Modern Awards containing rates below NMW to be varied from 1 January 2025

The long-running review of entry-level classifications in dozens of Modern Awards has finally reached its conclusion, with the Fair Work Commission (FWC) having settled and published determinations varying nearly 50 awards, with most amendment variations set to take effect from ppc 1 January 2025.

Background

As we reported in May, the review commenced in 2019 and scrutinised the lowest classification levels within 70 Modern Awards. The process gathered momentum following the 2022-23 Annual Wage Review, which inadvertently caused the rates attaching to entry-level classifications in the identified awards to fall below the National Minimum Wage (NMW).

In their decision earlier this year, the FWC expressed a provisional view that many Modern Awards could lawfully continue to provide for entry-level rates lower than the NMW, but that such classifications should only have “transitional” application to new entrants, meaning these introductory classifications could not be applied to workers on an ongoing basis. Final determinations giving effect to the FWC’s provisional view were published in November, with 50 awards set to be varied, in most cases from ppc 1 January 2025.

(NOTE:  the following summary has been limited to Modern Awards of relevance to ES Subscribers).

Awards to be increased in line with NMW

A small number of Modern Awards which contain an entry-level classification attaching a rate less than NMW will retain their existing classification definitions but have the lowest rate INCREASED to match the NMW (currently $915.90 per week or $24.10 per hour). Included in this group are the Children’s Services Award 2010 (with respect to the Children’s Services Employee – 1.1 and Support Worker – 1.1 classifications), the Business Equipment Award 2020 (Technical Employee – Level 1), and the Electrical, Electronic and Communications Contracting Award 2020 (Electrical worker grade 1).

The Cement, Lime & Quarrying Award 2020 (Quarrying industry – Grade 2), and the Concrete Products Award 2020 (Level 2), will be increased to match the NMW also, but will be subject to further amendment in relation to refining their classification definitions as well.

Awards to have classification definitions refined

Most Modern Awards containing an entry-level classification attaching a rate lower than the NMW will not be subject to a wage increase but will instead have their classification definitions refined to clarify that the lowest classification can only apply for a limited time before progression to the next highest classification becomes essential.

In many cases, progression to the next classification will be required upon completion of a maximum of three months’ employment; this will occur within the Manufacturing and Associated Industries and Occupations Award 2020, Vehicle Repair, Services and Retail Award 2020, Amusement, Events and Recreation Award 2020, Animal Care and Veterinary Services Award 2020, Food, Beverage and Tobacco Manufacturing Award 2020, Graphic Arts, Printing and Publishing Award 2020, Joinery and Building Trades Award 2020, Textile, Clothing, Footwear and Associated Industries Award 2020 and the Timber Industry Award 2020.

In a small number of Modern Awards, including the Concrete Products Award 2020, Cement, Lime and Quarrying Award 2020, Fitness Industry Award 2020 and Meat Industry Award 2020 progression off the entry-level classification will become essential upon completion of a maximum of six months employment.

Operative date for changes

All of the above amendments are set to take effect from the first full pay period commencing (ppc) on or after 1 January 2025. Notification emails will be circulated prior to Christmas when a Modern Award has been updated on the ES website.

The Pastoral Award 2020 will be subject to its own variation which will see the rate for a Piggery Attendant (PA2) increase to match the NMW, while the classification descriptors for entry-level roles within the Broadacre Farming and Livestock Operations stream will be refined. This variation has delayed operation and does not come into effect until ppc 1 April 2025. 

Awards NOT requiring variation

Not every award scrutinised as part of the review warrants variation; 20 Modern Awards will continue to provide an entry-level rate lower than NWM and will not be subjected to any further alteration. Included amongst this group are the Hospitality Industry (General) Award 2020, Registered and Licensed Clubs Award 2020, Gardening and Landscaping Services Award 2020, Nursery Award 2020 and Premixed Concrete Award 2020. The entry-level classification within these awards is already clearly identified as representing an introductory level which can only be applied for a specified maximum period (often three months employment) before progression to the next level is required.