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Employment Law Newsletter - NFP Focus - October 2009

Employment Law Newsletter – NFP Focus – October 2009

Published on February 14, 2011 by Mick Sheils OAM and Peter PunchMick Sheils OAM and Peter Punch

Clients who attended our briefings for “Not for Profit” organisations in June of this year were given a comprehensive overview of how the Modern Awards and the National Employment Standards(NES) will affect your organisation upon their implementation on 01 January 2010.


As it is intended that the next client briefings on this subject will be held in February 2010 it is important that if your organisation has any particular concerns about the implementation of Modern Awards and the NES and how they might impact on your operations you should not hesitate to contact our Peter Punch or Mick Sheils to arrange an appointment to discuss your concerns with us. The implementation date is just two months away and of course with the Christmas holidays intervening there is little time left to prepare for implementation.


It is timely to remind our clients that if you have received advice that your organisation is a “trading corporation” within the meaning of that expression in Section 51 (xx) of the Australian Constitution then you are a “Federal System Employer” under the provisions of the Fair Work Act, 2009 (Cth) (“theFW Act”) and modern awards and the NES will apply. Further if your organisation was covered by a State award, which became a Notional Agreement Preserving State Award (“NAPSA”) under the Workchoices legislation, then the terms and conditions of the NAPSA will no longer apply from 01 January 2010 and will be replaced by the terms and conditions of the relevant modern award(s) and the NES.


The Australian Industrial Relations Commission is inserting transitional provisions into modern awards which provide for a phasing in of rates of pay, shift allowances and casual loadings. These provisions are of recent origin and were not known at the time of our June briefings.
Under the transitional provisions, rates of pay prescribed by modern awards will not take effect until 1 July 2010 and then there will be a five (5) year adjustment period for these rates compared to existing rates. This adjustment period will apply to not only those employees who are receiving less than the relevant NAPSA rates as at 1 July 2010 but also to those employees receiving more. Shift allowances and casual loadings are to be adjusted in the same manner.

In relation to modern award rates that are less than current rates there is provision in the FW Act for an application to be made to Fair Work Australia for a “Take Home Pay” order to be made, which if granted will ensure that there is no reduction in the current rate of pay being received. You may need to seek advice as to how to respond to such an application if it is made by your employees or the Union.

As can be seen the introduction of transitional provisions has added a further complexity for employers to deal with and our clients need to be aware of and plan for the phased implementation of rates of pay, shift allowances and casual loadings. Further, clients should be aware that apart from these matters all other conditions of employment contained in NAPSAs will cease to exist from 01 January 2010 and be replaced by modern award provisions and the NES.


One way for employers to overcome these complexities is to enter into a workplace agreement with its employees or with the relevant union(s). We would be pleased to provide advice and assist you to develop a suitable agreement to cover all of your employees rather than relying on the terms and conditions of one or more modern awards.

Finally, as we advised earlier in this bulletin time is quickly running out in relation to the implementation of modern awards and the NES and we urge every client to review its position as to whether it has properly prepared for the significant changes to take effect from 01 January 2010.

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