Modern Award Review - Latest News June 2015

14th June 2015

The seemingly never ending 4-Yearly Review of Modern Awards has produced a couple of decisions that will result in amendments to the modern awards. The decisions address two important areas:

• Inconsistency with the NES
• Annual leave

An overview of the decisions is provided below.

Inconsistency with the National Employment Standards

In the initial stages of the 4-Yearly Modern Review the Fair Work Ombudsman identified a significant number of modern award provisions that conflicted or were inconsistent with the Naitonal Employment Standards. In particular, quite a number of award definitions of shift work entitling employees to a fifth week of annual leave were inconsistent with the NES. Other awards such as the Waste Management Award included a right to withhold payment when employees were absent due to illness either side of public holidays. Consequently, the Fair Work Commission decided to amend modern awards to correct those inconsistences. The list of amendments is extensive, so care needs to be taken to firstly review the Schedule of amendments and secondly, where applicable adjust your payroll and policies.

View the schedule of determinations here.

The amendments to the awards commenced on 27 May 2015.

Annual leave

The Fair Work Commission has decided to amend modern awards allowing:

• individual agreement for employees to cash out 2 weeks annual leave each year, as long as they retain at leat 4 weeks accrued leave
• employers to direct employees to take 2 weeks excessive annual leave where they have accrued at least 8 weeks leave and have not agreed on a time to take the leave.
• EFT payment of wages on normal pay day during annual leave rather than payment in advance in 51 modern awards
• taking of annual leave in advance of an entitlement to leave accruing, by agreement between an employer and employee.

A model clause allowing employers to direct employees to take annual leave over close-down periods was rejected. However, the Commission said the issue should be dealt on an award by award basis.

The Commission also considered applications to insert a clause to purchase additional leave,and concluded there was sufficient interest for it to produce a discussion paper for later in the year.

View the model cashing out clause and model excessive annual leave clause.

It is expected the Commission will issue formal orders to give effect to the decision in the next few weeks.

Interested parties will be provided with an opportunity to make further submissions directed at both the model terms and the proposition that all modern awards be varied to insert the model term. The Commission will then make its final decision on the content of the model clause.

Please contact us if you wish to discuss the implications of these decisions for your business.