The Sun Sets On Award Transitional Provisions

Modern awards commenced on 1 January 2010.  All modern awards contained similar transitional provisions which allowed modern awards to phase in over a period of five years.

The transitional provisions contained sunset clauses which provided that certain transitional provisions expired on 31 July 2014 while others expired on 31 December 2014.

The transitional provisions dealt with the phasing in of differential payments which applied under pre-modern awards as compared with modern awards.  The phasing in, including payments in relation to minimum wages, piece work rates, casual or part-time loadings, shift allowances and penalties, as well as penalties payable for work done on Saturday, Sunday and public holidays.

There were also transitional provisions in relation to accident make-up pay, district allowances, and a higher redundancy pay.

Late last year the ACTU made an application to extend the operation of the transitional provisions in relation to accident make-up pay and district allowances, however the Fair Work Commission refused to extend the operation of the transitional provisions.

Accident Make-up Pay

The entitlement to a workers compensation payment is a State-based entitlement.  Each State has different entitlements which apply to workers claiming workers compensation.  All workers compensation schemes reduce the level of weekly payments that an employee would be entitled when compared to the employee’s normal wage.

A pre-modern award accident make-up pay provision requires the employer to pay the employee the difference between what the employee receives from the workers compensation insurer and what the employee would be entitled to receive as ordinary pay.

The award modernisation decision of the Full Bench of the Fair Work Commission in 2008 anticipated that by 31 December 2014 a national standard would have been formulated to apply to accident pay arrangements for all award-covered employees.  However that has not occurred.

The consequence of the recent Fair Work Commission decision is that any award entitlement to accident pay no longer exists as from 31 December 2014 except for the Air Pilots Award 2010 and the Black Coal Mining Industry Award 2010, which are the only two awards which preserve this entitlement.

However, many employers will have negotiated an enterprise agreement with a union or their workforce.  It is likely that an enterprise agreement will preserve an entitlement to accident make-up pay.  Employers should check their enterprise agreements to see whether they contain a clause in relation to accident make-up pay.

District Allowances

Modern awards also contain district allowances to compensate workers who are required to work in specific remote areas, which were specified in the relevant modern award.  These district allowances ceased on 31 December 2014 except in relation to the Building and Construction General Onsite Award 2010 and the Manufacturing and Associated Industries Occupations Award 2010.

Redundancy Pay

A few pre-modern State awards contained redundancy provisions which were more beneficial to workers than redundancy entitlements under the National Employment Standards.  From 31 December 2014 those more beneficial redundancy entitlements will no longer apply, and any employee who is made redundant from 1 January 2015 will be entitled to redundancy pay in accordance with the National Employment Standards.