Correctly determining which Modern Award applies to your business is critical for ensuring that your employees are being paid at least the minimum wage they are entitled to for their job. Modern Awards regulate all key matters relating to employees’ pay and conditions. They state what overtime and penalty rates apply, the ‘ordinary’ hours an employee can work, meal break entitlements and procedures that must be followed on termination of employment, and much more. So clearly, it’s important to get this right.
There are currently 122 Modern Awards, and knowing which one (or two, or three…) apply to your business can be tricky. Before the Award modernization process was settled in 2010, there were about 4,500 Awards, so things are a bit simpler now, but the question of Modern Award coverage is still sometimes ambiguous.
Employers that operate in what is broadly and colloquially known as the hospitality industry could scan the list of Modern Awards, and easily assume that the Hospitality Industry (General) Award 2010 applies to their business. Right? Well, maybe. Flick to Clause 4 – Coverage, and you will see that this Award covers employers in the ‘hospitality industry’, and their employees in the classifications within ‘Schedule D’. Keep reading and you will see that ‘hospitality industry’ includes hotels, wine bars, and various types of accommodation providers, and restaurants operated in or in connection with ‘premises owned or operated by employers otherwise covered by this Award’. This means that if you operate a restaurant connected with a hotel, then you’re covered by the Hospitality Award, but if you operate a stand-alone restaurant, then a different Award actually applies to you – the Restaurant Industry Award 2010.
Pubs aren’t specifically mentioned in the definition of ‘hospitality industry’, but since hotels, taverns and ‘liquor booths’ are covered, it’s safe to say your business falls within the scope of the Hospitality Award’s coverage.
But let’s not forget the Fast Food Industry Award 2010. This Award covers employers who serve food and drinks to be consumed by the public primarily away from the point of sale. It also covers take-away food outlets within retail complexes and shopping centres. But not coffee shops, cafes, bars and restaurants primarily providing a sit down service within a shopping centre – these businesses would still be covered by the Hospitality Award, or Restaurant Award.
Finally, consider the Registered and Licenced Clubs Award 2010. This covers employers who operate clubs registered or recognised under State, Territory or Commonwealth legislation. Think Surf Lifesaving Clubs, RSL clubs and footy clubs. The Chinese restaurant that operates as a separate business to the RSL club would still be covered under this Award, rather than the Restaurant Industry Award, as the Registered and Licenced Clubs Award covers employers or employees engaged in the performance of any work ‘in or in connection with or for’ clubs.
Once you know what Award applies to your business, you need to work out whether there’s a classification in the Award that applies to your employees. Jobs like barista, bar staff, waiters and waitresses, chefs and security will be covered by an Award. In contrast, high level operations managers and your accountant are likely to be Award-free. Where an employee performs a mix of duties, you need to examine the principal purpose or primary function of the role. This is not just a question of what an employee spends most of their time doing, but also the broader circumstances of employment and what the employee was employed to do. A job title is only indicative and not determinative of Award coverage. Courts look at the functions an employee actually performs. Accordingly, clearly defined position descriptions are key.
Workforce Guardian are experts on helping employers determine what Modern Award applies to their business, classifying employees under that Award and in turn, advising on the minimum pay rates employers need to pay to be compliant with Australian employment laws. We also interpret all that legal jargon and explain and summarise what regulations apply in plain-English. With each Modern Award approximately 90 pages long, and largely written in complex language by people who have never run a business in their life, you stand to save a lot of time, money and stress by getting affordable expert advice.
Michelle Blewett is an Employment Lawyer at Workforce Guardian