When you are employing workers, it is important to ensure that you understand the applicable Awards and be sure that any employment arrangements you do have in place meet the requirements. While the National Employment Standards cover all employees, only some roles are covered by an Award. There are over 120 Awards which cover many different industries.

In a recent finding, the Fair Work Ombudsman found that employers were not meeting their obligations in line with the Restaurant Industry Award and as such, underpaying their workers. The restaurant was required to back-pay the entitlements that they had not met.

As an employer, it is important to be aware of the Awards that apply to your industry and positions that you employ people in. Awards range across many industries and types of roles. If you are unsure as to which applies to your industry, the Fair Work website provides a searchable directory of Awards.

Offset Clauses in Employment Agreements

You should also ensure that your employment agreement addresses any applicable Awards and that your rates of pay, hours of work and other requirements satisfy the Award. If you are paying above an Award rate, you may, in some situations, offset this against other entitlements.

Importantly, you should consider the recent decision of the Fair Work Commission Full Bench [2015] FWCFB 6656 when drafting these offset clauses. Your Agreement should clearly state that you will offset other entitlements against the overpayment of the Award rather than assume it is otherwise covered elsewhere.

If you previously relied upon this clause in your employment agreements, you should have an employment lawyer review the clause so that you can be sure it correctly addresses Awards and Award offsetting.

When seeing whether an Award applies to the role, you should review the Award to see whether it covers your industry under the “coverage clause” and then find the appropriate “job classification” for the job the employee is doing.

The Restaurant Industry Award

If Sally is a waiter in a restaurant, she will be covered under the Restaurant Industry Award and could be classified as a B.2.4 Food and Beverage Attendant Grade 3 due to her experience level and the work that she is required to undertake.

The Restaurant Industry Award addresses issues such as:

  • Consultation and Dispute Resolution;
  • Types of Employment and Termination of Employment;
  • Minimum Wages and Related Matters;
  • Hours of Work and Related Matters; and
  • Leave and Public Holidays.

The Award also address:

  • Industry Specific provisions (such as what happens when a staff member breaks or damages property at work);
  • Transitional provisions;
  • Classifications and wage support systems;
  • National training wage;
  • Allocation of traineeships to wage levels;
  • Apprentices; and
  • Part-day public holidays.

The requirements of your Award affect the day to day running of a business. For example, if Sally were to drop a glass when taking them back to the kitchen, under the Restaurant Industry Award, the restaurant would not be able to deduct Sally’s pay the $4 the glass cost unless the glass was broken “in the case of wilful misconduct.”

Again, if Sally was having a fight with the manager and threw the glass on the floor in a rage, then the employer may be able to deduct the employee’s wages for the cost of the glass in those circumstances.

Key Takeaways

Whatever your industry, it is important to be sure that you are complying with any applicable Awards. As an employee, you should also be across any Awards so that you can be comfortable that you are receiving the appropriate wage and entitlement for your Award type and classification.

Confirming your obligations before hiring employees reduces the risk of non-compliance and having to pay back to your employees if the business is held to be non-compliant. If you have any questions about Awards or employment agreements in general, get in touch with our employment lawyers or call 1300 544 755.

Edith Moss

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