Working Today - Industrial Awards

The Federal government's "Workchoices" laws came into effect on March 27th 2006. They are bringing about a fundamental change in the role of industrial Awards.

The laws limit what issues an Award can regulate to only 15 "allowable matters" - see below.
Rates of pay will be removed from Awards after a transitional period of 5 years.
Awards in future will not set minimum pay rates - rather they will be set by the Australian Pay and Classification Scales (APCSs).
Over a period of time, Awards will become safety net mechanisms, with many more employees' wages and conditions regulated by workplace agreements.

During the transitional period (of up to 5 years), an Award is likely to regulate at least some employment conditions of many employees.

Awards are made by the Australian Industrial Relations Commission (AIRC) or state industrial relations tribunal in the relevant state.

A Workplace Agreement can displace some or all Award-based wages and conditions (see link in right column).

1. Whether an AIRC award applies to a particular employee will depend on:

whether the employer is a named respondent to the award, or is a member of an association of employers which is bound by the award, and
whether the scope clause of the award includes the classification or type of work carried out by the employee, and
whether a workplace agreement is in effect which removes the employee from the operation of the Award. This could be either a collective certified agreement, or an individual Australian Workplace Agreement (AWA).

2. Since the Federal Government's "Workchoices" laws began on 27/3/06, state Awards can only apply to unincorporated employers (in essence, where the employer is not a company).

However, complex transitional provisions mean that employees who were formerly employed under a state award will be likely to maintain the wages and conditions in that Award for some time.

A state Award can apply by "common rule" within a state (ie each employer or employer association does not have to be named). As with AIRC Awards, the scope clause will determine if an employee's work is covered or not.

AIRC Awards can only be "common rule" in ACT and NT. This extended to Victoria from 2005.

3. Different employees in the one workplace may be working under different state and AIRC Awards. Award coverage of jobs can be patchy in some industries, particularly for employees in management or near the top of the skills ladder.

4. In Victoria, common rule awards apply to most employees, whether the employer is a company or not. Victorian employees whose work is outside the scope of any Award are covered by Industry Sector Minimum Wage Orders.

5. AIRC awards are limited to 15 broad "allowable matters", as follows (Section 513 of the Act):

(a) ordinary time hours of work and the time within which they are performed, rest breaks, notice periods and variations to working hours;

(b) incentive‑based payments and bonuses;

(d) ceremonial leave;

(e) leave for the purpose of seeking other employment after the giving of a notice of termination by an employer to an employee;

(f) observance of days declared by or under a law of a State or Territory to be observed generally within that State or Territory, or a region of that State or Territory, as public holidays by employees who work in that State, Territory or region, and entitlements of employees to payment in respect of those days;

(g) days to be substituted for, or a procedure for substituting, days referred to in paragraph (f);

(h) monetary allowances for:

(i) expenses incurred in the course of employment; or

(ii) responsibilities or skills that are not taken into account in rates of pay for employees; or

(iii) disabilities associated with the performance of particular tasks or work in particular conditions or locations;

(i) loadings for working overtime or for shift work;

(j) penalty rates;

(k) redundancy pay, within the meaning of subsection (4);

(l) stand‑down provisions;

(m) dispute settling procedures, but only as provided by section 514;

(n) type of employment, such as full‑time employment, casual employment, regular part‑time employment and shift work;

(o) conditions for outworkers, but only to the extent necessary to ensure that their overall conditions of employment are fair and reasonable in comparison with the conditions of employment specified in a relevant award or awards for employees who perform the same kind of work at an employer’s business or commercial premises.

Certain matters are specifically set out as non-allowable (Section 515 of the Act):

(a) rights of an organisation of employers or employees to participate in, or represent an employer or employee in, the whole or part of a dispute settling procedure, unless the organisation is the representative of the employer’s or employee’s choice;

(b) conversion from casual employment to another type of employment;

(d) prohibitions (whether direct or indirect) on an employer employing employees in a particular type of employment;

(e) the maximum or minimum hours of work for regular part‑time employees;

(f) restrictions on the range or duration of training arrangements;

(g) restrictions on the engagement of independent contractors and requirements relating to the conditions of their engagement;

(h) restrictions on the engagement of labour hire workers, and requirements relating to the conditions of their engagement, imposed on an entity or person for whom the labour hire worker performs work under a contract with a labour hire agency;

(i) union picnic days;

(j) tallies in the meat industry;

(k) dispute resolution training leave;

(l) trade union training leave.

State Awards can cover a wider range of matters, but only apply to unincorporated employers.