Employment & Safety Briefing – Modern awards: Myths debunked
Modern awards are one of the most misinterpreted elements of our workplace relations landscape. A breach of an award can lead to substantial pay-back liabilities as well as civil penalties. In our experience, where there is one award breach there are likely to be others: multiple breaches over an extended period of time.
In this article we dispel some of the most common myths about modern awards.
Myth: Senior employees are beyond the reach of modern awards
A key misconception is that senior employees and professionals will not be covered by modern awards. This isn’t always the case. Certain senior positions, including engineers, architects, senior retail managers, and occasionally even CEOs, may be covered by a modern award.
Do not assume that a senior or professional employee isn’t covered. It’s crucial to verify the award coverage for all roles, regardless of seniority.
Follow these steps:
- Check to see if an award applies. A great starting point is the ‘Find my award’ tool on the Fair Work Ombudsman’s website.
- Review the coverage clause to see which industries or occupations are covered by the award.
- Review the position classifications as against the actual duties and skills of the role. The classifications are usually found in a schedule at the end of the award.
Myth: Common law contracts override award provisions
There’s a widespread belief that the presence of a common law contract negates the need to adhere to award provisions. This is a dangerous assumption. Awards carry the weight of law, and any common law contract must align with the minimum conditions outlined in the national employment standards and the applicable modern award.
It is possible to offset some award entitlements. However, this must be done diligently and with proper drafting to ensure that a legally enforceable set-off or high-income guarantee is in place.
There has been a myriad of cases where employers have attempted to contract out of award entitlements and have failed – a costly mistake.
Myth: High income earners are exempt from unfair dismissal claims
The notion that high income earners are barred from lodging unfair dismissal claims is another myth that needs dispelling. If a high-income earner is covered by a modern award or an enterprise agreement, they retain the right to pursue an unfair dismissal claim. This is the case even where a high income guarantee has been provided.
What next?
Long held misconceptions about modern awards are leading to non-compliance. It’s critical that employers are alert to compliance issues and can ensure that their organisation is meeting its obligations.
If you’re grappling with the complexities of modern awards or simply seeking a sounding board for your thoughts, we are here to help.
