern Awards to clarify when overtime applies for casual employees, and the method of calculating overtime rates for casual employees.

Most importantly, numerous Awards have been amended to provide clearer wording in relation to whether a compounding, cumulative or substitution approach to calculating overtime rates for casual employees applies to the particular Award.

Based on the FWC’s decision, we set out which approach applies to each impacted Award below.

  1. Awards where overtime penalty rates are payable in substitution for the casual loading (substitution approach).

To see the list of impacted Awards in this category, click here.

  • Airport Employees Award 2020
  • Aluminium Industry Award 2020
  • Ambulance and Patient Transport Industry Award 2020
  • Amusement, Events and Recreation Award 2020
  • Architects Award 2020
  • Cotton Ginning Award 2020
  • Corrections and Detention (Private Sector) Award 2020
  • Dredging Industry Award 2020
  • Electrical Power Industry Award 2020
  • Fitness Industry Award 2010
  • Higher Education Industry – General Staff – Award 2020
  • Local Government Industry Award 2020
  • Market and Social Research Award 2020
  • Meat Industry Award 2020
  • Miscellaneous Award 2020
  • Pharmaceutical Industry Award 2010
  • Poultry Processing Award 2020
  • Sporting Organisations Award 2020
  • Travelling Shows Award 2020
  • Water Industry Award 2020

2.   Awards where the casual loading and the overtime penalty rates are added separately to the minimum hourly rate (cumulative approach).

To see the list of impacted Awards in this category, click here.

  • Aboriginal Community Controlled Health Services Award 2020
  • Airline Operations – Ground Staff Award 2020
  • Animal Care and Veterinary Services Award 2020
  • Banking, Finance and Insurance Award 2020
  • Building and Construction General On-site Award 2010
  • Car Parking Award 2020
  • Cement, Lime and Quarrying Award 2020
  • Cemetery Industry Award 2020
  • Children’s Services Award 2010
  • Clerks – Private Sector Award 2020
  • Commercial Sales Award 2020
  • Educational Services (Post-Secondary Education) Award 2020
  • Educational Services (Schools) General Staff Award 2020
  • Fast Food Industry Award 2010
  • Funeral Industry Award 2010
  • Gardening and Landscaping Services Award 2020
  • Gas Industry Award 2020
  • General Retail Industry Award 2020
  • Hair and Beauty Industry Award 2010
  • Hydrocarbons Industry (Upstream) Award 2020
  • Joinery and Building Trades Award 2010
  • Legal Services Award 2020
  • Live Performance Award 2010
  • Mobile Crane Hiring Award 2010
  • Nursery Award 2020
  • Oil Refining and Manufacturing Award 2020
  • Pest Control Industry Award 2020
  • Plumbing and Fire Sprinklers Award 2010
  • Ports, Harbours and Enclosed Water Vessels Award 2020
  • Premixed Concrete Award 2020
  • Racing Clubs Events Award 2010
  • Racing Industry Ground Maintenance Award 2020
  • Real Estate Industry Award 2020
  • Salt Industry Award 2010
  • Silviculture Award 2020
  • Storage Services and Wholesale Award 2020
  • Supported Employment Services Award 2020
  • Textile, Clothing, Footwear and Associated Industry Award 2010
  • Waste Management Award 2020
  • Wine Industry Award 2010
  • Wool Storage, Sampling and Testing Award 2010

3.   Awards where the overtime penalty rates are applied to the casual rate inclusive of the casual loading (compounding approach).

To see the list of impacted awards in this category, click here.

  • Aged Care Award 2010
  • Alpine Resorts Award 2020
  • Asphalt Industry Award 2020
  • Black Coal Mining Industry Award 2010
  • Broadcasting, Recorded Entertainment and Cinemas Award 2010
  • Business Equipment Award 2020
  • Coal Export Terminals Award 2020
  • Concrete Products Award 2020
  • Contract Call Centres Award 2020
  • Electrical, Electronic and Communications Contracting Award 2020
  • Food, Beverage and Tobacco Manufacturing Award 2010
  • Graphic Arts, Printing and Publishing Award 2010
  • Health Professionals and Support Services Award 2020
  • Horse and Greyhound Training Award 2020
  • Labour Market Assistance Industry Award 2020
  • Manufacturing and Associated Industries and Occupations Award 2020
  • Marine Tourism and Charter Vessels Award 2020
  • Marine Towage Award 2020
  • Mining Industry Award 2020
  • Pastoral Award 2010
  • Port Authorities Award 2020
  • Professional Diving Industry (Industrial) Award 2020
  • Professional Diving Industry (Recreational) Award 2020
  • Seafood Processing Award 2020
  • Stevedoring Industry Award 2020
  • Sugar Industry Award 2020
  • Surveying Award 2020
  • Telecommunications Services Award 2010
  • Transport (Cash in Transit) Award 2020

What does this mean for employers?

Employers must check the Award/s which applies to them to ensure they are paying overtime to casual employees correctly. These changes do not impact employees covered by an enterprise agreement unless that enterprise agreement expressly incorporates the terms of the relevant Award.

It is important to note that these changes are not intended to change the way in which overtime applies. Rather, they clarify the application and calculation of overtime for casuals.

If you have not been applying overtime in accordance with the appropriate approach, you may be liable for possible Award contraventions. If you have any concerns that this may apply to your business, we recommend you contact us for assistance.

The FWC’s Schedule of Determinations for each of the impacted Awards can be accessed here.

This article was produced by HR Legal. It is intended to provide general information only in summary format on legal issues. It does not constitute legal advice, and should not be relied on as such.

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