New Modern Award Transitional Wages Update
With the implementation of the new award and it's transitional provisions commencing on 1 July 2010 the Fitness Australia HR service has be inundated with enquiries from members with relation to the new award and how it will affect their businesses. These are a list of the most commonly asked questions we have been receiving and we hope this will assist in alleviating many members concerns. For any further information please contact us directly and we will be able to assist you further.
Please Note: These provisions do not have to be implemented if your business is already paying above the new transitional wage rate.
My business operates as an unincorporated entity such as a sole trader or partnership. Does the new award apply to me?
The new award will only apply to unincorporated businesses in Victoria, Northern Territory and the Australian Capital Territory. If your business is unincorporated and located in NSW, SA, QLD, WA or TAS then the new award and it's transitional wages won't apply to you at this stage.
Previously the Fitness Australia HR Advisory Service has provided me with a simple sheet which outlines the relevant wages for my employees. Why is the HR Advisory Service no longer providing this information?
The Fitness Australia HR Advisory Service is able to provide Fitness Australia members with wage summaries for both pre-modern award and the new modern award – that is, the Fitness Industry Award 2010.
Unfortunately, the Fitness Australia HR Advisory Service cannot create transitional wage summaries for members. The reason for this is that the transitional provisions within the modern award are complex. The effect of this is that the transitional wages for this industry cannot be calculated on a generic basis. Instead these wages must be calculated on a case by case basis having regard to the specific classifications under both the previous award and the modern award for each individual employee. To assist members in undertaking these calculations we have developed a transitional wage calculator which can be accessed by emailing or calling the HR advisory service.
To use this calculator all you need to do is input the employees old award wage and the new award wage under the Fitness Industry Award and the calculator will then work out the transitional rate for you. The calculator was created utilising Microsoft Excel, you will also need this program for the calculator to operate.
When I use the calculator the new transitional wage amount is still lower than what I am currently paying. Do I need to make any changes?
As long as the figure you are paying is still higher than the new transitional amount, you are not obligated to increase your wages any further.
I find the whole calculator too time consuming and confusing. What are my options?
We understand the considerable confusion the new wages regime is creating. However this is the correct way of working out wages for the next five years if you are covered by the new award. As explained above, if the transitional amount is lower than what you are presently paying then you don't need to make any changes to your employees' current hourly rates. If the new wages are higher than your current rates the only options are to either use the calculator to calculate the transitional wage or alternatively if you find the process too time consuming to implement the full new award increase without gradually transitioning to the new amount.
How do I determine what award classification is relevant for my employee?
To determine which award classification is relevant for your employee(s), you should carefully read through the classification definitions contained within both the pre-modern award and the new Fitness Industry Award 2010. For your convenience, these definitions have been included as part of the attached wage summaries.
A classification will apply to an employee if it clearly covers their occupation, skills, competency and level of responsibility. In some cases the classification definition will contain a list of indicative tasks which employees at that level are expected to perform. In classifying your employees however, we recommend that you consider this task list in conjunction with the required skills, competencies or responsibilities within the relevant classification.
When considering which classification is the most appropriate for an employee we recommend employers review or analyse the particular employees' job description. You may also wish to consider the following:
The primary purpose of the employee's position;the employee's required level of supervision;the expected level of skill or competency of the employee;whether the employee will be required to supervise other staff; andthe employee's qualifications, experience or knowledge.
The pre-modern award wage which applied to my employee is higher than the new modern award wage rate. When calculating the transitional wage for this employee the result is higher than the pre-modern award wage. Is this correct?
Yes. In situations where the modern award wage is lower than the wage within the pre-modern award the transitional wage can still result in an increase.
An increase will only occur when the difference between the current modern award rate (as at 1 July 2010) and the pre-modern award rate is less than the relevant percentage of the transitional amount (this year, the relevant percentage is 80%). For example, if the difference between the wages is $40.00 and 80% of the transitional amount is $50.00, the transitional wage will increase by $10.00.
The minimum transitional wage which I have calculated is lower than the pre-modern award wage that I previously paid to my staff. Can I reduce the minimum wages for my employees to this transitional amount?
The implementation of modern awards is not intended to result in the reduction of an employee's take home pay. If an employee suffers a reduction in their take home pay as a result of the transitional provisions, the employee or their union may apply to Fair Work Australia for a take home pay order. This order can require an employer to retain existing rates of pay. In making such an order Fair Work Australia will have regard to an employees pay on an overall basis. That is, they will take into account that some entitlements will decrease whilst others increase during the five year transitional period.
In your situation, we recommend maintaining your employees' pre-modern award wages. This is because by maintaining this wage rate it is unlikely that you will become subject to a take home pay order.
I am establishing a new business. Do I need to calculate transitional wages for my employees or can I just pay the new Modern Award wages?
The transitional provisions within the Fitness Industry Award 2010 apply to employers and employees in the national system that are covered by the Award. This includes employers who establish their business after the commencement of the modern award (that is, 1 January 2010).
The effect of this is that when working the minimum wages which apply to your employees, it will be necessary for you to use the transitional calculator. To do this, you should refer to the pre-modern award entitlements that would have applied to you and your employees if your organisation had commenced trading prior to 1 January 2010.
