In mid 2020 the Fair Work Commission made a variation to the coverage provisions of the Miscellaneous Award 2020 (Award) which dramatically increased the potential application and scope of the Award to cover employees who would otherwise be ‘award-free’.
The Award has historically acted as a ‘catch-all’ to cover employees who were traditionally award-covered but who were not covered by any of the other modern awards.
Prior to 1 July 2020, the coverage provisions in the Award (including the previous 2010 version of the Award) included the following exclusions:
4.2 The award 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.
4.3 The award does not cover employees:
- in an industry covered by a modern award who are not within a classification in that modern award; or
- in a class exempted by a modern award from its operation,
or employers in relation to those employees.
In March 2020 the Commission conducted a review of the Award and noted the Fair Work Act also contained provisions that excluded from award coverage any classes of employees who, because of the nature or seniority of their role, have traditionally not been covered by awards, or who perform work that is not of a similar nature to work traditionally regulated by awards.
The Commission therefore determined clauses 4.2 and 4.3 of the Award were largely redundant and liable to give rise to confusion and conflict.
The Commission considered the coverage terms would, for example, exclude from coverage any employee who performed work of a kind that was traditionally award-covered (e.g. a cleaner), but was nevertheless not covered by an award on account of the industry of the employer.
Thus the Award was varied with effect from 1 July 2020 by:
- amending clause 4.2 to read “The award does not cover managerial employees and professional employees such as accountants and finance, marketing, legal, human resources, public relations and information technology specialists”
- deleting clause 4.3
As a result workers may no longer be excluded from this Award simply because they work in an industry that does not have a modern award and/or because their position does not correspond to a classification within a relevant industry award.
Employees who were previously considered to be award-free may now in fact be covered by this Award and therefore entitled to the minimum rates of pay and other benefits prescribed by it from 1 July 2020.
Action Items
In light of the Award variation every employer who employs staff they consider to be award-free must:
- re-consider the issue of modern award coverage under the Award
- ensure employees who are covered by the Award are being paid at or above the Award minimum entitlements from 1 July 2020 (and correct any underpayments and any other Award non-compliance)
- notify all affected employees of their coverage by the Award from 1 July 2020 and disclose any resulting underpayments
- amend their pro-forma employment agreements to refer to the Award, comply with all administrative requirements prescribed by the Award, and ensure that any set-off clause captures (to the extent legally possible) all applicable Award entitlements
