Modern awards

Modern awards, together with the National Employment Standards (NES), provide a minimum safety net of terms and conditions for national system employees. There are 122 industry and occupation modern awards operating across Australia.

As at 30 June 2016, there were also 21 modern awards covering specific enterprises or state public sector bodies that are part of the national workplace relations system.

4 yearly review

The Fair Work Act requires the Commission to review all modern awards four years after they commenced operating, which was on 1 January 2010. The first 4 yearly review of modern awards (the Review) began in February 2014 and is expected to conclude during the second half of 2017.

Performance

The Review is a significant and complex body of work. During 2015–16 the Commission:

  • held 180 mentions, hearings and conferences
  • issued 20 decisions and 58 statements
  • posted 5,353 documents to its website
  • sent 657 emails to subscribers
  • had 5,365 registered subscribers to its My awards–all matters service at 30 June 2016

The Commission is reviewing individual awards in four groups in the Award stage of the Review process. It is also reviewing common issues that apply across multiple, if not all, awards in the Common issues stage. It dealt with jurisdictional issues in the Review's initial stage.

Throughout the Review, the Commission has welcomed and encouraged input from those with an interest in and knowledge of how award provisions are applied in the workplace. In dealing with submissions, the Commission must balance the need for a stable award system against the need to address the difficulties that some employees and employers, particularly small businesses, have when trying to interpret provisions.

Award stage

The Commission made significant progress in 2015–16 in reviewing the more than 90 awards in Groups 1, 2 and 3. It also issued two decisions on a range of technical and drafting issues3, which will flow on across all four modern award groups.

The Commission develops and publishes exposure drafts for each modern award as part of the Award stage, and in 2015–16 it added 51 exposure drafts to the 49 it published the previous year. These documents are updated and republished as issues are dealt with and agreed between those with an interest in the award. The exposure drafts will continue to be refined throughout 2016–17 as the common issues are determined and outstanding issues resolved.

Plain language pilot

In line with its commitment to make modern awards more accessible, in particular to small business and individuals, the Commission conducted a pilot, which involved creating a plain language draft of the Pharmacy Industry Award 2010.

Plain language drafting expert, Eamonn Moran PSM QC, prepared the draft, which was informed by Commission research. The draft was then refined based on feedback from industrial parties and user testing. The Commission also prepared plain language drafting guidelines as part of the process. It published a report on the pilot in April 2016.

In May 2016, the Commission proposed preparing plain language drafts of award-specific clauses in a number of other modern awards, starting with the Clerks – Private Sector Award 2010, General Retail Industry Award 2010, Hospitality Industry (General) Award 2010, and Restaurant Industry Award 2010. It selected these awards based on the high levels of award reliance in the industry or occupations they cover, particularly among small businesses.

The Commission will also apply plain language drafting principles to new award provisions developed as part of the Review.

Common issues stage

The matters the Commission has identified as common issues across modern awards are:

The Commission issued a number of significant decisions on common issues in 2015–16. These included:

Award flexibility – Time off instead of payment for overtime (2015) FWCFB 4466 and (2016) FWCFB 2602

These two decisions increased the number of awards that provide the option for employees to take time off instead of receiving payment for overtime. In drafting the model term, the Full Bench ensured sufficient safeguards were in place to protect employees from being pressured into taking time off rather than being paid for overtime worked.

Accident make-up pay (2015) FWCFB 3523

The Full Bench determined it was appropriate to retain accident pay provisions in a modified form in a number of modern awards. These provisions provide a level of income protection for injured workers no matter where they might live or which workers' compensation scheme might apply to them.

Family and domestic violence common issue – family friendly work arrangements common issue – preliminary and jurisdictional issues (2015) FWCFB 5585

A Full Bench considering an application by the Australian Council of Trade Unions (ACTU) to insert provisions in relation to the family and domestic violence common issue and family friendly work arrangements in all modern awards determined that it was appropriate that the amended claims proceed to final hearing.

Annual leave

In June 2015, the Commission issued a decision that granted employees an entitlement to cash out part of their accrued annual leave and varied terms relating to taking annual leave in advance and dealing with excessive leave accruals. The Full Bench also considered an application by employer parties to vary modern awards that required the employer to pay an employee for annual leave prior to the employee taking leave. The Full Bench decided that it was appropriate to insert a model term that contemplates payment for annual leave in the usual pay cycle whilst an employee is on paid annual leave. During the reporting period, the Commission consulted with interested parties and finalised the model terms to be inserted into most modern awards to effect these changes.4

Casual & part-time employment

As part of the Review there have been a number of applications to the Commission to vary the entitlements of casual and part-time employees, including to minimum engagement periods, rostering arrangements, overtime and the conversion of casual employees to permanent employment. Hearings commenced in March 2016 and will continue through the remainder of 2016.

Penalty rates

A Full Bench is dealing with applications to vary certain penalty rates in a range of hospitality and retail awards, as part of the Review process. The awards are the: Hospitality Industry (General) Award 2010, Registered and Licensed Clubs Award 2010, Restaurant Industry Award 2010, Fast Food Industry Award 2010, General Retail Industry Award 2010, Hair and Beauty Industry Award 2010 and Pharmacy Industry Award 2010.

During the year, the Commission heard evidence from more than 130 witnesses who appeared either in person or from regional Australia via video link. More than 300 witness statements were given by a broad range of interested parties, including employees, unions, employers and employer organisations, as well as academics with expertise in economics and workplace relations.

During 2015–16 the Commission also received 6,167 submissions, including 5,980 contributions from members of the public. Of the 656 emails it sent subscribers during the year, 216 related to the penalty rates matter.

Enterprise instruments

Enterprise instruments are former federal or state awards that covered employees in a single enterprise or a group of related enterprises. On 31 December 2013, all these instruments terminated unless an application was made to modernise them. The Commission estimated there were 1,735 enterprise instruments still operating at the termination date.

The Commission received 141 applications to modernise enterprise instruments and at 30 June 2016, 12 were yet to be determined. During the reporting period, the Commission made 10 modern enterprise awards and approved applications to modernise a further seven, with their terms still to be finalised. The Commission is dealing with a number of applications to modernise instruments operating in the Australian public sector together, with a view to making one modern award to cover a number of Commonwealth entities.

State reference public sector transitional awards

State reference public sector transitional awards applied to public sector employees in Victoria and some local government employees in Tasmania. The Fair Work Act requires the Commission to modernise them if no application was made to terminate or modernise them by 31 December 2013.

The Commission made three state reference public sector modern awards during the reporting period, and was close to finalising a further twelve.

Keep reading the annual report

Major application types: Industrial actionOperational performance: New ApproachesOperational performance: Setting the minimum wageOperational performance: Modern awardsOperational performance: Regulating registered organisationsOperational performance: Appeals