How Sure Are You That Your Employees Are Award-Free? FWO Reviews Its Position on the Miscellaneous Award 2010

by | Mar 15, 2019 | Fair Work Compliance, Workplace

How Sure Are You That Your Employees Are Award-Free? FWO Reviews Its Position on the Miscellaneous Award 2010

What do pet groomers, tutors, tour guides, au pairs and people procuring donations for charities have in common? In some circumstances they may be covered by the Miscellaneous Award 2010, according to the Fair Work Ombudsman (“FWO”).

The FWO has been busy updating the guidance on its website relating to various roles and professionals following the decision last year in the case of United Voice v Gold Coast Kennels Discretionary Trust t/a AAA Pet Resort [2018] FWCFB 128 (“Pet Resort case”).

In that case, the Fair Work Commission confirmed that the coverage of the Miscellaneous Award was broader than had been previously thought. This in turn means that certain roles that the FWO considered were award free, may actually be covered by the Miscellaneous Award.

Before we delve a bit deeper into the Pet Resort case, it might be helpful to have a brief recap on the general position on modern awards and which employees are – and which employees are not – covered by them.

Modern Awards

  • Modern awards provide mandatory entitlements that employees must be provided with (for example a minimum wage that varies from award to award). Get that wrong and you risk being subject to a financial penalty (as well as a back-payment claim).
  • If an employee is covered by a modern award, they will be protected from unfair dismissal regardless of their earnings.
  • Modern awards also provide that employees must be consulted if the employer introduces a major change, such as a restructuring or redundancies.
  • Finally, there is an obligation under most (if not all) modern awards to inform your employees that the award applies to them (and to make a copy of the award available).

The majority of employees in Australia are covered by an award, so if you’re taking the position that any of your employees are not, it is always worth checking that carefully. Modern awards tend to apply to specific industries (the Restaurant Industry Award 2010) or certain occupations (the Clerks Private Sector Award 2010) or a combination of the two (Manufacturing and Associated Industries and Occupations Award 2010).

The awards usually have a list of classifications (i.e. job titles or list of duties) that an employee must work in to fall within the coverage of the award.

So… if you’ve checked all the modern awards and you can’t find coverage for the industry you operate in, or the occupation your employee works in – that employee must be award free, right? Well…not quite.

There’s also the Miscellaneous Award, which covers employees not covered by any other award. However – confusingly – it doesn’t cover all employees not covered by other awards.

The idea behind the Miscellaneous Award was that when the modern award system was implemented in 2010, this award would act as a general “sweep up” of all employees who would have been covered by an award under the old State-based award system, but who were not given their own dedicated modern award under the new system. However, the Miscellaneous Award was not intended to extend award coverage to employees who would not previously have been covered under the old system.

There are therefore two important exemptions from coverage provided for in the Miscellaneous Award.

Firstly, the Miscellaneous Award states that it does not cover employees who work in an industry covered by another modern award, but who are not within a classification in that modern award. It would not, for example, cover an in-house accountant working in the restaurant industry (because the Restaurant Industry Award 2010 does not have a classification level for accountants).

The second exemption in the Miscellaneous Award is that it states that it does not cover “those classes of employees who because of the nature or seniority of their role, have not traditionally been covered by awards including managerial employees and professional employees such as accountants and finance, marketing, legal, human resources, public relations and information technology specialists.”.

The Pet Resort case concerned the exact operation of this second exemption.

The Pet Resort case

Prior to the Pet Resort case it was thought that the exemption operated so that if there was no pre-2010 award that applied to an employee, they could not come within the Miscellaneous Award.

The case clarifies, however, that the exemption is narrower. It is only where the reason that an employee was not covered by a pre-2010 award was because of the “nature or seniority of their role” that the exemption will reply.

In the decision, the Fair Work Commission made clear that this means that the exemption only operates to exclude from the Miscellaneous Award, employees that were not covered by a pre-2010 due to the seniority of their role or due to the fact that they were in a professional-type role (accountants and finance, marketing, legal, human resources, public relations and information technology specialists, etc).

Therefore, if an employee is working in low-level role, but this happens to be in an industry that was not covered by a pre-2010 role (because, for example, it is an emerging industry) it appears that the Miscellaneous Award may well apply.

The Fair Work Ombudsman takes the position that this means that occupations such as au pairs and people procuring charity donations may be covered by the Miscellaneous Award.

The effect of the Pet Resort decision is that when assessing award coverage the following questions must be asked:

  1. Is there an industry / occupation -specific modern award that applies to the employee? Do they come within the classifications listed in that award? If yes, this is the award that applies to them. Simple!
  2. If not, does the employee work in an industry that is covered by a modern award, but the employee is not covered by any of the classifications listed in that award? The Miscellaneous Award does not cover employees working in industries covered by a modern award where the employee does not work in one of the classifications listed in the award. They are therefore likely to be award free.
  3. If the employee works in an industry not covered by a modern award, then the next step is to determine whether they work in a role that was covered by a pre-2010 award. If their role would have previously been covered, and they fit within the classification levels in the Miscellaneous Award (i.e. low-level work), then generally the Miscellaneous Award will apply.

If they do not work in a role covered by a pre-2010 award, then to avoid the reach of the Miscellaneous Award, the reason that they were not covered by a pre-2010 award must be due to the “nature or seniority of their role” (i.e. because of their seniority or professional-type nature of their role).

In other words, the Miscellaneous Award is likely to catch low-level workers working in an industry not covered by a modern award (for example, emerging industries).  It is now not enough to just show that a pre-2010 award does not relate to the employee’s role (which was previously thought to be the case).

New guidance from the FWO

In light of the decision, the FWO has been revising the guidance on its website. Its communication to stakeholders indicates that the following guidance has been updated:

Need help?

Determining award-coverage is hard, and getting it wrong can be a costly mistake for business owners. At Employment Innovations we have a team of experts who can help you with these issues. Our clients can access unlimited workplace advice  through our subscription products.

 

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