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26 March 2020

Awards to be varied for COVID-19

Yesterday the Fair Work Commission made its first determination varying a modern award in response to the challenges being experienced by employers and employees as a result of the COVID-19 pandemic.

Yesterday the Fair Work Commission made its first determination varying a modern award in response to the challenges being experienced by employers and employees as a result of the COVID-19 pandemic.

The application was made by the Australian Hotels Association, with the support of the United Workers Union, seeking a special COVID-19 flexibility schedule to be placed into the Hospitality Industry (General) Award 2010.

The flexibility schedule allows employers to do the following:

  • Employers may direct an employee to perform where necessary, any duties within their skills, licences and qualifications and competencies regardless of their classifications. In cases where this results in an employee performing a higher classification, employees will be paid in accordance with the higher duties provisions of the Award.
  • A full-time employee may be directed to work an average between 22.8 and 38 ordinary hours per week. In such case the employee will be paid on a pro-rata basis, with overtime to be applied on a pro-rata basis.
  • Employees who are engaged as part time employees may be directed to work an average of between 60% and 100% of their guaranteed hours per week or an average per week over the roster cycle.

Before making any changes, employers must follow the consultation provisions set out in the Award and, for those employees who are union members, employers will be required to notify the United Workers Union of the employer’s intention to implement the changes.

When an employer and employee enter an arrangement under the new flexibility schedule, employees will continue to accrue their annual leave and personal leave entitlements (and any other applicable accruals) based on the employee’s ordinary hours of work prior to entering into the flexibility schedule.

Employees will also be able to take periods of leave based on the ordinary hours of work prior to the commencement of the schedule.

The flexibility schedule allows an employer to, subject to considering an employee’s personal circumstances, direct an employee to take annual leave with 24 hours’ notice. In instances where it is appropriate, the changes to the Award will also allow employers and employees to agree for an employee to take twice as much annual leave at half the rate of pay for all or part of the annual leave period.

The determination, which commenced yesterday and will expire on 30 June 2020, with the possibility of further extension, was enacted in record time, demonstrating a real commitment by those within the industrial relations landscape to implement greater flexibility for employers and employees during this difficult time.

Currently, other employer associations and their respective unions are in consultation regarding further changes to those key modern awards utilised frequently by businesses across Australia. We anticipate that these will be released in the coming days or weeks.

For those employers who operate under the terms of an enterprise agreement, there are opportunities under the Fair Work Act for similar variations to be made. If this is something that your business would like to explore, please call us and we can discuss these options further.

The decision from the Fair Work Commission yesterday demonstrates that the industrial relations system is rapidly trying to manage the disruptions to business and employment which the COVID-19 pandemic has had throughout Australia. In instances where common sense variations can benefit both employers and employees within Australia, it appears the Fair Work Commission is acting quickly to support the economy to the extent possible.

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This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please let us know.

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