An award is an enforceable document containing minimum terms and conditions of employment in addition to any legislated minimum terms.
In general, an award applies to employees in a particular industry or occupation and is used as the benchmark for assessing related enterprise agreements.
Your collective agreement becomes what is called a ‘transitional instrument’ from 1 July 2009. It will continue to operate until it is either terminated or replaced.
The National Employment Standards and minimum wages in modern awards and national minimum wage orders apply from 1 January 2010. From that date any terms of a transitional instrument to the extent that is detrimental to an employee, in any respect, when compared to an entitlement under the NES will have no effect.
Many businesses have a registered agreement that covers their employees. Modern awards do not apply to an employer and employee while they have one of these agreements registered with an appropriate authority in place.
The only exception to this is if a modern award applies along with one of the following kinds of agreement-based transitional instruments:
- a pre-reform certified agreement
- an old IR agreement and
- a section 170MX award.
In these cases the relevant agreement based transitional instrument prevails over the modern award to the extent of any inconsistency.
The base rate of pay in any agreement based transitional instrument must not be less than the relevant modern award. This situation also applies to collective Division 2B state employment agreements made within States that referred their industrial powers to the Commonwealth from 1 January 2010.
If the modern award contains phasing-in provisions then this may alter the minimum base rate payable during the transition period between 1 July 2010 and 1 July 2014.
Section 332 of the Fair Work Act 2009 specifies the following:
An employee's earnings include:
- the employee’s wages
- amounts applied or dealt with in any way on the employee’s behalf or as the employee directs
- the agreed money value of non-monetary benefits
- amounts or benefits prescribed by the regulations.
However, an employee’s earnings do not include the following:
- payments the amount of which cannot be determined in advance
- reimbursements
- certain statutory superannuation contributions (see subsection 332(4) of the Fair Work Act 2009)
- amounts prescribed by the regulations.
Note: Some examples of payments that cannot be determined in advance are commissions, incentive-based payments and bonuses, and overtime (unless the overtime is guaranteed).