A major part of setting up a business is finding the right employees. Most business will require a number of employees across a range of roles. For example, a large manufacturing business may have not only staff dedicated to manufacturing, but also support staff, and other employees in roles not related to the physical manufacturing process, such as administration and HR. While employing people in your business, it is likely you will encounter the term Award, but what is an Award, and how does it apply to your business? This guide will provide you with an understanding of how awards function, as well as how it might apply to employment relationships between your business and your employees.
WHAT IS AN AWARD?
An award is a legal document created by the Fair Work Commission (FWC) to set minimum terms and conditions of employment for employees working in particular fields or industries. The power to make this document derives from the Fair Work Act 2009 (Cth) and allows the FWC to both create, review, and enforce these documents where there is a need for an award to regulate an industry. They set minimum standards regarding things such as:
- Wages;
- Working hours and conditions;
- Overtime;
- Leave;
- Qualification Requirements; and
- Allowances.
APPLYING AN AWARD TO YOUR EMPLOYEES
The first place to start, before hiring an employee in a specific role, is to use the Fair Work Award Finder Tool (see here). This tool will help you find whether there is an appropriate award for your industry. Once you have found the appropriate award, it is important to search the document to ascertain whether the role you are trying to fill is described in the award. This is often listed under the heading “Classification” where the award lists the types of employees covered by the award and how they are classified, however, this can change between awards. These classifications can be based on the type of work being performed, the experience of the employee, the education or certificate level of the employee, or by a combination of these factors. It is entirely dependent on your particular industry and how the FWC has decided to regulate that industry. At Eleven Legal, we can help you with your employment contracts, and your procedures, to ensure that you are compliant with any applicable award.
HOW DO AWARDS WORK WITH THE NATIONAL EMPLOYMENT STANDARDS?
It is important to remember that there is not an award for every industry. There are industries which do not have an award, therefore the National Employment Standards (NES) will apply. These employees not covered by an award are designated as “Award free” and therefore the NES and any employment contract they sign, are the terms and conditions of their employment.
The NES are 10 minimum entitlements that all workers in Australia are entitled. These include minimum entitlements in relation to the following:
- Maximum weekly hours
- Requests for flexible working arrangements
- Parental leave and related entitlements
- Annual leave
- Leave
- Community service leave
- Long service leave
- Public holidays
- Notice of termination and redundancy
- Fair Work Information Statement
More information regarding these minimum entitlements can be found here.
MISCELLANEOUS AWARD
While most workers which are not covered by an award are designated as “award-free”, it is important to consider that in certain types of work, where the specific industry does not have an award the Miscellaneous Award applies. The Miscellaneous Award was designed for minimum wage workers, and manual labourers, who are not covered by any other award.
HOW ELEVEN LEGAL CAN HELP?
Here at Eleven Legal, we have significant experience in creating Employment Agreements, tailored for employers across a range of industries. We can help you set up the very foundational documents you will need to ensure that your business operates as efficiently as possible. Getting your employment contracts correct gives you the best chance to ensure that you are compliant with the law, and do not commit any underpayment of staff of wages or entitlements which could result in legal action against your business. The legal penalties for breaching your obligations under the Fair Work Act can extend beyond the business, with personal penalties also applicable. Please contact our friendly team at Eleven Legal so that we can guide you through the process.
