06 Mar PROPOSED CHANGES TO THE MISCELLANEOUS AWARD MAY EXTEND AWARD COVERAGE
As part of the four yearly review of modern awards, the Fair Work Commission Full Bench has reviewed the coverage provisions of the Miscellaneous Award 2010 (“Award”). This is significant because employees previously not covered by the Award, may now fall within the coverage of the Award if these proposed changes come into effect.
Specifically, the Full Bench has provisionally concluded as a result of this review that the inclusion of clauses 4.2 and 4.3 in the coverage terms of the Award results in the Award not achieving the modern awards objective in s134(1) of the Fair Work Act 2009 (Cth) (“FW Act”) which is to ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions, taking into account a number of specific considerations. The Full Bench has suggested the Award should be varied to address this.
Clauses 4.2 and 4.3
Clauses 4.2 and 4.3 currently state:
“4.2 The award does not cover those classes of employees who, because of the nature or seniority of their role, have not traditionally been covered by awards including managerial employees and professional employees such as accountants and finance, marketing, legal, human resources, public relations and information technology specialists.”
“4.3 The award does not cover employees:
– in an industry covered by a modern award who are not within a classification in that modern award; or
– in a class exempted by a modern award from its operation,
– or employers in relation to those employees.”
Why do they not meet the modern awards objective?
The Full Bench took into account required considerations in s134(1) of the FW Act in reaching its provisional conclusion, including that:
1. the effect of clause 4.3 is that it excludes low-paid employees which does not meet the needs of the low-paid;
2. to the extent that clause 4.3 excludes employees from being covered by the Award who would otherwise be covered, the Full Bench did not consider it promotes flexible work practices and the effective and productive performance of work;
3. as clause 4.3 excludes employees who would be covered by the Award, it means such employees do not have any entitlement to additional remuneration for “overtime, unsocial, irregular or unpredictable hours, weekends, public holidays or shifts”; and
4. clauses 4.2 and 4.3 are not “simple or easy to understand”.
The Full Bench also acknowledged that while including employees previously excluded by clause 4.3 within the coverage of the Award would increase employment costs and the regulatory burden for some employers, this is in a context where the Award only provides for “basic conditions” of employment and this is “unlikely to be significant”.
The Full Bench has put forward a provisional view that clause 4 of the Award should be varied to delete clause 4.3 and vary clause 4.2 as follows:
“4.2 The award does not cover managerial employees and professional employees such as accountants and finance, marketing, legal, human resources, public relations and information technology specialists”.
Time for response
The Full Bench has allowed interested parties the opportunity to provide any evidence or submissions in response to the provisional conclusions expressed in the decision. The final submissions, at this stage, look as though they will be filed by the Housing Industry Association Ltd after the granting of an extension of time until close of business Friday 13 March 2020. We would hope to see a final conclusion expressed shortly after this date.
What this will mean if the provisional conclusions become final
If the provisional decision of the Full Bench becomes final, then this will mean that employees which employers thought the Award did not apply to (for example, because their employee was in an industry covered by a modern award who is not within a classification in that modern award (and therefore excluded by clause 4.3(a)) and not covered by an applicable occupational award) may now be covered by the Award.
For example, if you are in the hair and beauty industry and covered by the Hair and Beauty Industry Award 2010 and you have a cleaner, then that cleaner who does not fall within a classification in that modern award, may now be covered by the Award.
This is a significant change for employers because having an award apply to those employees means that there are additional regulatory obligations owed to those employees, for example consultation obligations (see clauses 8 and 8A of the Award), additional remuneration for overtime, weekends etc.
Now is the time to consider conducting an audit to ensure that you have applied to correct modern award/s to your employees and that your employees are appropriately classified. It is important to be aware of these potential changes to ensure that, if they do come into effect, you are prepared and can take action to avoid any risk of non-compliance with your legal obligations.
If you would like the HR Law team to conduct an audit for your business, please get in touch. The team can also assist you with implementing changes if your employees who were previously award free, will now be covered by the Award. This may include implementing new employment contracts for those employees which set out award coverage and which comply with the terms of the Award.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.