Restaurant Industry Award
Knowledge Base for Employers

 

Restaurant Industry Award Knowledge Base for Employers

 

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

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COVERAGE
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CLASSIFICATIONS
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MINIMUM RATES OF PAY
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TYPES OF EMPLOYMENT
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CASUAL CONVERSION
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ANNUALISED SALARY ARRANGEMENTS
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WHEN OVERTIME APPLIES
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OVERTIME RATES
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TIME IN LIEU
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PENALTY RATES
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PUBLIC HOLIDAYS
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BREAKS
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LEAVE & ANNUAL LEAVE LOADING
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NOTICE PERIODS
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DEDUCTIONS FROM WAGES
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HIGHER DUTIES
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ALLOWANCES
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SUPERANNUATION
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TEMPORARY CHANGES TO THE RESTAURANT AWARD
=
COVERAGE
=
CLASSIFICATIONS
=
MINIMUM RATES OF PAY
=
TYPES OF EMPLOYMENT
=
CASUAL CONVERSION
=
ANNUALISED SALARY ARRANGEMENTS
=
WHEN OVERTIME APPLIES
=
OVERTIME RATES
=
TIME IN LIEU
=
PENALTY RATES
=
PUBLIC HOLIDAYS
=
BREAKS
=
LEAVE & ANNUAL LEAVE LOADING
=
NOTICE PERIODS
=
DEDUCTIONS FROM WAGES
=
HIGHER DUTIES
=
ALLOWANCES
=
SUPERANNUATION
=
TEMPORARY CHANGES TO THE RESTAURANT AWARD

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.

 

Minimum Rates of Pay

*As at 1st November 2021. Please refer to the pay guide for full rates, including junior & apprentice rates and allowances.

 

Employee Classification Hourly Pay Rate ($)
Adult – Full-Time & Part-Time
Hourly Pay Rate ($)
Adult – Casual
Introductory level $20.33 $25.41
Level 1 – food and beverage attendant grade 1 $20.92 $26.15
Level 1 – kitchen attendant grade 1 $20.92 $26.15
Level 2 – food and beverage attendant grade 2 $21.72 $27.15
Level 2 – restaurant/cafe worker grade 1 $21.72 $27.15
Level 2 – cook grade 1 $21.72 $27.15
Level 2 – kitchen attendant grade 2 $21.72 $27.15
Level 2 – clerical grade 1 $21.72 $27.15
Level 2 – storeperson grade 1 $21.72 $27.15
Level 2 – door person/security officer grade 1 $21.72 $27.15
Level 3 – food and beverage attendant grade 3 $22.46 $28.08
Level 3 – restaurant/cafe worker grade 2 $22.46 $28.08
Level 3 – cook grade 2 $22.46 $28.08
Level 3 – kitchen attendant grade 3 $22.46 $28.08
Level 3 – clerical grade 2 $22.46 $28.08
Level 3 – storeperson grade 2 $22.46 $28.08
Level 3 – timekeeper/security officer grade 2 $22.46 $28.08
Level 3 – handyperson $22.46 $28.08
Level 4 – food and beverage attendant grade 4 (tradesperson) $23.67 $29.59
Level 4 – cook grade 3 (tradesperson) $23.67 $29.59
Level 4 – chef grade 1 (tradesperson) $23.67 $29.59
Level 4 – clerical grade 3 $23.67 $29.59
Level 4 – storeperson grade 3 $23.67 $29.59
Level 5 – food and beverage supervisor $25.16 $31.45
Level 5 – restaurant/cafe worker grade 3 $25.16 $31.45
Level 5 – cook grade 4 (tradesperson) $25.16 $31.45
Level 5 – chef grade 2 (tradesperson) $25.16 $31.45
Level 5 – clerical supervisor $25.16 $31.45
Level 6 – cook grade 5 (tradesperson) $25.83 $32.29
Level 6 – chef grade 3 (tradesperson) $25.83 $32.29

 

Restaurant Industry Award Summary - A Free Resource From Employment Innovations

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.

 

Restaurant Industry Award Summary - A Free Resource From Employment Innovations

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:

Type of employment Monday to Friday Saturday Sunday Public Holidays
  % % % %
Full-time and part-time 100% 125% 150% 225%

Casual Introductory Level, Level 1, Level 2

(inclusive of 25% casual loading)

125% 150% 150% 250%

Casual Level 3 to Level 6

(inclusive of casual 25% loading)

125% 150% 175% 250%

 

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”).

 

Restaurant Industry Award Summary - A Free Resource From Employment Innovations

Breaks

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

  Employee working shift of five or more hours Unpaid break rostered to be taken after 5 hours of starting work or employee required to work more than 5 hours after an unpaid break Permanent employee required to work more than 10 hours in the day Unpaid meal break
Break entitlement Unpaid 30 minute meal break. Additional paid 20 minute break. 2 additional 20 minute paid breaks. Additional paid 20 minute break.
Timing of break No earlier than 1 hour after starting work and no later than 6 hours after starting work. If unpaid break rostered to be taken after 5 hours, the additional paid break must not be taken earlier than 2 hours after starting work and no later than 6 hours after starting work. In rostering for these breaks, the employer must make all reasonable efforts to ensure an even mix of work time and breaks.  

 

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.

Employee’s period of continuous service with the employer at the end of the day the notice is given Period
Not more than 1 year 1 week
More than 1 year but not more than 3 years 2 weeks
More than 3 years but not more than 5 years 3 weeks
More than 5 years 4 weeks

 

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.

Split-shift – not applicable to casuals $4.50 for each separate work period of 2 hours or more
Laundry allowance Reimbursement of the demonstrated costs of laundering special clothing
Meal allowance $13.95 per meal
Special clothing reimbursement Reimbursement of the cost of purchasing special clothing such as coats, dresses, caps, aprons, cuffs
Waterproof or protective clothing reimbursement Reimbursement of the cost of purchasing the waterproof or other protective clothing
Tool allowance – apprentice cooks only $1.86 per day or part thereof up to a maximum of $9.11 per week
Working away from the usual workplace – travelling time allowance Payment at the ordinary pay rate for the time occupied in travelling between the employer’s place of business and work or between the employee’s residence and work
Working away from usual workplace – country or seaside work involving 80km or more of travel Payment for transport to and from the workplace

 

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

Note: These rates are correct as of 29 November 2021.

 

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).

 

Restaurant Industry Award Summary - A Free Resource From Employment Innovations

Temporary Changes to the Restaurant Award from 11 August 2021

The following outlines the three key changes introduced into the Restaurant Award from 11 August 2021:

  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”).

 

1. A Simplified Classification Structure

From 11 August 2021 employers can choose to “opt-in” to a simplified classification structure. Unlike the other changes detailed below, this does not depend on employees agreeing to the change.

If the employer chooses to use the simplified classification structure, it must do so for all relevant employees (it cannot just “cherry-pick” the employees it wishes it to apply to). The simplified classification structure applies to any employee above the current “Introductory Level” in the Food and Beverage and Kitchen streams, employees at the Introductory Level will be unaffected by an employer choosing to implement the new classification structure.

The simplified classification structure is as follows:

AA.2 – Restaurant/Café Worker Grade 1

AA.2.1 – Means an employee who is, engaged in any of the following:

a. picking up glasses; or
b. providing general assistance to food and beverage attendants of a higher classification not including service to customers; or
c. removing food plates; or
d. setting or wiping down tables; or
e. cleaning and tidying associated areas; or
f. receiving money; or
g. cooking breakfasts and snacks, baking, pastry cooking or butchering; or
h. general cleaning duties within a kitchen or food preparation area and scullery, including cleaning cooking and general utensils used in a kitchen and restaurant; or
i. assisting employees who are cooking; or
j. assembling and preparing ingredients for cooking; or
k. general pantry duties.

 

AA.2.2 – Means an employee who is, engaged in any of the following:

a. supplying, dispensing or mixing liquor; or
b. assisting in the cellar; or
c. undertaking general waiting duties for food or beverages, including cleaning tables; or
d. receiving money; or
e. attending a snack bar; or
f. performing delivery duties; or
g. taking reservations and greeting and seating guests.

 

AA.2.3 – In addition to the duties set out in AA.2.1 and AA.2.2, means an employee who has the appropriate level of training, and who is engaged in specialised non-cooking duties in a kitchen or food preparation area.

 

AA.3 – Restaurant/Café Worker Grade 2

AA.3.1 – Means an employee who has the appropriate level of training and is engaged in any of the following:

a. supplying, dispensing or mixing liquor; or
b. assisting in the cellar; or
c. undertaking general waiting duties for both food and liquor, including cleaning tables; or
d. receiving money; or
e. assisting in the training and supervision of food and beverage attendants of a lower classification; or
f. delivery duties; or
g. taking reservations and greeting and seating guests; or
h. cooking duties such as baking, pastry cooking or butchering.

 

AA.3.2 – In addition to the duties set out in AA.3.1, means an employee who has the appropriate level of training, which may include a supervisory course, and who has responsibility for the supervision, training and coordination of kitchen attendants of a lower classification.

 

AA.4 – Restaurant/Café Worker Grade 3

AA.4.1 – Means an employee who has the appropriate level of training, which can include a supervisory course, who:

a. carries out specialised skilled duties in a fine dining room or a restaurant; or
b. has responsibility for the supervision, training and coordination of food and beverage staff or for stock control for one or more bars.

 

Note: To avoid any doubt, an employee classified in one of the classifications set out in this Schedule shall perform all the duties of the classification as required by the employer.

 

AA.5 – Chef stream

AA.5.1 – Chef grade 1 (tradesperson) means a commi chef or equivalent who has completed an apprenticeship or passed the appropriate trade test or who has the appropriate level of training, and who is engaged in cooking, baking, pastry cooking or butchering duties.

AA.5.2 Chef grade 2 (tradesperson) means a demi chef or equivalent who has completed an apprenticeship or passed the appropriate trade test or who has the appropriate level of training and who is engaged to perform general or specialised cooking, butchering, baking or pastry cooking duties or supervises and trains other cooks and kitchen employees.

AA.5.3 – Chef grade 3 (tradesperson) means a chef de partie or equivalent who has completed an apprenticeship or passed the appropriate trade test or who has the appropriate level of training in cooking, butchering or pastry cooking and who performs any of the following:

a. general and specialised duties, including supervision or training of kitchen employees; or
b. ordering and stock control; or
c. supervising other cooks and kitchen employees in a single kitchen establishment.

 

The relevant pay rates under the new classification structure are as follows (including rates from when the Restaurant Award rates increase as of 1 November 2021), the rates will be subject to usual rules regarding penalty rates, overtime rates, casual loading, etc.

Employee Classification Employee stream and grade Min weekly rate from 11 Aug 21
(FULL-TIME EMPLOYEE)
Min hourly rate from 11 Aug 21
(FULL-TIME OR PART-TIME EMPLOYEE)
Min weekly rate from 1 Nov 21
(FULL-TIME EMPLOYEE)
Min hourly rate from 1 Nov 21
(FULL-TIME OR PART-TIME EMPLOYEE)
RESTAURANT / CAFÉ STREAM          
Level 2 Grade 1 Restaurant/Café Worker $805.10 $21.19 $825.20 $21.72
Level 3 Grade 2 Restaurant/Café Worker $832.80 $21.92 $853.60 $22.46
Level 5 Grade 3 Restaurant/Café Worker $932.60 $24.54 $955.90 $25.16
CHEF STREAM          
Level 4 Grade 1 – Chef $877.60 $23.09 $899.50 $23.67
Level 5 Grade 2 – Chef $932.60 $24.54 $955.90 $25.16
Level 6 Grade 3 – Chef $957.60 $25.20 $981.50 $25.83

 

 

The use of the simplified classification structure is subject to a number of safeguards and procedural rules as detailed below.

 

2. Payment of an “Exemption Rate” Instead of Paying Penalties and Overtime

The second key change is an ability from 11 August 2021 for employers to pay a higher “Exemption Rate” instead of paying penalty rates and overtime rates.

This only relates to full-time employees classified as Level 5 or Level 6 under the Food and Beverage or Kitchen “streams” in the Restaurant Award, namely:

  • Food and beverage supervisors
  • Cook Grade 4 (tradesperson) meaning “a demi chef or equivalent who has completed an apprenticeship or passed the appropriate trade test or who has the appropriate level of training and who is engaged to perform general or specialised cooking, butchering, baking or pastry cooking duties or supervises and trains other cooks and kitchen employees”
  • Cook grade 5 (tradesperson) meaning “a chef de partie or equivalent who has completed an apprenticeship or passed the appropriate trade test or who has the appropriate level of training in cooking,
    butchering or pastry cooking” and who performs any of the following: (a) general and specialised duties, including supervision or training of kitchen employees; or (b) ordering and stock control; or (c) supervising other cooks and kitchen employees in a single kitchen establishment.”

 

For such employees, they are able to agree to enter into an agreement with their employer where they will be paid at least 170% of the usual minimum hourly rates of pay for their level (the “Exemption Rate”).

If they are paid this rate they will no longer be entitled to the following entitlements under the Restaurant Award:

a. clauses 16.5 and 16.6 (meal break);
b. clause 21 (allowances);
c. clause 23 (overtime rates) but not clause 23.2; and
d. clause 24 (penalty rates).

 

This higher hourly Exemption Rate can be paid for all hours up to 57 hours per week. But where an employee works in excess of 57 hours in a week they must be paid:

a. 150% of the Exemption Rate for the first two hours in excess of 57 hours in the week; and then
b. 200% of the Exemption Rate thereafter in the week.

 

The Exemption Rate must be used for the purposes of calculating personal leave and annual leave.

Payment of the Exemption Rate is subject to a number of safeguards and procedural rules as detailed at the end of this summary.

 

3. Payment of a Flat “Substitute Allowance” Instead of Individual Allowances

The third major change is an ability for employers and employees to agree that an employee will be paid a “Substitute Allowance” instead of individual allowances under the Restaurant Award.

This can apply to any type of employee (full-time, part-time or casual) at any classification level. The amount of the allowance is as follows:

Employee Level Allowance per hour from 11 August 2021 Allowance per hour from 1 November 2021
Introductory $1.60 $1.64
Level 1 $1.60 $1.64
Level 2 $1.02 $1.05
Level 3 $0.98 $1.00
Level 4 $0.90 $0.92
Level 5 $1.01 $1.04
Level 6 $1.08 $1.11

 

The Substitute Allowance is paid in substitution for the following entitlements under the Restaurant Award:

a. clauses 16.5 and 16.6 (meal break);
b. clause 21.2 (meal allowance);
c. clause 21.3 (split shift allowance);
d. clause 21.4 (tool and equipment allowance);
e. clause 21.5 (special clothing allowance); and
f. clause 21.6 (distance work allowance).

 

An agreement must either be made at an individual employee-employer level or alternatively, it can be applied to the whole workforce if an employer and at least 75% of the employees in the workplace agree.

The Substitute Allowance is stated to be paid “for all purposes” of the Restaurant Award, meaning it will also be used when calculating any penalties or loadings or payment whilst the employee is on leave.

Payment of the Substitute Allowance is subject to various safeguards and procedural requirements, as explained further below.

 

Safeguards and Procedural Requirements

The changes are subject to a number of safeguards and procedural requirements as detailed below.

Agreements must be recorded in writing
Where an employer and an individual employee enter into an agreement in respect of the Exemption Rate or Substitute Allowance, the agreement must:

a. be in writing;
b. specify, in writing, that either party may withdraw from the agreement by giving 4 weeks’ notice;
c. be signed by the employer and the employee; and
d. state the date the agreement commences operation.

 

Agreements with at least 75 per cent of employees in respect of the Substitute Allowance Where an employer and 75% of their employees enter into an agreement in respect of the Substitute

Allowance, the agreement must:

a. be in writing;
b. be signed by at least one of the employees; and
c. state the date the agreement commences operation.

 

Termination of Agreements
Where an employer and individual employee enter into an agreement in respect of the Exemption Rate or Substitute Allowance either party may terminate that agreement by giving the other party no less than 4 weeks’ notice in writing.

Agreements in respect of the Substitute Allowance made by the employer and at least 75% of the employees can be terminated by 50% plus one of the employees being covered by the agreement serving 4 weeks’ notice on the employer in writing.

 

Consultation
Prior to initiating any of the new provisions, the employer must consult with all employees affected by the proposed change and their representatives (if any).

For the purpose of the consultation, the employer must:

a. Provide to the employees and their representatives (if any) information about the proposed change (for example, information about the nature of the change and when it is to begin); and
b. Invite the employees to give their views about the impact of the proposed change on them (including any impact on their family or caring responsibilities) and also their representative (if any) to give their views about that impact;
c. The employer must then consider any views given under paragraph (b) above.

 

Arbitration
The changes also provide for the Fair Work Commission to arbitrate any disputes regarding the new provisions.

 

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.

 

 

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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