22/04/2022

Award Classification

You’ve probably seen a bit of a pattern lately; we keep talking about these Modern Awards and for good reason. As previously mentioned, there is 121 of them, so that’s a lot of rules and regulations to remember. Thankfully there is some consistency between them which helps when you need to manage a large group of people.

One of the questions we get asked is about Award Classification and how their Employees fit into the Award they think applies to them. One common occurrence is that Employers believe that only one Award can be applicable to their business which isn’t true. There isn’t actually a limit on how many Awards can apply in one business. It could be one, it could be ten or it could be 40. There might also be a mix of Award Employees and Award Free Employees. The possibilities are endless.

Obviously, the more Awards that apply in any given business, the higher the level of compliance or understanding is needed by the Employer to ensure that they are doing everything correctly. Managing a smaller number of Awards has its advantages but doesn’t mean that a simple strategy cannot be implemented to assist even more.

The key consideration here is that the Award would be the minimum standard that would need to be followed and anything above would be known as ‘Above Award’. Commonly when this term is thrown around, it relates to payrates and entitlements. Whilst this is true, it’s also important to note that the Awards stipulate break times and specific working conditions, amongst other things. If you wish to alter some of these aspects as an offset to the money being paid above the Award, you may need to get your Employees to enter into an Individual Flexibility Agreement that stipulates why these conditions are not being met.

As such, if we take it back a step further – how do Employer’s know which Award applies?

We know the Awards are based on specific industries and roles. Within each of the Awards there are classifications and Employee levels that can be used as a comparison point. These classifications outline what skills and attributes Employees need to have and demonstrate to be classified at that level. It might include a mixture of experience, formal qualifications and tangible skills they need to possess or do to be successful at that role. That means for example if you have an Aerobics Instructor teaching in one gym, a Pilates Instructor teaching in a studio will have a comparative pay rate based on the training they have done.

A useful tool for assisting with this is the PACT Calculator (https://calculate.fairwork.gov.au/)

This tool allows you to work through the steps to pick your industry and then where your Employees fit into the pre-determined levels. Once you have established the appropriate classification you can then compare and see what the minimum pay rates and entitlements are for someone at that level. It will even give you a useful handy PDF that you can save to your Employee’s folder as a reference point. This can be done for the various types of employment status too. It is often useful when trying to determine a strategy for Permanent vs Casual Employees. It can also help you make sure that you haven’t missed any allowances (https://nowactually.com.au/allowances/) or entitlements.

If you’d like help with classifying your Employees, please let us know contact@nowactually.com.au