The Fair Work Commission (FWC) recently approved a proposal to make changes to the Restaurant Industry Award 2020 (Restaurant Award) from 11 August 2021.
The changes include a more simplified classification structure, the introduction of a new all-purposes “substitute” allowance in substitution for certain work and expense related allowances, and an “exemption rate” to be paid to senior or specialised roles (instead of them receiving overtime and penalty rates) to be paid for all work for the first 57 hours per week.
The objective of the changes is to simplify the process of paying restaurant staff, and to provide greater flexibility, in view of the many highly publicised and widespread wage underpayments that have been seen across the industry in recent years.
The changes came into effect on 11 August 2021 for an initial period of 12 months, until 10 August 2022. There will be a review of the operation of the Restaurant Award changes after 9 months.
Prior to initiating any of the changes referred to below, employers will be obliged to consult with their employees affected by the proposed changes and their representatives (if any).
A summary of the changes is set out below.
- Simplified classification structure
The Restaurant Award now includes a simplified classification structure, which can be used instead of the existing classification structure. There are now three general purpose Restaurant/Café Worker grades and three Chef grades. The duties for an introductory level employee remain unchanged. An employer can elect to apply all relevant employees in the workplace to the new simplified classification structure.
- Substitute allowance
A “Substitute Allowance” has been introduced for certain work and expense related allowances.
The Substitute Allowance will displace otherwise applicable allowances relating to meal breaks (if a break is not taken), meal, split shift, tool and equipment, special clothing and distance work allowances. The Substitute Allowance ranges between $0.90 and $1.60 per hour depending on the employee’s classification.
An agreement to pay the substitute allowance can be made between an employer and an individual employee, or 75% of employees (if for a workplace). The agreement can be terminated on written notice on certain conditions.
- ‘Exemption rates’
The changes include “Exemption Rates” which apply to full time employees at levels 5 and 6 of the Restaurant Award. It enables the employer and employee to reach agreement in writing to be paid for each hour worked at the rate of 170% of their ordinary hourly rate. This rate is paid for the first 57 hours each week and overtime rates beyond that.
The Exemption Rate agreement can be entered into with individual employees and is instead of an employee receiving certain entitlements such as penalty rates, overtime rates (except where there is less than an 8 hour break between shifts), meal breaks (specifically, penalties if breaks are not taken) and allowances.
Exemption Rate agreements do not apply to employees at levels 1 to 4, nor to part-time employees. The agreements also do not apply to the administrative or general stream under the Restaurant Award.