Changes from 1 July 2016
1 July 2016
From 1 July 2016:
- National Minimum Wage will increase by 2.4% to $672.70 per week or $17.70 per hour
The national minimum wage applies to employees who aren’t covered by an award or agreement.
- Pay rates in modern awards will increase by 2.4%
This pay rate applies to employees whose employment is covered by a modern award and whose minimum pay rates are governed by that award. Employers who pay award rates must check the relevant award to ensure that they are paying their employees according to the award.
If you’re not sure which award applies to you, check the List of awardson the Fair Work Australia website.
- Higher income threshold in unfair dismissal cases will increase to $138,900
Employees who earn more than the high income threshold and who are not covered by a modern award or enterprise agreement are not able to access the unfair dismissal jurisdiction.
In calculating whether an employee’s earnings are above the high income thresholds, the following must be included:
- Money that is paid on their behalf (e.g. superannuation top ups or salary sacrifice)
- The agreed value of non-monetary benefits (e.g. laptop or mobile phone)
- Compensation limit for unfair dismissal claims will increase to $69,450
- The filing fee for dismissals, general protections and anti-bullying applications made under the Fair Work Act will increase to $69.60
Changes to Annual Leave Provisions
The Fair Work Commission has finalised the model terms for provisions in annual leave clauses in modern awards. The provisions which will be inserted in most awards relate to taking annual leave in advance, close-downs, excessive annual leave accruals, cashing out of annual leave and EFT payments during annual leave. In summary, these provisions are:
Granting Annual Leave in advance: Employers and employees can agree for an employee to take leave in advance (i.e. before it is accrued). The agreement must be made in writing and must state the period of leave granted in advance and the amount of leave to be taken. The employer must retain a copy of this agreement. If the employee’s employment is terminated before sufficient leave has been accrued to make up for the leave granted in advance, the employer may deduct any money that is due to the employee equal to the amount already paid to the employee in respect of that annual leave taken.
Close-down: an employer may require an employee to take annual leave as part of a close-down of its operations, by giving at least four weeks’ notice.
Excessive Annual leave: Excessive leave is defined as leave accrued be an employee which is more than 8 weeks’ paid annual leave. The employer and employee can discuss the excessive accrued annual leave to try to reach an agreement on how to reduce this leave. If agreement cannot be reached, the employer can direct the employee to take annual leave, so long as the employee will still have at least 6 weeks of annual leave remaining after the directed amount of annual leave has been taken. The employer cannot direct the employee to take less than one week of annual leave, and the employer cannot direct the employee to take a period of paid annual leave beginning less than 8 weeks, or more than 12 months, after the direction is given.
An employee who has an excessive leave accrual can also request an employer to grant up to 4 weeks of paid annual leave in any period of 12 months providing that they have excessive annual leave accrued for more than 6 months at the time that they make the request. Granting the request must not result in the employee having 6 weeks or less of annual leave remaining. The employee may not take less than one week of annual leave at a time, and this leave must not the taken sooner than 8 weeks or more than 12 months after the request is made.
Cashing Out of Annual Leave: An employer and employee can agree to cashing out a particular amount of accrued paid annual leave. The agreement must be in writing and must state the amount of leave to be cashed out, The payment to be made to the employee and the time that he payment is to be made. There must be a separate agreement for each occasion when annual leave is cashed out. The agreement has to be signed by the employer and the employee and retained as an employee record. The payment must not be less than the amount that would have been payable had the employee taken the leave at the time the payment is made. Cashing out of annual leave must not result in the employee’s remaining accrued entitlement to paid annual leave being less than 4 weeks. The maximum amount of accrued paid annual leave that may be cashed out in any period of 12 months is 2 weeks.
EFT and annual leave payments: An employee paid by electronic funds transfer (EFT) may be paid in accordance with their usual pay cycle while on paid annual leave.
What employers should do
If you pay award wages to your employees, check the applicable awards to ensure that they are being paid correctly.
When the annual leave provisions are finalised, check that the provisions in your conditions of employment match the new annual leave provisions. Inform your workers of any changes to their awards and make a copy of the relevant awards available to them.
You can find out more about minimum award wages and annual leave provisions, from the following links:
Annual Wage Review 2015 - 16
31 May 2016
The Fair Work Commission’s Expert Panel (panel) handed down its decision on the National Minimum Wage and of minimum wages in modern awards following its annual review (Annual Wage Case 2015-16).
The Panel has determined that it is appropriate to increase the National Minimum Wage by 2.4%. The national minimum wage will be $672.70 per week or $17.70 per hour. The hourly rate has been calculated by dividing the weekly rate by 38, on the basis of the 38-hour week for a full-time employee. This constitutes an increase of $15.80 per week to the weekly rate or 41 cents per hour to the hourly rate.
The Panel has also determined that there will be an increase of 2.4% to modern award minimum wages.
In making its decision the Expert Panel is required to take into account the economy, social conditions, the labour market, relative living standards, the needs of the low paid, collective bargaining and equal remuneration.
These increases will come into operation on 1 July 2016. Weekly wages will be rounded to the nearest 10 cents.
Read the full decision Annual Wage Review 2015–16
Changes to Parental Leave
1 January 2016
Statutory entitlements to parental leave come from the Fair Work Act, National Employment Standards (NES). Unpaid parental leave is available to full-time, part-time and long-term casual employees (including employees in Western Australia whose employer is unincorporated).
Parental leave includes unpaid maternity leave, paternity leave and adoption leave. Each parent is entitled to be absent from work for separate periods of up to 12 months unpaid parental leave. An employee who takes 12 months of parental leave may request additional leave from their employer for up to 12 months.
Up till the 27 November 2015, an employer could refuse an employee's request to extend parental leave on "reasonable business grounds", giving the employee a written notice of the reasons for refusal within 21 days of the request being made.
From 27 November 2015 employers must to provide the employee requesting an extention to parental leave with a "reasonable opportunity" to discuss that extension prior to any refusal by the employer. The employer must take into account matters raised during the discussion before deciding whether or not to grant the extension.
Although there is no definityon of "reasonable opportunity", giving the employee reasonable opportunity would mean giving the employee sufficient time to allow them to make arrangements to meet with the employer. The meeting can be face-to-face, by phone or by any other means that may be convenient to the employee.
The aim of this change is to allow the employer and the employee to discuss the requret for extension of parental leave with a view to coming to an arrangement that will be suitable for all parties.
Changes from 1 July 2015
1 July 2015
From 1 July 2015
- National Minimum Wage will increase by 2.5% to $656.90 per week or $17.29 per hour
- Pay rates in Modern Awards will increase by 2.5%
- Higher income threshold increases from $133,000 to $136,700
- The filing fee for dismissals, general protections and anti-bullying applications made under the Fair Work Act will increase to $68.60
- Compensation limit for unfair dismissal claims will increase from $66,500 to $68,350
- Superannuation guarantee maximum contribution base (per quarter) will increase from $49,430 to $50,810.
- A new Fair Work Information Statement will be available from the Fair Work Australia website.
From 31 July 2015
- The value of a penalty unit (in legislation) will increase from $170 to $180
Issues for 2015-16 Financial Year
- Decisions on common issues arising from the 4-yearly review of Modern Awards.
- Annual leave: There will be changes to clauses in modern awards covering the cashing out of annual leave, granting annual leave in advance, direction to take annual leave, EFT payment of annual leave. Further information regarding proposed amendments can be obtained from the Fair Work Australia website
- Casual and part-time employment: Discussions regarding minimum period of engagement, payment of casual loading, pattern of work, fixation of hours of work and overtime.
- Family-friendly work arrangements and domestic violence clauses.
- Public holidays.
- Changes to Government Paid Parental Leave scheme: If the Fairer Paid Parental Leave Bill 2015 is passed then parents who receive employer-funded paid parental leave may not be entitled to payments under the Government Paid Parental leave scheme. The proposed changes to the Government Paid Parental leave scheme will come into effect from 1 July 2016.
The Office for Employment Relations can provide you with assistance on this and other employment related matters. Please contact Jane Bashiruddin at the Office for Employment Relations on 03 9934 3355