The beginning of the financial year marks a number of important to changes to the employment law area. These changes, relate to minimum wages, penalty rates, the unfair dismissal threshold, annual leave and the Fair Work Information Statement. A summary of the changes to come into force from 1 July 2017 are outlined below.
National Minimum Wage and Modern Award Wages
Each year the Fair Work Commission (“FWC”) performs a review on the national minimum wage and pay rates within all industries. In this regard, the FWC has announced an increase to minimum wages by 3.3% which has now set the national minimum wage to $694.90 per week or $18.29 per hour effective from 1 July 2017.
In accordance with the national minimum wage review, all Modern Awards will also increase by 3.3% effective from 1 July 2017. This means that all Modern Award covered employees (including apprentices and trainees) who are receiving the Modern Award minimum pay must receive a pay increase of 3.3%. Modern awards have been amended to reflect the increase to wages. We encourage all employers to review their current wages and ensure the business is paying employees correctly and in accordance with the amended award wage rates, to avoid incurring any liability.
On 23 February 2017, the FWC handed down a decision to vary certain penalty rate provisions in some awards for the hospitality, retail and restaurant industries. The decision affects penalty rate provisions for some permanent and casual employees working Sundays, public holidays, evening or after midnight.
The Modern Awards effected by the penalty rate changes include the following:
• General Retail Industry Award 2010 [MA000004];
• Fast Food Industry Award 2010 [MA000003];
• Restaurant Industry Award 2010 [MA000119];
• Pharmacy Industry Award 2010 [MA000012];
• Hospitality Industry (General) Award 2010 [MA000009].
The changes will be phased in over 3 or 4 years, depending on the award and employment type. However, changes to public holiday penalty rates will start from 1 July 2017 as well as the changes to evening work and after midnight penalties in the Restaurant and Fast Food Awards. The changes to Sunday penalties will be introduced transitionally with the first phase rolled out on 1 July 2017. We encourage employers within these industries to review the changes and ensure they are keeping up to date with the transitional arrangements. For further information on the transitional arrangement please refer to: https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/2017fwcfb3001-summary.pdf
Unfair Dismissal Threshold
The rules that determine whether an employee is entitled to bring a claim for unfair dismissal under the Fair Work Act 2009 (Cth) state that employees who earns more than the high income threshold and who are not covered by a modern award or enterprise agreement, cannot make an unfair dismissal claim.
Whether an employee is protected under the unfair dismissal scheme may have significant impact on an employer’s ability to dismiss an employee and the process and potential risks of doing so.
The Fair Work Commission have announced that the high income threshold will increase to $142,000 per annum from 1 July 2017.
Notice of taking annual leave by employee
The FWC has varied some awards to allow employees with excessive leave balances rights to give written notice to the employer requesting to take paid annual leave, in circumstances where they have been unable to genuinely reach an agreement. These changes will take effect from 29 July 2017.
Fair Work Information Statement
The Fair Work Act 2009 (Cth) requires that an employer provide all new employees a copy of the Fair Work Information Statement as published by the Fair Work Ombudsman before they start employment or as soon as practicable after their employment commences.
The Fair Work Information Statement provides employees information about their rights and conditions of employment. A new Fair Work Information Statement is published each year to reflect the amended high income threshold.
With a number of the above changes introduced this year, it is imperative for employers to ensure they are reviewing applicable Modern Awards and taking steps to implement the changes. This includes ensuring payroll and accounts departments also understand the key changes for the new financial year.
If you wish to discuss any aspect of this article or require specialist advice or assistance in relation to your employment relations framework, please do not hesitate to contact us.
This alert is not intended to constitute, and should not be treated as, legal advice.