New Transitional Wages Guide for the Fitness Industry
Fair Work Australia has been undertaking the significant task of reducing around 4000 awards Australia wide into approximately 125 Modern Awards that will apply throughout Australia. The Fitness Industry Award 2010 will apply to all businesses within the Fitness Industry across Australia except for those which operate as an unincorporated practice within Western Australia.
Despite the governments objective that both employers and employees were to be no worse off as a result of these new awards Fair Work Australia has stated that "some wages and conditions will increase as a result of moving to the terms which apply elsewhere in the industry and equally some existing award entitlements will not be reflected in the applicable modern award because they do not currently have general application."
To lessen the immediate impact of these new changes the modern award contains transitional provisions which allow some of the changes in the award to be progressively phased in over five annual instalments commencing on the 1st of July 2010.
To assist members within understanding the transitional provisions with regards to minimum wages, the Fitness Australia HR Advisory Service has developed a transitional wage calculator. The purpose of this calculator is to provide members with a tool which can be used to calculate the applicable minimum wages for their employees.
Unfortunately, the Fitness Australia HR Advisory Service is not able to provide transitional wage summaries to members. This is because there is a high level of risk involved with calculating transitional wages on a generic basis. Transitional 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.
How do I use the transitional wage calculator?
To calculate an employee's transitional wage rate, the following steps should be followed:
1) Employers need to first identify both the employee's pre-modern award and modern award classification. To do this, reference should be made to both the previous award and the modern award classification definitions to see which level (in each of the Awards) is the most appropriate. Please note that the employee's classification under each of the Awards should be determined by reference to the classification definition. This is not necessarily the classification which is closest to the employees current wage rate.
Guidelines for identifying the relevant classifications for a particular employee can be found towards the end of this document in the frequently asked questions section.
2) Employers should then identify the award wages applicable to the classifications identified in step one. To do this, reference should be made to the pre-modern award and the modern award wage summaries.
These wage summaries have been attached for your convenience.
3) The relevant wages (identified in step two) should be entered into the calculator below. Please note that employers in Queensland should use the relevant amount for the South Division, Eastern District and not the rates which have been increased to include the relevant district allowances.
The relevant transitional award wage will then be shown. To enter wages into the table on the next page, please double click on the table so that the excel spreadsheet is activated.
Transitional Wage Calculator
Frequently Asked Questions
Previously the Fitness Australia HR Advisory Service has provided me with 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 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 the fitness 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 this transitional wage calculator.
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.
I currently pay my employees above the minimum award entitlements. Do I have to maintain these above award payments?
Clause 2.2 of the Fitness Industry Award 2010 provides:
The monetary obligations imposed on employers by this award may be absorbed into overaward payments. Nothing in this award requires an employer to maintain or increase any overaward payment.
The effect of this clause is that if you are paying your employee more than the minimum award wages prior to 1 July 2010, you are not required to maintain this above award payment. For example, if you were paying your employee $10 more per week than the minimum wage prior to 1 July 2010, and the minimum wage was increased by $5 per week, the modern award does not require you to pay $10 more than the new minimum wage.
However, it is important that employers are aware that in situations such as this over award payments can only satisfy entitlements to which the above award payment is directed. We therefore recommend that employers enter into written contracts of employment with their staff.
The Fitness Australia HR Hotline service is able to provide Fitness Australia members with sample contracts free of charge.
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 fitness centre. 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.
For more information or assistance, please contact our friendly team at the Fitness Australia HR Advisory Service on
Telephone: 1300 211 311 1300 211 311
Email: hrhotline@fitness.org.au
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