Modern Awards: The Importance of Identifying the Correct Award For Your Employees

Author: Megan Adams & Zeinab Farhat, Progressive Legal

There are currently around 121 modern awards of general application in Australia. If you are an employer, it is important to identify which award is applicable to your employees. This is especially true if you have many employees who may be covered by different awards within your business.

Understanding which award applies will ensure that you are paying each employee their relevant entitlements and providing them with the applicable working conditions as required under the relevant award. In this article we’ll understand what a modern award is; how you can determine which award is applicable to an employee; and further implications.

What are modern awards? 

An award outlines the minimum conditions and pay rates applicable to certain employment. The applicability of a certain award is dependent on the industry that a person is working in. Some examples of awards include and are not limited to: 

1. the Aged Care Award [MA000018]; 
2. the Banking, Finance and insurance award [MA000019]; 
3. the Hair and Beauty Award [MA000005]; and 
4. the Legal Services Award [MA000116]. 

A full list of modern awards can be found on the Fair Work Ombudsman’s website located here. 

Put simply, an employee who is covered by an award obtains various benefits that they would not obtain if they were “award free”. Such benefits include: 

1. minimum rates of pay; 
2. rules about the performance of work and applicability of penalty rates or loadings;  
3. overtime rates and allowances; and  
4. dispute resolution.  

As an employer, it is important to remember that awards set the minimum standards for an employment relationship – you can always pay above the award rate and you may have to do so for some positions at certain times to be sure that you attract and retain talent.  

When don’t modern awards apply? 

Awards will (generally) not apply if an employer has an enterprise agreement or other registered agreement in place.  In some cases, the enterprise agreement or other registered agreement will reference an award for some conditions. 

Some professions do not have award coverage, such as solicitors.  In these professions, the National Employment Standards (NES) set employees’ minimum entitlements. 

How can I determine which modern awards are applicable to an employee? 

Whilst it is best to obtain legal advice from an employment lawyer to determine which award applies to which employee, you can consider the applicability of an award to a certain employee by reviewing the coverage clauses and job classifications within the award.

The Fair work  Ombudsman also provides a “find my award” tool which assists in identifying which award applies to you.

It is important to remember that it is not uncommon for employers to have employees on different modern awards.  For instance, in the legal sector, solicitors in an office are generally not covered by an award, but the clerks, paralegals, administrative staff, and law graduates are.

What are the implications of not identifying the correct modern awards? 

If you fail to identify the correct award applicable to an employee, you run the risk of not paying that employee their relevant entitlements, including any minimum pay rates and conditions which are provided in the award.  

By ensuring you have correctly identified the award from the outset, you prevent potential disputes later arising in relation to the proper payment of certain entitlements. 

Key takeaways

Understanding which award applies is essential to ensuring that you are paying your employees their entitlements. If you have any doubts regarding the applicability of a certain award for your employee(s), it is best practice to engage an employment lawyer who can advise you on what modern awards apply.

Reach out to out to Progressive Legal’s experienced workplace team by requesting our expert advice below.

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