4 Yearly Review of Modern Awards: Progress Update

The 4 Yearly Review of Modern Awards continues before the Fair Work Commission (FWC) though there has been little activity of note to commence 2019. After a swathe of amendments – including unpaid family & domestic violence leave and casual conversion – were pushed through in the second half of 2018, the first half of this year has yielded little more than some “plain language” re-drafting of the redundancy clause in a number of modern awards. This is despite FWC President, Justice Iain Ross, indicating over a year ago that he was “reasonably confident” the review process (which commenced in 2014) would be largely completed by the end of 2018 with a “substantial majority” of the new instruments expected to come into force in the first quarter of 2019.

What is the purpose of the 4 Yearly Review?

This first ever 4 yearly review of the modern awards, which was initiated under s.156 of the Fair Work Act 2009 (Cth), will result in every modern award being reorganized into a different format, see clauses re-written in “plain language” as much as possible and detailed schedules will be added setting out the various penalties and loadings applicable within each instrument. The intent of these proposed changes is to make the modern awards easier to interpret and understand.

Common matters such as annual leave, part-time and casual employment, award flexibility and payment of wages, etc, are also being examined as part of the process. Common matters are generally proposals for significant variation or change across the award system, such as applications which seek to change a common or core provision in most, if not all, modern awards. Many of these items have already resulted in changes in recent years, such as the implementation of the model casual conversion clause from October 2018.

There is also an ‘award stage’ within the process which is addressing award-specific issues in each of the 122 modern awards, subject to individual submissions made by employer or employee groups who are party to a particular award. The ‘award stage’ is primarily about correcting errors or inconsistencies that were caused during the award modernization process, again with the intent of achieving modern awards which are easier to interpret and understand.

What’s happening right now?

Recent developments include the FWC seeking to finalise the model clause for payment of wages on termination which is yet to be inserted into 33 modern awards. The FWC has flagged that the standard clause, which was inserted into the majority of awards from November 2018 and requires payment of all monies owing on termination within seven days, will be inserted into the Children’s Services Award 2010 and the Joinery & Building Trades Award 2010 operative pay period commencing (ppc) 9 August 2019.

Earlier this year, following the amendment of the National Employment Standards (NES) to provide for unpaid family and domestic violence leave for all workers, a Full Bench of the FWC published a provisional view that the re-worked versions of the modern awards that result from the 4 yearly review process did not need to replicate the provision, and could instead default to the NES. The FWC has recently confirmed their provisional view that all modern awards – which were only varied to include the model term for unpaid family and domestic violence leave in August 2018 – will be re-drafted to merely reference the provisions of the NES (save and except for retaining standard notes pertaining to the confidentiality of employee information and what constitutes suitable evidence in this regard). The FWC also restated its intent to review the impact and application of the unpaid family and domestic violence leave clause in June 2021 to determine whether changes are necessary to clarify an employee’s entitlement to use paid personal/carer’s leave for such absences and/or whether modern awards should provide for paid family and domestic violence leave.

As of the week beginning 29 July, the FWC has also begun hearing United Voice’s bid to “disaggregate” overtime rates from casual loading in a range of awards, with employers arguing that an increase in casuals’ overtime rates would reduce participation in the workforce. The union is seeking to have the Hospitality Industry (General) Award 2010 and the Registered & Licensed Clubs Award 2010 varied to ensure casuals receive overtime pay “in addition to” the 25% casual loading, before dealing with “potential ambiguity” in numerous other awards. The ambiguity extends to “if, when and at what rate casuals are entitled to overtime” in awards covering a range of industries such as education, aviation (cabin crew), security, cleaning and agriculture.