From 1 July 2020, following a decision by the Fair Work Commission, the coverage of the Miscellaneous Award 2020 has been significantly extended to now capture many employees who were previously assumed to be award-free.
The coverage clause of the award has been amended by the deletion of clause 4.3 and amendments to clause 4.2. See below the changes with tracked changes:
4.2 The award does not cover those classes of employees who, because of the nature or seniority of their role, have not traditionally been covered by awards including managerial employees and professional employees such as accountants and finance, marketing, legal, human resources, public relations and information technology specialists.
4.3 The award does not cover employees:
(a) in an industry covered by a modern award who are not within a classification in that modern award; or
(b) in a class exempted by a modern award from its operation, or employers in relation to those employees.
A full copy of the new coverage clause can be viewed here.
What has changed?
The updated clause has removed an exclusion from coverage for employees who have not traditionally been covered by awards because of the nature or seniority of their role, or where they did not have a classification under another award or were in a class exempted from one. This means that employees may now be eligible to be covered by the Miscellaneous Award if they fall under one of the classifications under the Award, including for example, an employee that has advanced trade qualifications and is carrying out duties requiring such qualifications, or is a sub-professional employee.
Those types of employees may have been treated as award free in the past.
The Full Bench provided examples of this in their decision, to provide further context to this point. The first was of cleaners not covered by the Cleaning Services Award 2010 (because that Award is limited in coverage to employers in the contract cleaning services industry) and the second was security guards not covered by the Security Services Industry Award 2010 (because coverage of that Award is limited to employers in the security services industry). Under the new clause, both of these groups of employees will likely be covered by the Miscellaneous Award if employed by an employer who is not in the cleaning services or security services industry, such as in the latter case a security guard employed by a building and construction company to monitor construction sites.
What does this mean for employers and employees?
In summary, the coverage of the Miscellaneous Award 2020 will now extend to cover employees up to and including those who hold an advanced trade qualification level (if trade qualification is required to carry out the role), or who are sub-professional employees, who are not already covered by another modern award and who are not excluded from coverage by the FW Act.
Employers will need to critically review their workforce and identify any employees who may previously been considered award-free who may now be captured by the extended coverage terms of the Miscellaneous Award 2020 and make any necessary changes. This includes reviewing any employment contracts and payment arrangements to ensure that if the employee is now covered by the award, that remuneration levels and employment arrangements are not less than the award-based entitlements which may now apply, including:
- minimum wages of between $740.80 and $941.10 per week;
- penalty rates for hours worked outside 7am – 7pm Monday to Friday and on weekends and public holidays;
- payment of overtime rates or time off in lieu of payment for overtime;
- annual leave loading; and
- allowances such as leading hand/in charge, first aid, meal and vehicle allowances.
Award coverage also creates an entitlement to protection from unfair dismissal for those classifications previously excluded due to their award-free status combined with being a ‘high income earner’. Employers will need to be mindful of the new coverage provisions in ensuring employees are afforded procedural and substantive fairness to mitigate against the risk of new claims.
Employers need to move quickly with their reviews, as the updated coverage provisions take effect on 1 July 2020.
ER Strategies clients who currently engage employees they have considered to be award-free are urged to review these arrangements and seek advice from our consultants on 1300 55 66 37 to discuss next steps. We are leading experts in calculating award entitlements against salaried arrangements, for example, to determine any exposure to possible underpayments.
ER Essentials subscribers who need support can call us on 1300 55 66 37 to discuss how we can assist your business.