Modern awards commence from 1 January 2010 and cover most businesses in the national workplace relations system. Modern awards were created to establish one set of minimum conditions for employers and employees across Australia who work in the same industries or occupations.
Most modern awards contain transitional provisions which allow wages and penalty rates which are higher or lower than pre-existing conditions to be progressively introduced in 5 annual instalments from 1 July 2010.
However, a few modern awards (non-phased modern awards) contain no transitional provisions at all. Where there are no transitional provisions, the full terms of the modern award apply from 1 January 2010.
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What is the role of modern awards in the national workplace relations system?
Modern awards together with the National Employment Standards (NES), which also commence on 1 January 2010, and the national minimum wage orders made by Fair Work Australia, make up a new safety net for employees covered by the national workplace relations system.
Employers and employees need to know:
- modern awards replace existing:
- federal (pre-reform) awards (except those applying to a single enterprise)
- notional agreements preserving state awards (NAPSAs)
- state reference transitional awards
- modern award wages start on 1 January 2010 (where the modern award contains no transitional provisions)
- transitional provisions in most awards mean that rates of pay and other conditions do not come into force until 1 July 2010 and may be phased in over 5 annual instalments.
Employers and employees need to be prepared.
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Who’s covered by a modern award?
Modern awards cover employers and employees in the national workplace relations system. Most employers and employees previously operating under an award or a pay scale are covered by a modern award.
Modern awards are industry or occupation-based, and apply to all employers and employees who perform work covered by a particular modern award.
However, employees who are paid a guaranteed amount of $108,300 a year (indexed annually) are not covered by a modern award. Many managers and higher income employees may not be covered by a modern award - even if there is a relevant modern award for their industry.
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What’s in a modern award?
From 1 January 2010, modern awards operate with the National Employment Standards (NES) and regulate minimum terms for a specific industry or occupation.
Modern awards can contain terms relating to:
- minimum wages, including piecework rates
- types of employment (eg. full-time, part-time, casual)
- overtime and penalty rates
- work arrangements (eg. rosters, variations to working hours)
- annualised wage or salary arrangements
- allowances (eg. travel allowances)
- leave, leave loading and taking leave
- superannuation
- procedures for consultation, representation and dispute settlement
- employing outworkers and the work they perform
- an industry-specific redundancy scheme.
In addition, they must also have a flexibility term, which means employers and employees are able to negotiate changes to meet their individual needs relating to issues specified in the clause.
Most modern awards contain transitional provisions which allow wages and penalty rates which are higher or lower than pre-existing conditions to be progressively introduced in 5 annual instalments from 1 July 2010.
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What am I required to do under modern awards?
Employers and employees should be aware of the modern award that may apply to the work they do, and how this affects their pay rates.
They should also be aware of any terms and conditions of employment that have changed, and if there are any transitional arrangements which may affect these changes.
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Which modern award (or other arrangement) am I covered by?
Finding your modern award can be complex - it depends on factors including your job type and duties, your pre-modern award instrument and who your employer is.
Alternatively, you may be covered by an industrial agreement (either an enterprise agreement or an agreement made under the Workplace Relations Act) rather than a modern award -though you still may be covered by a modern award.
Or there may be no modern award that covers you and you may be covered by a pre-modern award (either a federal award, a NAPSA or a state reference transitional award) and a Pay Scale, or the national minimum wage.
In all cases the National Employment Standards (NES) apply.
To find out what you’re covered by, call the Fair Work Infoline on 13 13 94 or chat online with our 
Live help advisor.
Find out what you are covered by:
You'll need to know some basic details about your award to find it.
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Do modern awards reduce my take-home pay?
Modern awards and transitional provisions are not intended to reduce an employee’s take-home pay. If an employee believes their take-home pay has been cut, they can apply to Fair Work Australia to make a ‘take-home pay order’ to make sure their pay is not reduced
If the modern award contains lower wages and/or penalty rates, employers should be aware that their employee’s overall take-home pay is not reduced.
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I’m an employer, what if I get something wrong?
The Fair Work Ombudsman can provide you with information, education and advice about your obligations. The Ombudsman can help you determine correct entitlements under a modern award and assist you in complying with workplace laws.
However, under the Fair Work Act 2009, penalties of up to $6600 for an individual and $33 000 for a corporation may apply to a breach of a term of a modern award or the National Employment Standards (NES).
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Where can I get further information?
For further information on modern awards or other rights and obligations under the national workplace relations system, contact the Fair Work Infoline on 13 13 94 or chat online with our Live help advisor.
For information on the award modernisation process, contact Fair Work Australia on 1300 799 675.
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