Modern awards contain the minimum employment entitlements for employees based on their industry or occupation. They do not contain entitlements that are less beneficial to employees than the NES. There are currently 122 modern awards that cover various industries in Australia.
Modern awards relate to industries or job function (e.g. mining or nursing). Most industries have a modern award, which covers all employers and employees in that sector. For more information on award coverage under the modern awards system, visit the Fair Work Ombudsman website at www.fairwork.gov.au
when do modern awards apply?
Since 1 January 2010, modern awards have replaced thousands of federal and state-based awards, and cover most workplaces. The commencement of modern awards means there have been changes to minimum terms and conditions for many employees. The changes vary by state, industry and employer. A modern award applies to all employers and employees who perform work in an industry or occupation covered by that award. Every award has a coverage clause or job specifications to explain clearly who it applies to.
Modern awards may not apply to some managers. They may also not apply to high-income employees (who have an appropriate written guarantee of annual earnings above the S$138,900 high-income threshold). Even if a modern award covers the industry they work in, the modern awards may not apply to an employer who is bound by another pre-reform transitional instrument such as an enterprise award or registered agreement, for example. An enterprise award regulates the terms and conditions of employment only in the single business specified in that award.
enterprise and registered agreements
Enterprise agreements – and other registered agreements – set out conditions of employment, including wages, for a period of up to four years. Enterprise agreements are negotiated between the employer and employee (usually through a union), and cannot specify employment entitlements that are less than those stated in the modern award.
An enterprise agreement can be a complex process as it requires specific steps that need to be taken during the negotiation process, as well as ensuring certain terms are included or excluded within the agreement.
The Fair Work Commission (FWC) must approve the enterprise agreement and will apply the Better Off Overall Test (BOOT) by comparing the agreement to the relevant modern award. An enterprise agreement cannot exclude the NES.
Once an enterprise agreement is terminated, the employment entitlements under the modern award will apply.