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Understanding awards in Australia: Who is covered?

Employee-trying-to-calculate-his-pay. Understanding-awards-in-Australia-is-important.
Employee using calculator and laptop computer to calculate his pay under the award system. It is complicated and confusing. Understanding awards in Australia: Who is covered? is important, get it wrong and it could cost you thousands of dollars.

Awards in Australia: how does it all work?

An award is a legal document created by the Fair Work Commission that stipulates the minimum employment conditions that an employee is entitled to. Also known as modern awards, they take into account the nature of an employee’s job or the sector in which they work. This means that they add to the entitlements Australian workers are given in the Fair Work National Employment Standards (NES). This includes setting minimum entitlements for pay, working hours, leave entitlements and other working conditions.

What are awards?

There are 121 awards in Australia, which are either based on an occupation or industry. An example of an industry award is the Clerks Private Sector Award. This applies to workers who predominately undertake clerical or administrative work. Another example is the General Retail Industry award, which applies to employees who work in the general retail industry. This could include check-out operators, shelf stackers, store managers or trolly collectors, to name a few.

Apart from industry-based coverage, awards in Australia can also be occupation-specific. This means that certain job roles within an industry may be subject to a distinct set of provisions and entitlements. For example, the Nurses Award applies to employees in the health sector, like nursing assistants, registered nurses and nurse practitioners. Another example is the Educational Services (Teachers) Award. This applies to workers in the school education sector or children’s and early childhood education sectors.

You can view a list of all Australian modern awards on the Fair Work Commission site.

Foreign-investors-trying-to-make-sense of-the-payment-system.-Understanding awards-in-Australia.
Foreign investors trying to make sense of the payments systems and classifactions in Australia. No where else in the world has this system. The high cost of living is partly caused by the maintence of the award system. Does this system encourage investment in Australia, the answer has to be no. Understanding awards in Australia for people new to this country is hard to figure out. This applies both to the employer and the employee. Many new arrivals are taken advantage of.

Who do awards cover?

In Australia, most workers are covered by an award. However, there are some exceptions. This includes workers who are not covered by the national workplace relations system. This includes some state and local government employees, who may be covered by state-based industrial relations systems.

Awards also do not cover workers who fall under a registered or enterprise agreement. Or if they do not work in a sector or job that has a designated award, which means they are award-free. In this case, their pay and employment conditions are set by the Fair Work National Employment Standards and National Minimum wage. Employees earning above a certain threshold may also be exempt from the coverage of some awards.

How do I know if I’m covered by an award?

If you do not know which award may apply to your job or industry, you can use the Fair Work Commission’s find my award tool. Once you have found the award that likely applies to you, it is important to check the coverage clause. This is typically clause 4 in the award. It is also important to check the award classifications section, which is typically at the end of an award, in Schedule A.

The award classifications section outlines the types of duties a worker must perform to be covered by the award. It also outlines whether the worker supervises others. And the experience or qualifications the worker needs to be covered by the award.

Employees applauding during a meeting. Everybody is happy they are paid correctly. The award system can be very generous to employees, nothing wrong with that. Does it contribute to the productivity in this country, I don’t think so.

TV producer loses award dispute over extra $393K in pay

Sometimes, an employee may believe they are covered by an award and are therefore owed extra entitlements. That is why it is always important to determine if your professional duties fall under those listed in an award. This issue was highlighted in a recent Federal Court case involving a Channel 10 producer – Michael v Network Ten Pty Limited [2023].

The producer, Maria Michael, argued that she was entitled to an extra $393,000 in severance pay as she felt her role came under an industry award. However, the Federal Court dismissed her case, finding that she did not fall under the award.

Having worked for the network since 1986, Ms Michael had been made redundant in 2020. She was handed $255,000 as a redundancy payment. This comprised of 12 weeks of redundancy pay, which she was entitled to under the Fair Work National Employment Standards. It also included payment in lieu of notice and other entitlements. At the time of her redundancy, Ms Michael was on a yearly salary of $262,250.

Producer argues extra pay entitlement under enterprise agreement

However, Ms Michael was not happy with her redundancy payment. She argued to the Federal Court that she was entitled to an additional 78 weeks of redundancy pay. The producer cited a clause in the Network 10 Enterprise Agreement. Clause 13.8 states that employees who have continuously worked for their employer for greater than three decades are entitled to 90 weeks of redundancy pay.

Based on this clause, Ms Michael argued that she was entitled to an extra 90 weeks of redundancy pay. By not providing that to her, she claimed that Network 10 had breached the terms of enterprise agreement. The extra entitled would add $393,350 to her redundancy payments, making it a total of $648,350.

Employer trying to figure out the award system

Producer argues broadcasting award applied to her

Ms Michael brought the Federal Court’s attention to clause 2.2 of the enterprise agreement. This states that the enterprise agreement was applicable to employees covered by the Broadcasting, Recorded Entertainment and Cinemas Award 2010. In particular, those employees “covered by classifications set out in Schedule B – Television and Broadcasting and Schedule D – Journalists”

She argued to the Federal Court that her position fell under the award. Ms Michael said that she “performed tasks that sufficed to constitute her in the classification of ‘producer’ under the award.” To back up this claim, she said that her role saw her perform tasks related to lighting, camera work, script content and editing, and set composition.

Ms Michael also said that she was involved in marketing, budgeting, product placement as well as managing production workers like editors, directors and hosts. In addition, the producer performed tasks that involved editing videos, photography and operating cameras.

Federal Court says Award did not apply to producer

After examining Ms Michael’s argument and the terms of the Award, the Federal Court came to a decision. It noted that her executive producer role was of “obvious and significant seniority.” And that at Network 10, Ms Michael “sat very much toward the top—if not at the top—of the proverbial tree.”

Ultimately, the Federal Court determined that Ms Michael’s position was not covered by the Award. It found that the Award did not apply to producers, “much less executive producers.” This meant that Network Ten’s enterprise agreement did not apply to her either. And that she was not entitled to the extra 90 weeks of redundancy payments she felt were owed.

If the employer can cut corners they will. The award system has built in employee protections and rights.

Federal Court examines the Award

The Federal Court delved into the specifics of the Broadcasting, Recorded Entertainment and Cinemas Award 2010. It determined that the categories within the Award, when “properly construed,” did not apply to Ms Michael. The Federal Court specifically highlighted schedule B clause B.1.14 of the Award. It determined that this clause “does not create a stand-alone classification of ‘producer.’” And that the clause applies to staff “who assist producers (and directors); not to producers themselves.”

Federal Court finds that Award did not apply

The Federal Court noted that “the major and substantial aspect” of Ms Michael’s role was to “manage production.” And that this “did not align” with the Award’s clauses. To decide if an employee’s position falls under industrial instruments like awards, courts will apply a “major and substantial” test. However, given its finding, the Federal Court felt that this was not even necessary.

The Federal Court noted that had it performed this test, it would have determined that Ms Michael had been hired as a producer. And therefore the Award would not apply to her. Given these findings, Ms Michael’s court case was dismissed.

Because of award guarantees, employees can budget better, pay their bills and save money

Employees get award coverage wrong in unfair dismissal claim

Another example of an employee incorrectly assuming that they fall under an award is the unfair dismissal case McMillan v Northern Project Contracting [2012]. The case concerned two employees, David McMillan and Graeme Norman, who both made unfair dismissal claims against their employer, Northern Project Contracting.

Before the merits of their unfair dismissal cases could even been heard, the Fair Work Commission had to first answer a key question. This was whether each worker was eligible to make an unfair dismissal claim. And if the Fair Work Commission had the jurisdiction to hear the applications brought by McMillan and Norman.

Section 382 of the Fair Work Act 2009 outlines under what circumstances an employee is protected from unfair dismissal. To gain protection, an employee must meet certain conditions, including completing the minimum employment period. They must also fall under one of three categories: being covered by a modern award, an enterprise agreement or having an annual salary below the high income threshold.

Fair Work Commission finds award did not apply

The crux of the matter lay in the interpretation of the Mining Award 2010 and whether it applied to both workers’ employment. The Fair Work Commission accepted that McMillan and Norman’s employment contracts had a clause that stated the Mining Award applied to them and their roles. However, it stated that contract declarations did not dictate award coverage. Instead, it was determined by legislation.

Citing Section 48 of the Fair Work Act, the Fair Work Commission clarified that a modern award covers an employee only if the award explicitly states coverage. The evidence presented indicated that the upper reaches of the award did not extend to managerial positions like Norman’s or supervisory roles like McMillan’s. Consequently, the contract’s reference to the award did not automatically confer coverage. In the end, the Fair Work Commission found that neither applicant was covered by the award.

“…that the contract having said so, cannot go to make it so,” stated the Fair Work Commission. “I hope that is capable of understanding. In this case an error was made by whoever provided these contracts and there was a reference to the Award.”

Work life balance in Australia is important, the awards do set alot of your rights

Did they meet the annual salary criterion?

While they did not fall under the award, McMillan and Norman had one more chance to be eligible for their unfair dismissal claims. This was if their annual rate of earnings fell below the high-income threshold. Both workers argued that their year-to-date earnings were below this threshold. However, the Fair Work Commission rejected this argument. It was found that the annual rate of earnings for both men were above the threshold, set at $124,366.

Fair Work Commission rejects unfair dismissal claims

Ultimately, the Fair Work Commission found that neither McMillan nor Norman met the criteria outlined in s.382 of the Fair Work Act 2009. It was determined that they were not covered by a modern award, an enterprise agreement and that their annual earnings exceeded the high income threshold. As a result, the Fair Work Commission lacked jurisdiction to hear their unfair dismissal cases. Both their applications were therefore dismissed.

Dismissed over the award system there is a strict 21 days to lodge a gneral protections or dismissal claim.

Conclusion to: Understanding awards in Australia

For over three decades, A Whole New Approach has helped Australian workers fight for their rights via the Fair Work Commission. We are not lawyers, but Australia’s leading advisors and commentators. We can help you whether you have been unfairly dismissed, faced discrimination or harassment, or had your workplace rights infringed. But act fast, as you have just 21 days from the day of your dismissal to lodge a claim with the Fair Work Commission.

We operate in every Australian state and territory and we offer a no-risk, no-fee service. Over the last 30 years we have successfully assisted more than 16,000 employees in seeking justice through the Fair Work Commission.

Contact us today at 1800 333 666 for a free and confidential conversation about your specific situation.

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