It is important to be aware that modern awards will:

1.      Have general application to all federal system employers;

2.      Allow for individual flexibility arrangements; and

3.      Contain a dispute resolution mechanism allowing for referral of disputes to Fair Work Australia.

Modern awards will cover every federal system employee (other than those guaranteed of earning more than $108,300 per annum).  At the moment, many federal system employers are not covered by any federal award or at least some of their employees are not covered by a federal award.  This will all change from the beginning of 2010.  At present, there are about 6,000 federal awards and this will be reduced to about 150 under the new system.  This will mean awards of more general application and content.  Modern awards are being structured mainly along industry lines with some occupational awards (such as for nursing) and a general “catch-all” award.  One of the criticisms which has been made of the process is that it will mean higher rates of pay, particularly casuals, for some employers.

Another major feature is the “individual flexibility arrangement”.  This will enable an employer and employee to agree in writing to vary an award, such as for overtime arrangements.  It is a prerequisite that employees be “better off overall” under this arrangement than the applicable award. 

Whilst the number of awards is being reduced, it is still likely that several awards will apply to any one workplace.  Employers should find out which modern award/s will apply to them and start making arrangements to comply when they come into force.  A full list of modern awards and industries can be found at www.airc.gov.au/awardmod/.

If employers consider that the requirements will cause immediate hardship, it is possible to apply for a “phasing in order” for the modern award to come into force over time.  However, it is also possible for employees (and their unions) to make application for a “take home pay order” to ensure that their pay does not drop below the award standard. 

A detailed paper setting out the changes is available on our website and can be accessed from the following link: http://www.workplace-lawyers.com.au/download/Newsflash%20Employment%20Law%20paper%20200609.pdf.  It can also be viewed or downloaded from our website at http://www.workplace-lawyers.com.au/white-papers-for-review.html.