In a recent post, I spoke about how the award modernisation has failed to deliver on one of its statutory objectives: “…a simple, easy to understand, stable and sustainable award system..”.

I see three primary problems with the award system:

  1. Awards are too complicated and not easy to understand
  2. Because different awards apply to different occupations, employers can have to apply different conditions of employment to different categories of employees
  3. In some cases, award conditions are outdated or unfair

Within individual awards, the Fair Work Commission sensibly put in place phased adjustment of some conditions so as to get employees in an industry across the country on to a common set of conditions. They used annual wage reviews to cushion the impact on those whose entitlement was nominally reducing. They also did this with phased adjustments to penalty rates in some industries. What if they took this a step further and did it across all awards to provide one standard set of conditions for all award-covered workers?

Perhaps we could have a system where the core conditions of employment for all workers in an enterprise are the same based on the industry that the business operates in rather than the occupation of the employee.

Let’s take the case of an artwork manufacturer and wholesaler who has a designer covered by the Graphic Arts Award, a framer covered by the Manufacturing and Associated Industries and Occupations Award, a driver covered by the Road Transport and Distribution Award and an administrator covered by the Clerks – Private Sector Award. So there are 4 employees and 4 awards with different conditions of employment.

So let’s reimagine the system to see what it might look like:

  1. We already have the 10 National Employment Standards that apply to everyone under the Fair Work Act
  2. We could then have National Award Standards that apply to every award covered employee and these could include:
    • ordinary hours of work
    • shiftwork and shift allowances
    • overtime hours and loadings
    • penalty rates on evenings, weekends and public holidays
    • common allowances such as first aid allowance, vehicle allowance, meal allowance, etc
    • annual leave loading
    • annual leave – advance, cashing in and direction to take and closedowns
    • termination of employment and redundancy
    • consultation arrangements
    • dispute resolution arrangements
    • individual flexibility agreements
    • other conditions that are common across awards
  3. Industry/occupational specific schedules of minimum rates of pay, allowances and special rates that are peculiar to the occupation or industry.

There would be some changes required to get all award employees on to the same conditions eg some awards have overtime at 1.5 times for the first 2 hours and some have it for the first 3 hours. Let’s just make it the first 2.5 hours and phase the changes in for everyone just as the Fair Work Commission did with penalty rates etc in some industries.

The other alternative as noted above would be to designate one award for all employees in a business based on the primary activity of the business. The minimum rates for the occupation could be drawn from the relevant occupational award but otherwise conditions are common for all award covered employees in a business. There is some precedent in this regard. Before modern awards were introduced, the Transport Workers (Mixed Industries) Award allowed for drivers to pick up the conditions applying to most workers in the business.

Either of the approaches noted above would massively simplify compliance for employers and provide fair and equal conditions for their employees. It just requires a bit of imagination and common sense plus the parties involved in the process having the will and the courage to change.