Changes to the General Retail Industry Award 2021

Increases to pay rates in the General Retail Award from 1 September 2021

As detailed in our previous article, minimum rates of pay in the General Retail Award will increase by 2.5% on the first full pay period on or after 1 September 2021.

Although the Fair Work Commission usually increases the minimum wage on 1 July to coincide with the start of the Australian financial year, for the last two years it has provided different dates for the increases, depending on the impact of COVID-19 on the industry sector.

This year, whilst increases to most modern awards commenced on 1 July, the General Retail Industry Award alone was allocated a 1 September increase date. Awards covering other sectors deemed to have been more adversely affected by the pandemic (hospitality, tourism, etc) were given until 1 November for the wage increases to take effect.

Other changes to the Retail Award you might have missed

There have been three other significant changes to the Retail Award this year which you might have missed: firstly, a change to penalty rates for casual employees working in the evenings; secondly, the removal of junior pay rates for certain classification levels; and thirdly, changes to rules about when part time employees are entitled to overtime.

Casual employees performing evening work

Since 1 March 2021, casual employees who aren’t shift workers who perform evening work after 6pm on Monday to Friday have had their evening penalty rate increased from 145% to 150% (inclusive of casual loading).

Removal of junior pay rates in certain levels

From 1 May 2021 junior pay rates now only apply to classification levels 1 to 3 (junior rates will no longer apply to level 4 and beyond).

This means that employees younger than 21 years of age will need to be paid the full adult rate of pay where they are classified at levels 4 to 8.

Changes to overtime rules for part-time employees

The Fair Work Commission also recently handed down a decision which amended provisions in the Retail Award from 1 July 2021 concerning overtime entitlements for part time employees.

In short, the changes will mean that part-time employees can agree to work additional hours over and above their agreed weekly hours and be paid ordinary rates of pay (rather than being paid overtime rates).

The change in detail

Like most awards, the Retail Award has provisions which require an employer and a part-time employee to agree in writing to a set pattern of work when the employee commences employment, including the number of hours they will work each week, the days the work will be performed and the start and finish times each day.

Previously there was uncertainty in the Retail Award as to whether a part time employee could agree to work in excess of these hours and be paid ordinary rates of pay or whether such work would attract overtime penalties.

The changes to the Retail Award clarify that such work can be paid at ordinary hourly rates so long as employees agree to work the additional time in writing before the end of the particular shift, and this agreement can be via email or text message.

Where an employee works additional hours but without such a written agreement, they will be entitled to overtime rates.

The new provisions in the Retail Award include the following:

10.5 At the time of engaging a part-time employee, the employer must agree in writing with the employee on a regular pattern of work that must include all of the following:

(a) the number of hours to be worked on each particular day of the week (the guaranteed hours);and

(b) the times at which the employee will start and finish work each particular day; and

(c) when meal breaks may be taken and their duration.,

NOTE: An agreement under clause 10.5 could be recorded in writing including through an exchange of emails, text messages or by other electronic means.

10.6 Changes to regular pattern of work by agreement

The employer and the employee may agree to vary the regular pattern of work agreed under clause 10.5 on a temporary or ongoing basis, with effect from a future date or time. Any such agreement must be recorded in writing:

(a) if the agreement is to vary the employee’s regular pattern of work for a particular rostered shift –before the end of the affected shift; and

(b) otherwise –before the variation takes effect.

NOTE 1:An agreement under clause 10.6 could be recorded in writing including through an exchange of emails, text messages or by other electronic means.

NOTE 2: An agreement under clause 10.6 cannot result in the employee working 38 or more ordinary hours per week.

EXAMPLE: Sonya’s guaranteed hours include 5 hours work on Mondays. During a busy Monday shift, Sonya’s employer sends Sonya a text message asking her to vary her guaranteed hours that day to work 2 extra hours at ordinary rates (including any penalty rates). Sonya is happy to agree and replies by text message confirming that she agrees. The variation is agreed before Sonya works the extra 2 hours. Sonya’s regular pattern of work has been temporarily varied under clause 10.6. She is not entitled to overtime rates for the additional 2 hours.

10.7 The employer must keep a copy of any agreement under clause 10.5,and any variation of it under clause 10.6 or 10.11,and,if requested by the employee, give another copy to the employee.

10.8 For any time worked in excess of their guaranteed hours agreed under clause 10.5 or as varied under clause 10.6 or clause 10.11,the part-time employee must be paid at the overtime rate specified in Table 10—Overtime rates.

10.9 The minimum daily engagement for a part-time employee is 3 consecutive hours.

Ancillary provisions in the Retail Award also provide that where an employee has regularly agreed to work additional hours over and above their guaranteed number of hours over the previous 12 months, the employee may request in writing that the employer increase their guaranteed hours on an ongoing basis to reflect the ordinary hours regularly being worked.

The usual rules regarding other overtime still apply.

Nothing in the recent changes to the Retail Award alter the existing rules that part-time employees are entitled to overtime rates when they work in excess of 38 hours per week, over 9 hours a day (although one day at week an employee may work up to 11 hours a day) or outside the following span of hours:

There are exceptions to these rules for employees who work in news agencies, video shops or where the trading hours of the establishment extend beyond 9.00 pm on a Monday to Friday or 6.00 pm on a Saturday or Sunday.

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Disclaimer

The information provided in these blog articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact Employment Innovations for advice.