Employment Law

Annualised Salaries and Casual ‘Double Dipping’

ANNUALISED SALARIES

Considerable Changes to Awards Regarding Annualised Salaries Provisions

The Fair Work Commission (FWC) has made wholesale changes to many Awards related to the annualised salary provisions. On 23 December 2019 the FWC issued draft determinations of the clause for 21 modern awards.

The Awards have differing provisions which come from the 3 differing “model” clauses that were developed by the FWC. These provisions will take effect from 1 March 2020.

The commonalities between all of the model clauses are:           

  • Advise employees in writing of the terms of their arrangement and what award entitlements it will cover.
  • Specify an outer limit for the ordinary and overtime hours that the annualised wage is designed to pay for and guarantee that for any additional hours worked beyond those limits within each pay cycle additional payments will be made to meet award minimum remuneration.
  • Employers must keep records of the start and finish times of each shift, the duration of all unpaid breaks and have them signed by their employees each pay period or roster cycle.
  • On the anniversary of each such arrangement compare the salary earned in that year with the minimum award payment for working the same hours and backpay any shortfall within 14 days. 

The Awards to be varied are as follows:

  • Banking, Finance and Insurance Award 2010
  • Clerks – Private Sector Award 2010
  • Contract Call Centres Award 2010
  • Hydrocarbons Industry (Upstream) Award 2010
  • Legal Services Award 2010
  • Mining Industry Award 2010
  • Oil Refining and Manufacturing Award 2010 (clerical employees only)
  • Salt Industry Award 2010
  • Telecommunications Services Award 2010
  • Water Industry Award 2010
  • Wool Storage, Sampling and Testing Award 2010
  • Broadcasting and Recorded Entertainment Award 2010
  • Local Government Industry Award 2010
  • Manufacturing and Associated Industries and Occupations Award 2010
  • Oil Refining and Manufacturing Award 2010 (non-clerical employees)
  • Pharmacy Industry Award 2010
  • Rail Industry Award 2010
  • Horticulture Award
  • Pastoral Award 2010
  • Health Professionals and Support Services Award 2010 
  • Marine Towage Award 2010
  • Restaurant Industry Award 2010
  • Hospitality Industry (General) Award 2010 – non managerial staff only

The clauses to be introduced into these Awards is dependant upon the “model” clause that has been decided upon and adopted by the FWC.

For those clients subject to the Registered and Licensed Clubs Award 2010, the FWC has decided not to vary the Managers Salary Exemptions stating that these provisions are “exemptions” and not “annualised salary” provisions. In respect to the Hospitality Award Managers provisions, the FWC is still considering these issues on the basis of the above notion.

If you have employees engaged under any of the Awards referred to above, it is imperative that you seek advice in relation to the application of these new clauses.

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CASUAL ‘DOUBLE DIPPING

Casual Employment – the WorkPac v Skene Saga Continues

Clients will recall the WorkPac v Skene matter from 18 months ago where the Federal Court determined that an employee (Skene) was not a casual employee because of the regular and systematic hours that he worked. This is in spite of the fact that his employment contract clearly stated that he was a casual employee.

In response, The Federal Government introduced changes in late 2018 to the Fair Work Regulations which, in essence, stated that if a casual was paid a loading (in addition to a permanent rate of pay) that compensated an employee for being a casual then such loading can be taken into account when establishing the entitlements owing to the employee (ie. annual leave, sick leave and redundancy payments), if at some stage the casual employee is deemed to be a permanent employee.

These Regulations were sought to be disallowed by Labor in 2019, but this motion was defeated in the Senate. So, these Regulations may only be a “band-aid” fix, whilst the Coalition is in Government.

However, the more “solid” approach has come from WorkPac, wherein they have sought to have a Full Court of the Federal Court make a determination that another former casual employee, Robert Rossato is not entitled to be paid leave under the FW Act, and that WorkPac be entitled to set off payments made to Rossato against any leave entitlement that Rossato may be found to have. If the Federal Court accepts the WorkPac argument, then this is expected to over-turn the outcome of the Skene case.

Attorney-General Christian Porter says he’ll consider legislating to stop so-called “double-dipping” by casual employees if the Federal Court decision doesn’t go the Government’s way.

Notwithstanding the current status of this issue, our advice to all of our clients is:

  • Regularly review casual engagements within the workforce to identify patterns that may suggest permanent employment and obtain advice about converting those employees to permanent employment arrangements.
  • Review employment contracts to ensure casual loading amounts are separately identifiable and that contracts have effective off-set clauses.

By Greg Arnold

Director and Principal Consultant

Effective Workplace Solutions

annualisedsalaries, caselawupdate, Casuals, employment law, humanresources

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