Processes relating to modern awards

Modern awards

Modern awards, together with the National Employment Standards (NES), provide a minimum safety net of terms and conditions for the employees they cover. As at 30 June 2015 there were 130 modern awards, with 122 covering an industry or occupation and eight covering a single enterprise or state reference public sector employer.

4 yearly review

The Fair Work Act requires the Commission to review all modern awards four years after they came into operation on 1 January 2010. The 4 yearly review of modern awards (the Review) commenced in February 2014 and is expected to run until late 2016.

Following the determination of threshold jurisdictional issues, the Review was divided into two stages: the common issues stage and award stage.

The common issues are:

  • annual leave (AM2014/47)
  • award flexibility/facilitative provisions (AM2014/300)
  • casual employment (AM2014/197)
  • family and domestic violence clause (AM2015/1)
  • family friendly work arrangements (AM2015/2)
  • micro business schedule (AM2014/306)
  • part-time employment (AM2014/196)
  • public holidays (AM2014/301)
  • transitional/sunsetting provisions relating to accident pay, redundancy and district allowances (AM2014/190).

Significant decisions in relation to annual leave, inconsistencies with the NES and transitional provisions were issued during the reporting period.

The award stage will deal with the modern awards in four groups. Progress has been made in reviewing the awards in Group One with a number of threshold issues being determined in a decision issued in December 2014. Exposure drafts based on 49 modern awards in Groups One and Two were published for comment during the reporting period, seeking to improve the accessibility of awards, particularly for small businesses and individual employees. The remaining award groups will be dealt with throughout 2015–16.

The Review is a significant and complex body of work. During 2014–15:

  • 40 statements and decisions were issued
  • 107 Full Bench hearings, 279 conferences and mentions were held
  • 2211 documents were posted to the website
  • 429 emails were sent to subscribers
  • 6096 interested persons were registered subscribers to the 'My awards – all matters' service at 30 June 2015.

Modernisation and termination of enterprise instruments

On 31 December 2013 all enterprise instruments in operation terminated unless an application was made to modernise the instrument. Enterprise instruments were former federal or state awards that covered employees in a single enterprise or a group of related enterprises. The Commission estimated there were 1735 enterprise instruments still in operation prior to 31 December 2013.

Of the 141 applications made to modernise enterprise instruments, 38 were yet to be determined as at 30 June 2015. During the reporting period 18 applications were granted and seven modern enterprise awards were made. The terms of four further modern enterprise awards were still to be finalised following the approval of the applications.

Modernisation and termination of state reference public sector transitional awards

State reference public sector transitional awards applied to public sector employees in Victoria and some local government employees in Tasmania. If no application was made to terminate or modernise one of these awards prior to 31 December 2013 the Commission must modernise the award. One state reference public sector modern award was made during the reporting period, with 41 applications yet to be determined. A number of applications were dismissed as the Commission determined that the awards were either enterprise instruments or not operating as state reference public sector transitional awards.

Default superannuation fund terms

The Fair Work Act requires the Commission to conduct a review of modern award default superannuation fund terms every four years (superannuation review). The default fund applies to payments for employees who are covered by the award but have not chosen a fund to receive their superannuation contributions.

As part of the superannuation review the Commission must make a default superannuation list which will contain funds that offer a MySuper product. The Expert Panel will then select products from the list to be included in modern awards. A separate schedule of approved employer MySuper products will be created.

Following a Federal Court decision in June 2014 (re Financial Services Council Ltd v Industry Super Australia Pty Ltd and Anor NSD447/2014) the Review process ceased as it was deemed that the Expert Panel was not properly constituted.

At the end of the 2014–15 reporting period the Commission was awaiting the appointment of an Expert Panel Member to enable it to proceed further with the review of default superannuation fund terms in modern awards.