Restaurant Industry Award Summary 2020

In this Restaurant Industry Award Summary (document), we detail some of the key provisions of the Restaurant Industry Award 2020 including what sorts of businesses it covers, the different level of employee classification under the Award and guidance on employee entitlements.

The Award contains a number of provisions that are uncommon in the modern award system including; the concept of part-time employees having “guaranteed hours” and “available periods”; an entitlement to payment for public holidays even where the employee was not due to work (in some circumstances), and an obligation to pay annual salaries at 25% above the minimum weekly wages set out in the Award.

This summary includes guidance on the temporary changes to the Restaurant Industry Award that came into effect on 11 August 2021 and will last initially for 12 months. These provide for:

1. An optional simplified classification structure;
2. An ability for an employer and a senior employee (e.g. Supervisor, Head Chef, etc) to agree to pay a higher flat rate of pay, instead of overtime or penalty rates for up to 57 hours per week (the “Exemption Rate”);
3. An ability for employers and employees to agree to pay a flat allowance rate, in substitute for allowances that arise under the Restaurant Award (the “Substitute Allowance”).

If you require any assistance in understanding your rights or obligations under the Award, please contact us.

Table of Contents

Coverage of the Restaurant Industry Award

The Restaurant Industry Award 2020 covers employers and employees working in the “restaurant industry”, the Award states this includes:

• Restaurants;
• Cafes;
• Reception centres;
• Night clubs;
• Catering by a restaurant business.

The Award does not generally cover:

• Restaurants that are connected to a hotel or pub (who would generally be covered by the Hospitality Industry (General) Award 2020);
• Establishments where food is taken-away from the premises (who would generally be covered by Fast Food Industry Award 2010);
• Restaurants at registered clubs (who would generally be covered by the Registered and Licensed Clubs Award 2010);
• In-flight catering for airlines or catering services provided by aged care employers.

Classifications

The Award sets out a classification structure based on the tasks that employees perform in Schedule A – Classification Structure and Definitions. Each classification has a corresponding minimum rate of pay. Since 11 August 2021 employers can also use a new optional simplified classification structure – see the end of this summary.

The classification structure in Schedule A is structured so that unless an employee has “the appropriate level of training” they cannot be classified higher than Level 2, even if they are performing the duties of a more responsible role. “Appropriate level of training” means the employee must either have a relevant qualification or have been assessed by a qualified skills assessor as having equivalent skills.

Below are some of the most common indicative job titles for each level.

Introductory Level:

• No prior hospitality experience and unable to demonstrate the skills and competencies of level one;
• For a maximum of three months or until the employee demonstrates the skills and competencies of level one.

Level One:

• Dishies; Bussies, Kitchen Assistants.

Level Two:

• Bar & waitpersons (unqualified);
• Cooks – breakfast and snacks, baking, pastry cooking or butchering;
• Employees will be at least a Level 2 if they:
  • are responsible for the training or supervision of other staff;
  • serve customers;
  • supply alcohol to customers (including delivering it to their table).

Level Three:

• Employees with Certificate II relevant to their classification e.g. Bar Supervisor, Front of House Supervisor;
• Cooks – Breakfast and snacks, baking, pastry cooking or butchering (with relevant Certificate II).

Level Four:

• Trade qualified chefs including fully qualified apprentice chefs;
• Employees with Certificate III relevant to their classification e.g. specialised bar & waitpersons.

Level Five:

• Front of House Managers (with appropriate qualifications);
• Sous Chefs (with appropriate qualifications).

Level Six:

• Head Chef (with appropriate qualifications).

Junior employees involved in serving liquor must be paid the appropriate adult rate of pay.

The Award does not generally cover senior management responsible for a significant area of the business, including company secretaries, chief accountants, human resource managers, restaurant managers and executive chefs whose duties are not described in the Award.

Rates of Pay

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Types of Employment

Full-time employee:

A full-time employee is engaged to work an average of 38 ordinary hours per week. Employees can be paid per hour or paid a salaried amount (see “Annualised Salaries” below).

Part-time employee:

A part-time employee works at least 8 and less than 38 ordinary hours per week (or over the roster cycle) and has reasonably predictable hours of work. The minimum engagement is 3 hours per day, and they must have at least 2 days off per week.

Part-time employees must have a written agreement that includes the number of hours the employee is guaranteed to be given each week or roster cycle, and the employee’s availability periods including days and times.

For example, a part-time might have 10 guaranteed hours per week. Their availability might be Monday’s, Tuesday’s and Wednesday’s between 7:00 am and 7:00 pm. This means they must be rostered for at least 10 hours per week during these periods. They can generally be rostered for additional hours within these periods without the need to pay overtime (see further below).

Changes to the guaranteed hours can only be made by written agreement with the employee. The employee can change their availability only where there is a genuine and ongoing change in their personal circumstances, by providing 14 days written notice.

Casual employee:

A casual employee doesn’t have guaranteed hours of work and usually works an irregular pattern. They are paid an additional 25% loading on top of the permanent base rate of pay as compensation for annual leave and personal/carer’s leave entitlements, notice of termination, redundancy benefits and other entitlements of full or part-time employees.

A casual employee must be engaged for a minimum of 2 hours of work. A casual employee must be paid at the termination of each engagement but may agree to be paid weekly or fortnightly.

Employment Innovations has developed template employment contracts, especially for the restaurant industry. These include clauses to specify guaranteed hours and availability periods in compliance with the requirements of the Award. Contact us to find out more.

Casual Conversion

Casual employees are entitled to ask their employer to convert their employment to full-time or part-time employment when they have worked a regular pattern of hours over a period of at least 12 months and they could continue to work those hours as a full-time or part-time employee without significant changes. The Employer must provide a copy of the casual conversion subclause to all casual employees within their first 12 months of employment. It is generally easiest to provide this to casual employees when they start their employment. Any request to convert must be considered by the Employer but may be refused on reasonable business grounds.

Please contact Employment Innovations if you need a copy of the clause to send to your employees.

Annualised Salary Arrangements

Instead of paying full-time and part-time employees according to each hour they work, an employee can agree with their employer that they will be paid an annual salary on the following basis:

• Annual salaries must be paid at a rate equivalent to at least 25% or more above the minimum weekly rate set out in the award, multiplied by 52 weeks;
• The 25% loading is designed to compensate for overtime, penalty rates and split shift allowance – so employers are not required to pay these (subject to what is said below!). Annual leave loading is not included within the 25% loading, so employers are still required to pay this (or to increase the salary to cover this entitlement);
• The employer must perform an annual reconciliation of the salary the employee was paid against what the employee would have been entitled to if they had been paid hourly under the Award, including all overtime and penalty rate payment obligations based on the actual work pattern;
• In order to do this, the employer must keep all records relating to starting and finishing times of employees under an annualised salary arrangement, which must be signed weekly by the employee;
• Where the comparison shows a shortfall in the employee’s wages, the employee must be paid the difference between the wages earned under the Award and the actual amount paid.

Employment Innovations has developed template employment contracts, especially for the restaurant industry. They include clauses that specify annualised salary arrangements in compliance with the requirements of the Award.​ Contact us to find out more.

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When overtime applies

Full-time and part-time employees:

Overtime rates are payable when a full or part-time employee works:

• Outside of their rostered hours;
• More than an average of 38 hours per week over the roster cycle (maximum 4 weeks);
• Over 11.5 hours in any one day, exclusive of unpaid meal break times (or if under 18 years old, more than 10 hours per day);
• More than 3 x 10-hour days in a row without a 48 hour break immediately afterwards;
• More than 8 days of 10 hours in a 4-week roster;
• A broken shift that spans over more than 12 hours in one day or shift.

An employee who works overtime should have at least an 8 hour break between finishing work and when they next commence work. Employees must then be allowed an 8 hour break without loss of pay before they commence work again, or they will be entitled to be paid the applicable overtime rate for all time worked until they receive an 8 hour break.

For part-time employees, additional hours can be rostered at ordinary rates provided they are not in excess of the above criteria and are rostered within the employee’s specified availability periods. They must have two days off each week.

Casual employees:

Overtime rates are payable when a casual employee works:

• More than 38 hours per week over the roster cycle (maximum 4 weeks);
• More than 12 hours in any one day or shift.

Overtime Rates

The overtime rate payable to an employee depends on the time at which the overtime is worked:

• Monday to Friday: 150% of the employee’s ordinary base rate of pay for the first two hours of overtime then 200% of the employee’s ordinary base rate of pay for the rest of the overtime.
• Between midnight Friday and midnight Saturday: 175% of the employee’s ordinary base rate of pay for the first two hours of overtime then 200% of the employee’s ordinary base rate of pay for the rest of the overtime.
• Between midnight Saturday and midnight Sunday: 200% of the employee’s ordinary base rate of pay for all time worked.
• On a rostered day off: 200% of the employee’s ordinary base rate of pay for all time worked. The employee must be paid for at least four hours even if the employee works for less than four hours.

Note: All employees receive overtime rates calculated on the permanent employee’s base rate of pay i.e casual employees do not receive a casual loading on top of overtime rates of pay.

Time in lieu

An employer and employee may agree in writing to an employee taking time off instead of being paid for a particular amount of overtime work. The period of time off that an employee is entitled to take is equivalent to the payment they would have received for overtime hours worked. For example; an employee who worked 2 overtime hours at ‘time and a half’ is entitled to 3 hours off.

Penalty Rates

When an employee works ordinary hours on the following days, they are entitled to the following penalty rates:

Additional penalty payments apply in the following circumstances:

• Evenings 10:00 pm to midnight Monday to Friday only: $2.37 per hour or part hour worked;
• Early mornings midnight to 6:00 am Monday – Friday only: $3.55 per hour or part hour worked;
• Split shift (full-time and part-time employees only): $4.50 per shift.

A “split-shift” is where an employee works two separate shifts of two hours or more in one day. The split shift allowance is paid in respect of each split shift (i.e. where an employee works two split shifts in one day, they receive the allowance twice).

Public Holidays

• Full-time and part-time employees may by agreement with the employer receive a 125% penalty and a day in lieu instead of the 225% penalty rate;
• An employee being paid an annualised salary that is required to work on a public holiday will be entitled to a day off in lieu, or a day added to their annual leave entitlement, in addition to receiving their normal salary;
• Permanent employees, that are not required to work on a public holiday (due to venue closure or because the public holiday falls during a period of annual leave) will receive their ordinary rate of pay for the day of work, and no deduction from their leave balance. If a part-time employee would not normally work on the day of the week that a public holiday falls, they will not be entitled to payment;

Full-time employees (hourly and salaried) whose rostered day off* falls on a public holiday must:

a. be paid an extra day’s pay;
b. be provided with an alternative day off within 28 days; or
c. receive an additional day’s annual leave.

Note: * A rostered day off means any day the employee is not rostered to work (i.e. it does not mean a day off as part of an “RDO system”).

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Breaks

Breaks must be provided as follows and apply to casual employees, unless otherwise specified.

If the employee is not given an unpaid meal break after 6 hours, the employer must pay the employee 150% of the employee’s ordinary base rate of pay until either the meal break is given, or the shift ends.

If the employee was told the time of their unpaid meal break was due to be given, but it is not given at that time, the penalty payment applies from the time the unpaid break was due to commence.

Leave & Annual Leave Loading

Employees are entitled to leave in accordance with the National Employment Standards (NES) set out in the Fair Work Act 2009. For full-time employees, this includes four weeks annual leave per year and 10 days personal/carer’s leave (pro-rata for part-time employees).

Employees are entitled to an annual leave loading (i.e. an uplift in the wages they would have earned) of 17.5% when they take a period of annual leave.

Notice Periods

The notice periods to be given by an employer are as follows.

Employees are entitled to an extra week’s notice if they are over 45 years old and have completed at least 2 years of continuous service with the employer at the end of the day the notice is given.

A deduction can be made for inadequate notice (see below).

Deductions From Wages

• Breakages and cashiering underings: no deduction can be made unless in the case of wilful misconduct;
• Inadequate Notice: Where an employee has failed to provide adequate notice in line with the NES, an employer can deduct up to one week of wages from monies owed to the employee, provided it is reasonable and the employee is over 18 years of age;
• No deduction can be made from accrued entitlements including annual leave.

Higher Duties

If an employee performs higher duties for a period of less than 2 hours, they must be paid for only the time worked at this higher classification. If an employee performs higher duties for more than 2 hours, they will need to be paid the higher classification for the whole day.

Allowances

These are some of the commonly used allowances under the Award. Refer to clause 21 of the Award for a list of all allowances and the full conditions associated with each allowance.

Special Clothing: For the purpose of this allowance, special clothing does not include “black and white” attire.

Note: Please note that allowances are regularly updated. Please refer to the Fair Work Ombudsman pay guide for the current rates.

Superannuation

An employer is obligated to make contributions the employee earns $350 or more in a calendar month.

This includes employees under 18 years old. (Figure correct for period 1 July 2021- 30 June 2022).

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How Employment Innovations can help

If you require assistance with dealing with disciplinary issues concerning staff, Employment Innovations can help. Our HR Advisors will be able to guide you through each step of the disciplinary process and we have template documents (e.g. direction to attend a disciplinary meeting, written warning, letter of termination, etc) available as part of our subscription packages.

You might also be interested in

Employment Innovations – Modern Awards knowledge base

Employment Innovations’ Hospitality Industry Award Summary

Outsourced HR & Payroll Services for the Restaurant Industry

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.

Disclaimer

The information provided in these knowledge base 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.

This knowledge base article will change over time, as Modern Award legislation relating to this Industry or Occupation is passed by the Fair Work Commission. Originally published on 23 September 2019 and last updated on 14 April 2022.

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