What is an award?
A modern award is a set of terms that detail the minimum conditions for employees working in particular industries and occupations.
Modern awards came into effect in 2010 and cover most Australian employers and employees.
What is an enterprise agreement?
With enterprise agreements:
- They set out the employment conditions between an employer and an employee or group of employees.
- They include specific conditions for one workplace.
- The modern award doesn't apply, but the pay rate in the agreement can't be less than the pay rate in the modern award.
In most cases, employees in the national system can't be paid less than the minimum wage outlined in the award or agreement.
Transitional arrangements for wages
Most modern awards contain the minimum wages that employees are entitled to under that award. But some might have a transitional arrangement in place, where the wage-related parts can be phased in over time.
The transitional provisions apply to:
- base rates of pay, including piecework rates
- casual and part-time loadings
- Saturday, Sunday and public holiday penalty rates
- evening and other penalty rates
- shift allowances or penalties
Check the relevant award on the Fair Work Ombudsman website to see if there are any transitional conditions in place. They're usually in Part 1, section 2 of the award.
National Employment Standards
The National Employment Standards (NES) are 10 minimum conditions of employment that apply to all employees in the national workplace relations system.
The NES covers:
- maximum weekly hours of work
- ability to request flexible working arrangements
- annual leave
- public holidays
- parental leave
- long service leave
- personal leave (sick/carer's and compassionate leave)
- community service leave
- notice of termination and redundancy pay
- the Fair Work Information Statement.
You can't offer less than what is outlined in the NES. The NES terms will override any less favourable conditions in any award, enterprise agreement, individual workplace agreement or common law contract.
What if you breach an award?
The minimum conditions in modern awards are legal requirements, so any breach of the terms can damage the viability of your business and cost you more money long-term.
If your business doesn't provide at least the terms set out in the award, you can:
- be investigated by the Fair Work Ombudsman, which can result in long, expensive audits and costly penalties
- receive bad publicity and damage the reputation of your brand
The cost of getting it right now is low compared to the cost of defending any actions taken against your business.