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On 3 June 2010, Fair Work Australia (FWA) handed down its first-ever Annual Wage Review Decision. In its comprehensive (98-page) decision, FWA awarded an increase of $26.00 per week to all minimum weekly rates in Modern Awards. The increase will become operative from the first full pay period commencing (ppc) on or after 1 July 2010. Junior rates will increase according to the percentage of the adult rate they are calculated from.

 

Allowances in the Modern Awards will also increase from ppc 1 July 2010 according to the specified formula designated by the relevant award.

 

IMPORTANT NOTE:   Employers subject to a Modern Award who have chosen to utilise the model transitional provisions to phase-in increased rates of pay must remember that this national wage increase applies in addition to any transitional adjustments that would also be operative ppc 1 July 2010.

Award/Agreement Free Employees

The Federal Minimum Wage will subsequently increase to $569.90 per week (or $15.00 per hour).

FWA has also determined that the default casual loading for award/agreement free employees should increase from 20% to 21% from the first full pay period commencing (ppc) on or after 1 July 2010 – FWA indicated an intent in its decision to see the default casual loading transitioned to a standard of 25% over five instalments (resulting in an increase to the casual loading of 1% a year from 1 July each year).

 

Division 2B State Awards

FWA determined that rates of pay in Division 2B State Awards would NOT be increased in accordance with this decision. This means that rates of pay in these types of awards will be frozen until employers subject to these instruments transition to the Modern Awards commencing 1 January 2011.

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A Full Bench of the Federal Court recently made a decision as to whether Bankstown HCCA - a community service organisation - was a trading corporation for the purpose of Federal Industrial Laws.   Please follow this link to read the full decision:

Bankstown Handicapped Children's Centre Association Inc v Hillman [2010] FCAFC 11

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The Fair Work Information Statement (the Statement) has been released by the Fair Work Ombudsman. From 1 January 2010 employers in the national workplace relations system must give each new employee a copy of the Statement before, or as soon as possible after, the employee starts employment. The Statement can be posted, faxed or emailed to the employee. Provision of the Statement is one of the 10 minimum standards in the National Employment Standards (NES). Subscribers can access a full copy of the NES by logging in with your username and password. Clients can also download a copy of the Fair Work Information Statement here.

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The Fair Work Act 2009 commenced on 1 July 2009, ushering in many changes to industrial legislation, including Fair Work Australia (assuming the functions of the Australian Industrial Relations Commission); changes to Unfair Dismissal Laws and Good Faith Bargaining, leading to a ‘One Stop Shop’ of Government Industrial Relations Agencies by early 2010.

 

The implementation of the Fair Work Act 2009 from 1 July was made possible by the passage of the important “Transitional Provisions and Consequential Amendments Bill 2009” which, in effect, transitions the previous industrial system (i.e. WorkChoices) to the new system under the Fair Work Act 2009.

 

The changes to unfair dismissal legislation will potentially have the biggest initial impact on employers subject to the Federal system. Employers should be aware that the ‘less than 100’ threshold which applied under WorkChoices has been overridden as of 1 July 2009 and more stringent guidelines for termination/dismissal have once again become enforceable. From 1 July 2009 many more employees will be able to pursue unfair dismissal if they feel they have been treated harshly in being terminated by their employer. Most employers will find from 1 July 2009 that, except in limited circumstances, they are required to observe a process (i.e. performance management process) before deciding to terminate an employee – the minimum requirements of the performance management process that an employer will need to observe will differ depending on the size of the organisation and the determinant will be whether the employer employs 15 or more employees or less than 15 employees (counted on a full-time equivalent basis).

 

In addition to the initial changes from 1 July 2009, the Modern Award System and the National Employment Standards (NES) are due to commence from 1 January 2010. For more information on the new Federal IR System (including dismissal legislation) please refer to the recent editions of our “Relations” Newsletter, in particular, the March and June 2009 issues.

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If your business was drawn into the Federal System of Industrial Relations when WorkChoices commenced on 27 March 2006 please ensure that you have increased the personal leave entitlement of full-time employees to 10 days per year (part-time employees calculated pro rata) as from 27 March 2006. Subject to the Minimum Standards of WorkChoices (which continue to apply under Fair Work Australia until superseded by the National Employment Standards from 1 January 2010) personal leave is to be credited at least monthly.

 

Prior to 27 March 2006, some awards previously provided for 10 days sick leave per year but many State-system awards only provided for 8 days per year. 10 days sick leave per year is a minimum standard of Federal legislation and if your business is subject to the Federal system you must allow for a minimum entitlement of 10 days sick leave per year for full-time employees (pro rata for part-timers).

 

Employers operating under the Federal system should not be confused by NAPSA Awards or Pre-reform Awards that may still reference a personal leave entitlement of less than 10 days per year in the body of the award. Although the content of clauses addressing personal leave in NAPSA and Pre-reform Awards cannot be updated under the current legislation (because no Body has the authority to amend these awards) employers in the Federal system should have no doubt that they must provide for a personal leave entitlement of 10 days per year as a minimum. Any confusion currently surrounding personal leave accrual in the Federal system should be eliminated by the introduction of the Modern Awards and National Employment Standards from 1 January 2010.