Awards

An award is a legal document that sets out minimum wages and conditions for an industry or occupation. Awards cover things like rates of pay, overtime, penalty rates and allowances. The conditions in awards apply on top of the minimum conditions in the National Employment Standards.

Award modernisation is the replacement of thousands of different awards in Australia by a simpler system of 122 modern awards.

Modern awards cover most employers and employees in the national workplace relations system.

On 1 January 2010, 122 modern awards replaced most federal awards, NAPSA and state reference transitional awards. The wages, penalty rates and loadings in the new awards are being phased in in 5 stages from 1 July 2010 to 1 July 2014.

Most modern awards began on 1 January 2010. For employees under Division 2B State Awards, modern awards began on 1 January 2011.

Most people in the national system are covered by a modern award. You may not be covered by a modern award if:

  • an enterprise agreement applies to you. You’ll need to read it to find out whether it completely replaces the modern award or not.
  • there is no modern award that covers your industry or occupation.

Finding the right modern award for your job depends on a number of things, including the job you’re doing, your duties and who you’re working for.

If you run a business you might find that different modern awards apply to different employees - eg. the Building and Construction General On-site Award 2010 might apply to your on-site employees while the Clerks - Private Sector Award 2010 might cover your administration staff.

See the How to find an award page for information about finding which award applies to you.

Modern awards have minimum conditions of employment for employees who they apply to. These conditions can include:

  • minimum wages, including piecework rates
  • types of employment (e.g. full-time, part-time, casual)
  • overtime and penalty rates
  • work arrangements (e.g. rosters, working hours, flexible working arrangements)
  • annual wage or salary arrangements
  • allowances (e.g. travel allowances)
  • leave and leave loading arrangements
  • superannuation
  • procedures for settling disputes
  • rules for employing outworkers
  • redundancy arrangements.

Check your modern award to see the conditions that apply to you.

All modern awards have a ‘flexibility term’. This means that employers and employees can negotiate certain conditions to suit themselves. These negotiated arrangements are called individual flexibility arrangements.

You also have to meet the National Employment Standards. These set out minimum conditions for employees in the national workplace relations system.

If you’re not covered by a modern award, the following still apply:

  • the national minimum wage
  • the minimum conditions in the National Employment Standards.

You might also be covered by:

  • an employment contract that you’ve signed
  • any enterprise agreements that applies.

If you know the name of your modern award, you can find it and read all of the terms and conditions in the A-Z of modern awards.

You can also find modern awards using Award Finder.

If you don’t know the name of your modern award, visit the How to find an award page.

Transitional arrangements mean that the rates of pay in modern awards are introduced slowly. In most modern awards, the new pay rates, penalty rates and loadings are being phased in in 5 stages from July 2010 to July 2014.

From 1 July 2009, if you had a collective agreement it became a ‘transitional instrument’. It continues to apply until it is terminated or is replaced with a new agreement.

However, from 1 January 2010:

  • the rate of pay must be at least the base rate in the relevant modern award
  • employment conditions must be at least as good as the National Employment Standards.

If you are covered by an agreement, your base rate of pay must not be less than the rate in your modern award and the conditions have to be at least the same as the conditions in the National Employment Standards.

Agreements made after 1 January 2010

You’ll need to check the agreement to find out how it interacts with the modern award. Some agreements are read together with the modern award that applies, while others entirely replace the conditions of the modern award. You’ll usually find this information in the first few sections of the agreement. These sections usually also explain how to deal with any inconsistency between the modern award and the agreement.

Agreements made before 1 January 2010

Modern awards don’t apply if you are covered by a registered collective agreement that was made before 31 December 2009.

If you know that one of the following types of agreements applies, then it may apply alongside the modern award:

  • a pre-reform certified agreement
  • an old industrial relations agreement
  • a section 170MX award.

If there are differences between the agreement and the modern award, the old agreement applies. However, your base rate of pay must not be less than the rate in the modern award and the conditions must be at least the same as the conditions in the National Employment Standards.

From 1 July 2013 the high income threshold is $129 300. The high income threshold is indexed annually on 1 July.

The high income threshold affects 3 main entitlements:

  1. employees who earn more than the high income threshold and who aren’t covered by a modern award or enterprise agreement, can’t make an unfair dismissal claim
  2. employees who are covered by a modern award and have agreed to a written guarantee of annual earnings that is more than the high income threshold, don’t get modern award entitlements. However, they can make an unfair dismissal claim
  3. the maximum amount of compensation payable for unfair dismissal is capped at either half the high income threshold, or 6 months of the dismissed employee’s wage - whichever is less.

An employee’s earnings include:

  • their wages
  • money that is paid on their behalf (eg. superannuation top-ups or salary sacrifice)
  • the agreed value of non-monetary benefits (eg. laptops or mobile phones).

An employee’s earnings do not include:

  • payments that cannot be set in advance (eg. commissions, bonuses or overtime)
  • reimbursements
  • superannuation contributions that the employer has to make.

From 1 July 2013 the high income threshold is $129 300. The high income threshold is indexed annually on 1 July.

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Page last updated: 23 Sep 2013