Wide-ranging changes to popular Modern Awards continuing to roll out

After enduring much activity early in the Albanese government’s first term, 2025 was mercifully more settled within the IR landscape, and whilst significant change to employment laws remains off the agenda for the foreseeable future, select Modern Awards have been subject to major variations to start 2026, with more changes in store for many industries as the year rolls on.

Application to increase Vehicle Allowance in dozens of awards

Back in April, the ACTU launched an urgent case before the Fair Work Commission (FWC), seeking an increase of at least 10 cents per kilometre to the mileage allowance in nearly 30 Modern Awards in response to the Iran War-related spike in fuel costs.

Rather than wait for the outcome of the 2025-26 Annual Wage Review which is likely to flow on an increase from 1 July, the union peak body has urged the FWC to act swiftly by reviewing award mileage allowances monthly and updating rates “in line with CPI private vehicle costs for at least the next 12 months, while fuel prices remain volatile”.

Many awards provide for employees using their own vehicle on the employer’s business to be reimbursed at the rate of 99 cents per kilometre, but the ACTU claims this rate to be deficient in the face of rising fuel costs, which have increased “35% on average” since the war began. 

The ACTU application encompasses awards in the retail, health and community services sectors (among others), whilst the United Worker’s Union (UWU) seeks variation to 12 awards including hospitality, clubs and children’s services. An independent application from the Australian Manufacturing Workers Union (AMWU) is focussed on desired amendment to the manufacturing award.

Separately, the ACTU has called on the Albanese Government to direct the ATO to lift the rate it uses to calculate deductions of motor vehicle expenses, arguing the current rate (88 cents per kilometre) lags well behind bowser prices and the overall cost of private vehicle use.

A Hearing occurred on 18 May, with the unions desirous of a speedy outcome.

‘Adult’ juniors to receive full adult rate under Retail, Fast Food awards

Prior to Easter, a Full Bench of the FWC handed down its decision in the junior rates case, which was first initiated by application of the Shop, Distributive and Allied Employees Association (SDA) in June 2024 in pursuit of an increase to minimum rates applicable to juniors employed under the General Retail Industry Award 2020, the Fast Food Industry Award 2020 and the Pharmacy Industry Award 2020.

In respect of juniors (being employees under 21 years of age) employed under these three modern awards, those aged 18 or over (i.e. adults) who have completed six months or more service with their employer, will be entitled to be paid the full adult award rate for their relevant classification, rather than a lesser percentage based on their age.

Those who have less than six months service, and employees aged under 18, will not have their existing junior rates disturbed – i.e. rates for these juniors will continue to be calculated as a percentage of the relevant adult rate.

The Full Bench is taking submissions on the method of implementation of the decision, though their provisional view is that the first incremental increase of 5% would occur from 1 December 2026, with subsequent 5% increases being applied each 1 July and 1 December until the 100% adult rate is achieved. This decision only impacts select junior rates in the retail, fast food and pharmacy industry awards.

ES Subscribers employing juniors covered by these awards can refer to our special email bulletin circulated 31 March 2026 for full detail.

Social, Community, Home Care & Disability Services Industry Award 2010 (SCHADS Award)

Sleepover changes from 1 June 2026

On 24 December 2025, the FWC unexpectedly issued a long-awaited decision pertaining to an application to vary the SCHADS Award, which sought to clarify obligations in relation to sleepover shifts. The critical features of the variation, which takes effect from the first pay period commencing on or after 1 June 2026, include that the SCHADS Award will be amended to expressly confirm: 1) that the sleepover period does not constitute a break between shifts (i.e. it forms part of a continuous shift which may include work before, and after the sleepover period), and 2) that the shift penalties for such sleepover shifts, when worked Monday – Friday, may be split (meaning ordinary work performed before a sleepover period would attract the afternoon shift penalty and ordinary work performed after the sleepover period would not attract an additional rate).

The variation will usher in other amendments, including the ability for workers performing sleepover shifts configured by work before and after the sleepover period to agree to increase their ordinary working hours on such shifts to a maximum of 12 (providing that no more than 8 ordinary hours are performed in one block before or after the sleepover period).

Related matters raised by the Joint Unions, such as requiring that an agreement to shorten breaks between shifts and/or extend ordinary hours of sleepover shifts to 12 expressly be recorded in writing, and the proposed introduction of a designated penalty (double time) when an employee does not receive the minimum break between shifts, are slated to be determined by the FWC in the second half of 2026.

ES Subscribers who deliver sleepover shifts under the SCHADS Award can refer to our comprehensive bulletin of 14 April, and subsequent reminder of 11 May, which also attaches the formal determination.

Gender-based undervaluation changes still in the works

Employers operating in the community services sector will be aware that a complete overhaul of the classification structure of the SCHADS Award was flagged in April last year. Flowing from the Gender-based Undervaluation – Priority Awards Review process, the FWC assessed that the SCHADS Award would benefit from the implementation of a single, simplified classification structure to replace the five existing separate streams.

Despite the FWC’s frequent reinforcement of their desire to see the matter finalised in 2025, the development of an agreed classification structure has proven more challenging and time consuming than had been envisioned. The most recent relevant development occurred prior to Christmas and entailed the Commission revising their provisional view that a nine-level classification structure had merit, now favouring a ten-level structure proposed by FWC Deputy President, Bernadette O’Neill, devised following formal proceedings late last year.

The FWC took submissions on the revised ten-level classification structure during February. An indicative timeline for finalisation of this matter is yet to be provided.

Health Professionals and Support Services Award 2020 (HPSS Award)

Dental Assistants

From the first pay period commencing on or after 1 April, Dental Assistants employed under the HPSS Award became subject to realigned classification levels within the Support Services stream, resulting in increased rates of pay for these workers. As a result of the award changes, Dental Assistants must now be classified at Level 3, 5, 6 or 7 of the Support Services stream. Levels 1, 2 and 4 are no longer applicable to Dental Assistants but are still relevant for other Support Services roles.

Special (lower) rates of pay have been designated in a limited number of instances, but these will cease to apply on 31 December 2026, with the full award rate for the relevant classification applying from 1 January 2027. No further wage increases will apply, with the FWC declaring that the realignment of the classification levels for Dental Assistants suitably remedies identified gender-based undervaluation for these workers.

More detail on the changes impacting Dental Assistants employed under the HPSS Award is available in our related news post here.

Health Professionals

Also resulting from the Gender-based Undervaluation – Priority Awards Review process is the proposed replacement of the classification structure for Health Professionals covered by the HPSS Award, originally foreshadowed to come into effect from 30 June 2026. The proposed changes will pass on wage increases, which are to be “phased in over a maximum of five approximately equal stages, 12 months apart”.

Once complete, wage increases totalling up to 17% will be flowed on to Health Professionals classifications, implemented as an increase of 5% in the first instalment (ppc 30 June 2026), 3% over the next three instalments, and a final increase, which may be less than 3% in some instances, in the final instalment.

Implementation of the proposed classification structure requires translating 19 existing classifications into 24 new classifications. The draft determination, published early in March, is yet to be finalised though it is fair to anticipate it will be confirmed with minimal refinement, meaning the new classification structure and first wage increase (of 5%) should take effect ppc 30 June 2026.

Catch up on the developments pertaining to Health Professionals employed under the HPSS Award here.

Children’s Services Award 2010 (CS Award)

The CS Award was varied from ppc 1 March 2026 to provide a brand-new classification structure and flow on wage increases for employees engaged as Children’s Services Employees (CSE’s). This was another result of the Gender-based Undervaluation – Priority Awards Review process. The revised classifications and accompanying wage increases do not apply to employees engaged as Support Workers under the CS Award, except for certain Cooks, who are now eligible to be classified and paid as a CSE.

Further increases of varying amounts will flow through for CSE’s spread across 3 years, with the second instalment (i.e. phase 2) programmed to take effect from ppc 30 June 2026. The phase 2 increases will be compounded by any increase awarded as part of the 2025-26 Annual Wage Review which would be due to take effect ppc 1 July 2026.

See our related news post to refresh on the implications of the original gender-based undervaluation determination.