Do modern awards reduce my take-home pay?
In some cases, the modern award rate of pay may be lower than the equivalent pre-modern award rate of pay. However, modern awards are not intended to reduce an employee’s take-home pay.
If the modern award contains lower base rates of pay, loadings and / or penalties, an employer may choose to keep paying the higher pre-modern award entitlements to ensure that existing employees do not suffer a reduction in take-home pay. However, base rates of pay, loadings and penalty rates entitlements are phased separately and care needs to be taken to ensure that the employees are paid their minimum entitlement under each.
If an employee believes their take-home pay has been reduced, they or their union, can apply to Fair Work Australia to make a ‘take-home pay order’ to ensure that the employee is not worse off.
What is a take-home pay order?
A take-home pay order can preserve your existing rates of pay while you remain in the same job. It can apply to wages and allowances, as well as incentive based payments and overtime. An order can apply to an individual or a class of employees or outworkers who are in a similar position.
A take-home pay order can be made if:
- A modern award applies to the employee or employees, and
- the employee or employees are in the same job as they were before the modern award commenced, and
- the amount of the employees’ take-home pay for working the same sort of hours or the same amount of work has been reduced, and
- this reduction in take-home pay has occurred because of the commencement of the modern award.
Fair Work Australia will not make a take-home pay order if the reduction in take-home pay is minor or insignificant, or the workers have been adequately compensated in other ways for the reduction.
Who can apply for a take-home pay order?
You or your union can apply to Fair Work Australia for a take-home pay order. In addition, a person acting on your behalf or on behalf of a class of employees may apply. An application for a take-home pay order can also be made by an organisation representing outworkers on behalf of those outworkers.
How do I apply for a take-home pay order?
Further information about take-home pay orders and application forms are available from the Fair Work Australia 
website.