Are modern awards too complicated?

The award modernisation process provided a wonderful opportunity to really simplify workplace relations compliance and the abilities of both employers and employees to understand the rules of employment in Australia and in their industry and in their particular circumstances.

It was successful in reducing thousands of federal and state awards to 122 modern awards which is great.

However, it has done little to simplify the actual content of awards or to get consistency between different awards which could apply side by side in a business. In fact, the process has failed miserably in really “modernising” awards…….and, as for the 4 yearly review which commenced in 2013/14, the government amended the legislation to get rid of that requirement as the Fair Work Commission really couldn’t start the second one before they finished the first…….and the first one is still going.

In the recent George Columbaris underpayment case, his supporters have blamed the complexity of the Restaurant Industry Award 2010 as a factor in non-compliance. That doesn’t hold any water in our view for a business of that size (especially as George has a long history of campaigning against penalty rates so he obviously knew about them) but there is no question that it is true in small businesses.

Most people open a business with the best intentions and want to do the right thing. As their businesses grow, they need people and that’s when they are confronted by the complexities of our workplace relations system. We help them deal with these complexities every day and, even though we do (and are better at it than most), we are challenged from time to time in understanding just what an award clause really means.

To illustrate the point of the complexity, let’s go a step beyond the restaurant industry into the construction industry which, by the way, is really important because of our reliance on infrastructure to drive the economy. Here is a little sample of what you’ll find in the Building and Construction Industry On-site Award 2010:

  • For weekly employees, minimum wages are seemingly prescribed in Clause 19.1 for each classification level
  • However, when we look further there are at least 3 and up to 8 allowances that have to be added to work out the ordinary time rate
  • To find out what a Level 1 or Level 2 etc is, I have to go to Schedule B (if I knew that was there) to read the descriptors for each classification level and work out where my employee(s) fit
  • Then there are a stack of other allowances and special rates that could apply and they are dealt with in different ways eg
    • some are a % of the hourly standard rate per hour,
    • some are a % of the weekly standard rate per week,
    • some are a % of the weekly standard rate per day,
    • some are a % of the hourly standard rate per day
    • and I have to go to the Definitions clause to find out what the Standard Rate is and
    • there are a variety of other allowances dealt with in different ways
  • There are fares and travel allowances of at least $17.43 per day that employees get for attending work (yes, just for turning up) and they also get them on RDOs and in calculating annual leave loading
  • There is an Industry-Specific Redundancy Scheme which (among other things) provides that an employee who voluntarily leaves (yes, resigns) after having served a year of employment is entitled to a redundancy payment of up to 8 weeks’ pay
  • This clause also provides that an employee who is terminated by the employer for reasons other than “misconduct or refusal of duty” after just 1 week of service is entitled to a redundancy payment of 1.75 hours per week of service – so you put someone on for a trial for a couple of months, they are not up to the job and you have to pay them extra on termination for failing to meet performance expectations.

That is just a snapshot but illustrates how ludicrous it is to expect a small business owner who knows excavators (not employment law) to comply.

It also shows how patently unfair some of these conditions are.

These are the issues that the award modernisation should be dealing with – simplification and fairness in a modern workplace.

That unfortunately is not happening because the players are still living in the last century – we won’t get a different outcome using the same old tired IR process which created the award complexity problem in the first place…….and that is why the first four yearly review is still going with little to show in the way of “modernisation”.

Next we are going to propose a different way of