Award changes for Engineers, IT and other professionals

The Fair Work Commission is proposing to vary the Professional Employees Award 2020 in two main areas.

The first is to clarify award coverage and the second is to introduce new provisions on hours of work and overtime.

This Award covers professional engineers and scientists generally as well as other professionals working specifically in the IT, quality auditing, telecommunications services and medical research industries.

Award coverage

One of the questions that often arises with modern awards is where does coverage end when it comes to roles which might have supervisory or managerial responsibilities. 

With this Award variation, the FWC has decided to specifically exclude employees who are “employed in a wholly or principally managerial position”.

Of relevance here is the fact that Award coverage does include supervisory functions exercised while engaged in professional engineering duties as distinct from being “employed in a wholly or principally managerial position”. 

So this differentiation is something that could be subject to different interpretations especially in smaller organisations where someone might be both the lead practising professional and a member of the senior management group.

Given that Award coverage is one of the determinants of eligibility to make a claim of unfair dismissal, we can expect that this might be the subject of occasional arguments on jurisdiction.

Hours of employment and overtime

The Award does not currently have specific overtime provisions although it does provide some guidance on when additional remuneration might apply and what form that might take if an employee works more than the 38 ordinary hours per week that applies under National Employment Standards. 

This variation changes that with a requirement to make payment for all hours worked in excess of 38 hours per week plus a set of penalty rates:

• 25% on hours worked before 6.00 am or after 10.00 pm on Monday to Saturday
• 50% on hours worked on Sundays or Public Holidays

 Employers will also have to maintain records of hours worked in excess of 38 hours per week and during the above “penalty rate hours”.

Plus there are special provisions relating to the application of Time Off in Lieu (TOIL) where an employee wishes to use that option in relation to extra hours worked.

An exemption

An employee is exempt from these requirements if they are paid an annual salary at least 25% above the Award rate for their role.

What should employers do?

Firstly note that, at this point in time, the proposed variations are not operational and orders have not been finalised – but we anticipate that it won’t be too long before that happens and these changes take effect.

One thing that we know is that many employers think that their salaried professional employees do not attract award coverage. Think again – many do under this Award or a number of others. We suggest that you:

1. Look at the classification structures in the Professional Employees Award 2020 – see Schedules A and B towards the back of the Award document. 
2. Determine whether employees fit in that structure and, if so, at what levels
3. Assess how their actual remuneration compares to the Award rates for their classification
4. Review the hours that your professional employees work and when they work them
5. Compare their current remuneration against what they would receive under the Award once the new provisions and penalty payments come into effect
6. Examine what their contracts of employment and your relevant HR policies say on the subject 

 They are the things that we would do if you need advice on how to deal with this issue and any changes that you need to make in any of those areas.

If you need a hand give us a call on 1300 108 488 or email enquiries@ridgelinehr.com.au.