20 February, 2020
The Fair Work Commission has issued its decision setting out a schedule of draft variation determinations outlining the amendments that will be made to the annualised wage provisions for various modern awards including the Banking, Finance and Insurance Award 2010, Clerks – Private Sector Award 2010, Horticulture Award 2010, Legal Services Award 2010, Manufacturing and Associated Industries and Occupations Award 2010 and Mining Industry Award 2010. Comment on technical and drafting matters in regards to the draft determinations (other than those concerning the Hospitality Award, the Marine Towage Award and the Restaurant Industry Award) was invited from the parties until 31 January 2020.
Given the narrow scope of comment requested it is unlikely that the draft determinations will be amended in any significant way before commencing operation on 1 March 2020. In regards to those draft determinations concerning the Hospitality Award, the Marine Towage Award and the Restaurant Industry Award, the Commission has called for submissions on more substantive matters and has determined that the operative date of 1 March 2020 will not apply in respect of these awards.
The Commission is yet to determine a new operative date.
Interestingly, in the decision, the FWC indicated that it considers common law offsetting provisions in employment contracts continue to be available despite the new and prescriptive requirements contained in the draft determinations. The Full Bench stated: “employers may, pursuant to private contractual arrangements, pay employees in accordance with a salary arrangement that compensates for or “buys out” identified award entitlements without engaging with the annualised wage arrangements provision in the applicable award”. This provides an indication of the Full Bench’s current views, however ultimately the issue will be determined by a Court, that is not bound to accept and apply this view.
It remains imperative that employers regularly review their use of annualised salaries (either set under Award provisions, or utilising common law offsetting provisions) against the applicable Award to ensure compliance with their statutory obligations.
For further information, please contact:
Drew Pearson, Partner, Herbert Smith Freehills
drew.pearson@hsf.com
