Many of us find ourselves in situations we didn’t expect during our employment. We commence in positions assuming that we will have certain rights and responsibilities, that our salary will increase and that we will continue to work in the office in which we began. However, in this age of rapid change and shifting economic sands, employment conditions are not always as black and white as they seem. In this article on Employment law, we will discuss some common obligations as an employer, how they affect employees, and what you can do if you find yourself in similar situations.

The Australian Workplace Landscape

The provisions of the Commonwealth Fair Work Act 2009 (Cth) (FWA) cover most employees in Australia (with the exception of some individuals employed by the public sector and, in most jurisdictions, local government employees). 

Along with the introduction of the FWA came the simplification of the award system and the introduction of the “Modern Award”.

What is a Modern Award?

Under the new workplace relations laws brought in by the Fair Work Act, employees are entitled to certain minimum standards that are set out in the National Employment Standards or “NES”. The NES covers matters such as the granting of parental leave, flexible working practices, and annual leave requirements. The NES applies to all individuals who are covered by the Fair Work Act.

In addition to the NES, there are Modern Awards that cover various occupations and industries, and set out the minimum standards that apply to individuals who are covered by that Award. These minimum standards include specifying exactly the minimum wage for individuals who routinely do various tasks, maximum working hours, required additional annual leave, and other appropriate standards unique to a particular occupation.

If a modern award applies to the type of work that you do, your employer must follow the terms and conditions set out in that Award. The only exception is if you agree with a variation of these terms (the details of which we will discuss more below).

How do I know if a Modern Award covers me?

The Fair Work Ombudsman is the body who governs the application of the FWA across Australia.

You can search on the website for an Award that may apply to your industry, check it out here.

Modern Awards apply to most industry types. However, some individuals are excluded from coverage by these if they either:

  • Have a managerial role; and/or
  • Earn above a certain level of income (from 1 July 2015 this threshold was $136,700).

Can the terms of an Award that applies to me be varied?

The terms of an Award can be varied if both the employee and employer agree to do so, as long as the varied Award conditions leave the employee “better off overall” than they were under the Award.

There are only some provisions of an Award that can be varied and these are:

  • Overtime and penalty rates;
  • Allowances;
  • Leave loading; and
  • What working hours an employee must work.

Terms that are prohibited from being included in variations to an Award include but are not limited to the following examples:

  • A term that may exclude an employee from the unfair dismissal provisions of the Act;
  • A term that may enable an employee to be discriminated against on certain grounds; and
  • Any term that could be seen to contravene the ‘general protections’ provided by the Act.

An example of a typical award variation is to pay any penalty rates. Often employers will offer to pay employees a set weekly rate inclusive of various loadings. So whether or not the employee works the additional hours in any payment cycle, the employer may absorb these costs by “buying out” all the possible variations of an employee’s hours. Overall the employee will be getting a higher rate of pay every week even if they do not work the additional hours, which balances out the times when the employee is required to work extra hours.

What should I do if I think my Employer isn’t complying with a Modern Award that applies to me?

All Awards contain a term that describes what should be done if there is a dispute between you and your employer – commonly entitled a “Dispute Resolution” clause.  These usually required that you try and resolve the conflict within your workplace, but that should no resolution be reached, you may refer the dispute to the Fair Work Commission.

An example of a Dispute Resolution Clause from a Retail Award is set out below: 

  1. In the event of a dispute about a matter under this award, or a dispute in relation to the NES, in the first instance the parties must attempt to resolve the matter at the workplace by discussions between the employee or employees concerned and the relevant supervisor. If such discussions do not resolve the dispute, the parties will endeavour to resolve the dispute in a timely manner by discussions between the employee or employees concerned and more senior levels of management as appropriate.
  2. If a dispute about a matter arising under this award or a dispute in relation to the NES is unable to be resolved at the workplace, and all appropriate steps under clause 9.1 have been taken, a party to the dispute may refer the dispute to the Fair Work Commission.

Why does it matter if a Modern Award applies to my employment?

You should be aware if an Award applies to your employment, as there may be benefits and provisions in it that you are not currently receiving.


If you would like further advice about the applicability or construction of an Award, please contact LegalVision on 1300 544 755.

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