Modern Awards
Once established by the AIRC, FWA will have the power to make, vary and revoke modern awards.
A modern award will cover employees, employers and organisations if the award is expressed to cover them. A modern award or enterprise agreement must not exclude the NES, however they may include terms that are incidental to the operation of the NES or that supplement the NES, but only if they are not detrimental to an employee in any respect when compared to the NES.
A modern award will not apply to an employee if there is an enterprise agreement that also applies to the employee.
Modern awards must contain a “flexibility term” to enable employers and employees to agree on arrangements to vary the effect of the award in order to meet the genuine needs of their specific employment relationship.
In addition, Modern awards will not apply to those employees earning over $100,000 per annum. This remuneration cap will be calculated by using a "guarantee of annual earnings". A high income earner will be defined in the Regulations, but it is proposed that the amount will be $100,000 subject to indexation from 27 August 2007.
The earnings used to calculate this amount do not include:
- payments which cannot be determined in advance (some examples are: commissions, incentive based payments and bonuses and overtime, unless the payment is guaranteed), and
- compulsory superannuation contributions.
To satisfy the requirements of the legislation the guarantee will need to be in writing and agreed to by the employee within 14 days of an employee commencing employment and the employer will be required to notify the employee in writing that a modern award will not apply to them.
The Award Modernisation process is currently being undertaken by the AIRC on an industry by industry basis and for those who may be interested, some draft modern awards are available on the AIRC website.
