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Fair Work Commission Overhauls Annualised Wage Clauses

08 April 2019
The Fair Work Commission recently handed down a decision which will introduce or significantly alter annualised wage clauses in a large number of modern awards, including in mining, banking, horticulture and hospitality. 

What are annualised wage clauses?

Annualised wage clauses allow a full-time employee’s pay to be calculated by reference to a predetermined ‘rolled up’ annual lump sum, as opposed to a combination of a weekly wage, overtime and penalty rates, among other things.

 

What does this mean for employers?

The clauses will impose stringent safeguards for employees under annualised wage arrangements, including record-keeping and reconciliation requirements.  Once introduced, employers affected by the new clauses will be required to keep records of the hours employees work and calculate the pay an employee would have been entitled to on a standard award basis. Employers will then be required to make good any shortfall, so that an employee is not disadvantaged for receiving an annualised wage.

The clauses are only proposed to apply to full-time employees at this stage.

 

What happens next?

The proposed standardised clauses are not entirely uniform and have not yet been inserted into the relevant awards, but the FWC has indicated it will do so subject to further submissions and evidence from interested parties about transitional provisions and other items

If your workplacee uses annualised wage arrangements you should seek advice about the steps to take to ensure compliance under the new award provisions.

If you require further information or have any queries in relation to this alert, please feel free to contact Matthew Smith or Sina Zevari.

 

Footnotes:

1 4 yearly review of modern awards – Annualised Wage Arrangements [2019] FWCFB 1289. (https://www.fwc.gov.au/documents/decisionssigned/html/pdf/2019fwcfb1289.pdf)

Acknowledgements:

We would like to acknowledge the contribution of Kate Archibald to this article.

Further Reading