Changes to modern awards – commenced 1 November 2018

As part of its 4-yearly review, the Fair Work Commission has made changes to a number of modern awards.  The changes are in relation to payment of wages on termination of employment as well as plain language re-drafting of several standard clauses.

The changes take effect from the start of the first full pay period that started on or after 1 November 2018.

The changes are briefly outlined below.

Payment of wages on termination of employment

89 modern awards have been updated to incorporate a model clause in relation to payment of wages to an employee on termination of employment.  The clause requires an employer to pay an employee’s wages and all other amounts owing under the award and the NES no later than 7 days after the day on which the employment terminates.  This is an excellent clarification and will assist employers considerably in knowing a definitive timeline.

This requirement is subject to further order of the Commission, as well as the employer making deductions authorised by the award or the Fair Work Act.

The model clause notes that there are other requirements regarding timing of payments to employees such as those under section 117(2) of the Act (payment in lieu of notice) as well as under section 113 of the Act and State and Territory legislation (long service leave).

In relation to the 33 modern awards that were not updated, the Commission is considering submissions and discussions between parties and will issue a decision shortly.

Standard clauses

As part of the Commission’s plain language project, a number of clauses that are standard across most modern awards have been reviewed and re-drafted.

The following standard clauses in 104 modern awards have been amended:

  • Award flexibility (renamed individual flexibility arrangements)
  • Consultation about major workplace change
  • Consultation about changes to rosters or hours of work
  • Dispute resolution
  • Termination of employment, including:
  • limitations on which employees the clause relates to;
  • that written notice of termination is now not required from an employee;
  • limitations on deductions from wages of employees who do not provide enough notice and that any deductions must not be unreasonable;
  • a new job search entitlement that provides that where an employer gives notice, an employee is allowed up to one paid day off to seek other employment.

A discussion of every change made by the Commission to the above standard clauses is beyond the scope of this alert and it is recommended that employers review and become familiar with the amended clauses.  We are, of course, happy to assist with any inquiries in relation to the changes.

In relation to the 18 awards that were not varied, the Commission will issue a statement regarding next steps in due course.

Action for employers

Employers should review the modern awards applicable to their employees to identify and become familiar with the changes.

Employers will need to ensure that the changes are applied from the start of the first full pay period that started on or after 1 November 2018.

Disclaimer: The information contained this article is general and intended as a guide only. Professional advice should be sought before applying any of the information to particular circumstances. While every reasonable care has been taken in the preparation of this update, Aitken Legal does not accept liability for any errors it may contain. Liability limited by a scheme approved under professional standards legislation.