One of the most common modern awards to apply in Australian workplaces is the Clerks Private Sector Award, which applies to many employees performing administrative work. Confusingly, the Clerks Award doesn’t apply to every employee performing such work, a fact that catches many employers out.
We have put together a free downloadable summary of the Clerks Award which explains all the key provisions in the Clerks Award.
Who does (and who doesn’t) the Clerks Award apply to?
Let’s take the example of three employees doing administrative work (dealing with correspondence, answering the phone, maintaining files of documents, etc). One works for an insurance company, one works for a building company and the third works for an advertising agency.
As a rule of thumb, the process of determining which modern award(s) apply to your business should start with working out whether there is an “industry” award that applies to your industry sector.
The first two employees in our example work in industries that have industry awards (the Banking, Finance and Insurance Award and the Building and Construction General Onsite Award, respectively). The third employee works in an industry with no industry award coverage.
The Banking, Finance and Insurance Award contains coverage for employees doing administrative work, so this would apply to the first employee, rather than the Clerks Award.
For the second employee, there is no coverage for administrative employees in the Building and Construction Award, so the Clerks Award would apply instead. Similarly, the employee working in the advertising industry would be covered by the Clerks Award.
Unfortunately, things are not always that simple. For a retail business, the Clerks Award will apply to administrative employees if they are based away from the retail establishment (eg at a head office), but not if they are based at the retail establishment (in which case the General Retail Industry Award will apply). For employers covered by the Social, Community, Home Care and Disability Services Industry Award (SCHADS Award), the Clerks Award will apply to employees engaged in the crisis assistance and supported housing sectors, but not in the social and community services sector or family day care scheme sectors (in which case the SCHADS Award will apply).
Award coverage is complicated, and getting it right is essential, so please reach out to us at Employment Innovations if we can assist in this area.
What are some of the key provisions in the Clerks Award? And what clauses catch employers out?
As with other modern awards, the Clerks Award sets out minimum terms and conditions for employees, including (most importantly) the minimum rates they can be paid.
One clause in the Clerks Award that frequently catches employers is out, is the rules for engaging part-time employees. These require employers to specify in writing the days of the week on which the employee will work and the times at which the employee will start and finish work each day, not just the total number of hours they are engaged to work per week. Hours worked outside of this agreed pattern of works must be paid as overtime. (See clause 10).
Another provision which often lands employers in hot water is the clause relating to mandatory breaks. Clause 15 states that an employee who works more than 5 hours at a time is entitled to one 30 to 60 minute unpaid meal break, to be taken within the first 5 hours of work. An employer must pay an employee who is required to work through their meal break 200% of the minimum hourly rate from when the meal break would have commenced until a meal break is allowed.
As with most awards, the Clerks Award provides for full-time and part-time employees to be paid an annual leave loading of 17.5% of the minimum base rate of pay, when they take annual leave (see clause 32). Whilst it is possible to agree with an employee to absorb this into their annual salary, employers need to ensure that the salary is set high enough to cover all entitlements that may arise.
The award also contains an “annualised wage arrangement” which allows employers to pay an annual salary designed to cover all entitlements that arise. Rather than having to make sure the salary is sufficient to cover all entitlements that arise in a particular pay period, this method just requires that the salary paid over the year as a whole is sufficient to meet all entitlements (and allows an employer to put good any shortfalls within 14 days of an annual reconciliation).
In exchange for this flexibility there are detailed requirements about the records of hours worked that an employer has to keep (which need to be approved by employees each week or each roster period).
As explained in our Clerks Award Summary, this isn’t the only method of paying an annual salary – it can also be arranged through a simple contractual agreement – but it is the only method that allows an employer to make good any “underpayments” at the end of each year. Paying an annual salary in reliance in a contractual agreement means that an employer must be confident that the amount an employee receives in each pay packet is sufficient to meet the entitlements in each pay period. If an underpayment arises, there is no lawful way to simply make good on the shortfall at the end of the year. Significant penalties can be imposed for breaching obligations under a modern award.
We explain all these provisions in much more detail in the downloadable Clerks Award Summary. Please contact Employment Innovations should you require any further information on any of the matters in this article.
About Employment Innovations
Employment Innovations is one of Australia’s leading providers of employment services designed to increase productivity and ensure compliance. Its services and solutions include all the tools that every Australian small to medium sized employer needs – including workplace advice, legal services, payroll solutions, migration, human resource management and HR software.
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.