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Recapping the Modern Award Review: What is Happening now?

A lot has happened since the Fair Work Commission (FWC) commenced its review of modern awards in 2014. Now, 6 years later, the FWC is close to completing the mammoth task of reviewing the operation of each modern award and making variations to ensure that they comply with the "modern awards objective".

When is This Happening?

On 4 February 2020, the first tranche of the revised modern awards (the "2020 Awards") commenced operation. These will be followed by a second tranche on 4 May 2020 and a third on a date still to be determined.

In addition to the award-specific changes which are commencing in 2020, throughout this process the FWC has also made a number of general changes to all or the majority of modern awards, many of which have taken effect progressively since around 2016.

What is Happening?

New modern awards will be created and others have been substantially rewritten, including a number that are now intended to be in plain language aimed at making them easier to understand. However, whatever industry you belong to, the underlying entitlements will have changed.

The "common issues" in which the FWC has made changes include: 

  • Abandonment of employment
  • Annual leave, including cashing out, taking leave in advance, and dealing with "excessive leave"
  • Annualised salaries
  • Time Off In Lieu (TOIL)
  • Casual conversion and minimum periods of casual engagement
  • Family and Domestic Violence leave
  • Family friendly work arrangements
  • Termination of employment, including deductions, payments on termination and redundancy provisions
  • Overtime and penalty rates, such as clarifying how different rates interact and in particular the entitlements (if any) of casual employees to overtime rates.

These issues, along with a range of specific penalties, allowances, leave arrangements and other entitlements may have changed in each award, depending on the variations sought and the specific circumstances of the industry or occupation. For example, K&L Gates has assisted a number of clients, both employers and employer associations, to vary entitlements ranging from: 

  • which classifications apply to their employees
  • the minimum qualifications employees must hold
  • introducing new holiday shut down provisions
  • changing which award applies to their specific sector
  • allowing employers to make fairer employee deductions from an employee's salary on termination
  • lowering the minimum engagement period for some employees
  • clarifiying overtime rates payable to certain employees.

How Does it Affect Us?

Of course, this is most relevant to businesses employing employees on modern award terms and conditions, which are the minimum permitted conditions for their relevant industries and occupations.

However, it is also affecting employers who are entering into new enterprise agreements. Because these agreements must pass the Better Off Overall Test, and make each employee better off than they would be under the relevant award, when businesses do not keep up with these changes it delays or prevents the approval of agreements that have been negotiated with employees and unions.

What now?

Employers need to:

    1. Understand the changes that have been made to their awards. K&L Gates has been working closely with a number of clients in responding to the changes brought about by the modern review, including providing easy to understand advice about how to interpret and apply any new provisions.
    2. Ensure they are negotiating valid agreements. K&L Gates can assist employers at all stages of the enterprise bargaining process, from when bargaining commences through to getting an agreement over the line with the FWC.
      Attached to this update is a handy fact sheet to help bring you up to date on some of the common variations to awards that have taken effect during the award review period.

Click here to view our handy fact sheet which will help to bring you up to date on some of the common variations to awards that have taken effect during the award review period.

Copyright 2022 K & L GatesNational Law Review, Volume X, Number 48

About this Author

 Michaela Moloney, Partner, Melbourne

Ms. Moloney has worked for a wide cross section of clients including employers in the public sector, health, education, retail, energy and manufacturing industries and has significant experience in all aspects of employment, industrial and discrimination law. She acts on a broad range of matters for employers including drafting and interpreting employment agreements and policies, managing employee issues arising out of sale of business and outsourcing transactions, assisting employers with the discipline of employees and termination of employment, negotiating collective agreements,...

Nick Ruskin, KL Gates, Australia, employment claims lawyer, anti discrimination issues attorney

Mr Ruskin practises in labour relations and employment law. He represents corporations in a number of industries including energy, retail, services and healthcare, and public sector clients in the health, higher education, government and community sectors.

He has extensive experience in labour disputes, employment claims, anti-discrimination issues, legislative compliance, advocacy before tribunals and providing forthright, practical advice to clients.

He has been engaged from time to time as an external consultant to...

Paul Hardman, KL Gates, Workplace Safety Investigations Lawyer, Labor Disputes Attorney

Mr. Hardman is a partner in the Labour Employment and Workplace Safety practice in the Brisbane office. He provides a wide range of advice and services to clients regarding employment, safety, investigations and disputes relevant to the workplace.

He is an experienced advocate and has appeared extensively in both State and Federal courts and tribunals in employment, safety and other contentious matters. He has experience across a broad range of industries including construction, water, manufacturing, agricultural, petroleum, gas and mining....

John Monroe, Lawyer, Melbourne

Mr. Monroe is a lawyer in the Labour, Employment and Workplace Safety team in our Melbourne office. He acts in employment, industrial and discrimination matters for a broad cross-section of employers, with particular experience in the healthcare, sporting, fitness, education, research, government and manufacturing sectors.

With a passion for industrial disputes, Mr. Monroe regularly  works with employers to manage industrial matters such enterprise bargaining, industrial action, collective entitlements claims, implementing workplace change and...