Awards: Understanding, applying and adherence

It can be time consuming, confusing, and complex keeping up to date with requirements, particularly when dealing with multiple awards. However, getting it wrong has serious implications.

As we enter another year, we felt it was timely to consider the importance of understanding, applying, and adhering to workplace awards. It can be time consuming, confusing, and complex keeping up to date with requirements, particularly when dealing with multiple awards. However, it is essential employers use correct awards for their industry and job types, follow standards and remain up to date with ongoing changes to awards. Continue reading to learn more about workplace awards and their importance.

What is an award?

Awards (also known as modern awards) are vital tools used to maintain fair and equitable workplace conditions and entitlements over more than 100 different industries or occupations in Australia. They are legal documents created under the Fair Work Act 2009 which outline minimum standards such as:

  • Pay rates including penalty and overtime rates
  • Allowances
  • Hours of work
  • Breaks

It may be the case that various awards apply to the one workplace due to the nature of their business and types of jobs performed. This can be confusing and difficult to determine what award coverage is appropriate and balance staff expectations. For example, a construction company may employ both labourers and administration staff. Both very different jobs with different working conditions and entitlements. The employer is required to comply with standards relevant to the award and which are applicable to each different job type.

In the event a workplace agreement is in place, awards become irrelevant.

Employer obligations

An employer is required to comply with the minimum standards outlined in the awards relevant to their workplace. Failure to adhere to and apply the correct award for a business can have serious implications, such as legal action resulting in penalties.

It is important to note that employment contracts cannot override an award. But the employment contract should be informed by the award and the standards it enforces.

Under the Fair Work Act 2009 the Fair Work Commission is obligated to review minimum wages annually and undertake a thorough, complex review of awards every four years. Therefore, it is essential employers regularly review awards to stay up to date with any changes.  

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