The Fair Work Commission has made a determination finalising the variations that will be made to the Professional Employees Award which will come into effect on 16 September 2023.
As reported in our previous article, the Fair Work Commission recently took a provisional view that the Award should be varied so that penalty and overtime rates will be introduced into the Award for the first time.
What was the Fair Work Commission’s provisional view?
The Fair Work Commission’s provisional view was that going forward, the Award will operate as follows:
- The minimum annual salaries set in the Award will cover 38 ordinary hours of work per week, although employees must be paid additional amounts where any such hours are at unsociable times or at the weekend.
- Employees can be required to work additional hours over 38 hours per week, where this is reasonable, subject to the extra payment provisions below.
- Employees must be paid their ordinary hourly rate for any hours worked in excess of 38 hours per week. The FWC stated that “this shall include work on or in connection with call-backs and work performed on electronic devices or otherwise remotely”.
- A penalty rate of 125% will be payable for all hours worked (whether ordinary or overtime hours) before 6.00 am or after 10.00 pm on any day Monday to Saturday. For casual employees, this is in addition to their casual loading. This includes any hours included within an employee’s 38 ordinary hours.
- A penalty rate of 150% will be payable for hours worked (whether ordinary or overtime hours) worked on a Sunday or public holiday. Again, for casual employees, this is in addition to their casual loading. This includes any hours included within an employee’s 38 ordinary hours.
- The employer must keep records of all hours worked by an employee in excess of 38 per week, or worked before 6.00 am or after 10.00 pm on any day Monday to Saturday, or worked at any time on a Sunday or public holiday.
- A standard clause allowing employees to agree to paid time off in lieu (TOIL) instead of payment for overtime will be introduced into the Award.
The Fair Work Commission also proposed that there be an exception to all the obligations set out above for employees who have a contractual entitlement to an annual salary that is 25% or more in excess of the appropriate minimum annual salary set by the Award.
What has the Fair Work Commission now decided?
The Fair Work Commission has now confirmed that these changes will be implemented from 16 September 2023, subject to two additions:
- Employers will be able to agree with employees to average an employee’s ordinary hours over a period of 13 weeks (ie so that if they work an average of 38 ordinary hours over that period, overtime will not be payable)
- Given that the Award will now makes clear that employees are to be paid for any work done remotely (including on electronic devices after leaving the workplace), employees will be required to keep a record of such hours worked, specifically the Award will state: “An employee who performs remote work outside of ordinary hours must maintain and provide to their employer a time sheet or other record acceptable to the employer specifying the time at which they commenced and concluded performing any remote work and a description of the work that was undertaken. Such records must be provided to the employer within a reasonable period of time after the remote work is performed.”
What are the consequences for employers?
As noted in our previous article, the consequence of the changes for employers are that, where employees are working more than 38 ordinary hours, at weekends or early mornings / late evenings they will now be entitled to additional payments unless the employer can pay a salary set at least 25% above the minimum rate set by the award.
If they pay a salary of 25% more than the minimum, none of these new provisions will apply.
Employers have until 16 September 2023 to get ready for these changes and if they require any assistance should contact us.
A copy of the Fair Work Commission’s decision is available here.