Major changes to the Restaurant Award from 11 August 2021

The Fair Work Commission has confirmed its provisional view (as reported in our previous article), to make sweeping changes to the Restaurant Industry Award from 11 August 2021. The changes are expressed as temporary changes and will operate for an initial period of up to a year.

In summary, there are three changes:

1. 1. An optional simplified classification structure
   2. An ability for an employer and senior employee (eg Supervisor, Head Chef, etc) to agree to pay a higher flat rate of pay, instead of overtime or penalty rates for up to 57 hours per week (the “Exemption Rate”);
   3. An ability for employers and employees to agree to pay a flat allowance rate, in substitute for allowances that arise under the Restaurant Award (the “Substitute Allowance”).

The Fair Work Commission’s decision includes a draft determination setting out the wording of the new clauses which will be finalised shortly, but no significant amendments are anticipated.

We explain the operation of the new provisions below.

A simplified classification structure

From 11 August 2021, employers can choose to “opt in” to a simplified classification structure. Unlike the other changes detailed below, this does not depend on employees agreeing to the change.

If the employer chooses to use the simplified classification structure, it must do so for all relevant employees (it cannot just “cherry pick” the employees it wishes it to apply to). The simplified classification structure applies to any employee above the current “Introductory Level” in the Food and Beverage and Kitchen streams, employees at the Introductory Level will be unaffected by an employer choosing to implement the new classification structure.

The simplified classification structure is as follows:

AA.2 Restaurant/Café Worker Grade 1

AA.2.1 Means an employee who is engaged in any of the following:

(a) picking up glasses; or

(b) providing general assistance to food and beverage attendants of a higher classification not including service to customers; or

(c) removing food plates; or

(d) setting or wiping down tables; or

(e) cleaning and tidying associated areas; or

(f) receiving money; or

(g) cooking breakfasts and snacks, baking, pastry cooking or butchering; or

(h) general cleaning duties within a kitchen or food preparation area and scullery, including cleaning cooking and general utensils used in a kitchen and restaurant; or

(i) assisting employees who are cooking; or

(j) assembling and preparing ingredients for cooking; or

(k) general pantry duties.

AA.2.2 In addition to the duties set out in AA.2.1, means an employee who has not achieved the appropriate level of training and who is engaged in any of the following:

(a) supplying, dispensing or mixing liquor; or

(b) assisting in the cellar; or

(c) undertaking general waiting duties for food or beverages, including cleaning tables; or

(d) receiving money; or

(e) attending a snack bar; or

(f) performing delivery duties; or

(g) taking reservations and greeting and seating guests.

AA.2.3 In addition to the duties set out in AA.2.1 and AA.2.2, means an employee who has the appropriate level of training, and who is engaged in specialised non-cooking duties in a kitchen or food preparation area.

AA.3 Restaurant/Café Worker Grade 2

AA.3.1 Means an employee who has the appropriate level of training and is engaged in any of the following:

(a) supplying, dispensing or mixing liquor; or

(b) assisting in the cellar; or

(c) undertaking general waiting duties for both food and liquor, including cleaning tables; or

(d) receiving money; or

(e) assisting in the training and supervision of food and beverage attendants of a lower classification; or

(f) delivery duties; or

(g) taking reservations and greeting and seating guests; or

(h) cooking duties such as baking, pastry cooking or butchering.

AA.3.2 In addition to the duties set out in AA.3.1, means an employee who has the appropriate level of training, which may include a supervisory course, and who has responsibility for the supervision, training and co-ordination of kitchen attendants of a lower classification.

AA.4 Restaurant/Café Worker Grade 3

AA.4.1 Means an employee who has the appropriate level of training, which can include a supervisory course, who:

(a) carries out specialised skilled duties in a fine dining room or a restaurant; or

(b) has responsibility for the supervision, training and co-ordination of food and beverage staff or for stock control for one or more bars.

NOTE: To avoid any doubt, an employee classified in one of the classifications set out in this Schedule shall perform all the duties of the classification as required by the employer.

AA.5 Chef stream

AA.5.1 Chef grade 1 (tradesperson) means a commi chef or equivalent who has completed an apprenticeship or passed the appropriate trade test or who has the appropriate level of training, and who is engaged in cooking, baking, pastry cooking or butchering duties.

AA.5.2 Chef grade 2 (tradesperson) means a demi chef or equivalent who has completed an apprenticeship or passed the appropriate trade test or who has the appropriate level of training and who is engaged to perform general or specialised cooking, butchering, baking or pastry cooking duties or supervises and trains other cooks and kitchen employees.

AA.5.3 Chef grade 3 (tradesperson) means a chef de partie or equivalent who has completed an apprenticeship or passed the appropriate trade test or who has the appropriate level of training in cooking, butchering or pastry cooking and who performs any of the following:

(a) general and specialised duties, including supervision or training of kitchen employees; or

(b) ordering and stock control; or

(c) supervising other cooks and kitchen employees in a single kitchen establishment.

The relevant pay rates under the new classification structure are as follows (including rates from when the Restaurant Award rates increase as of 1 November 2021), the rates will be subject to usual rules regarding penalty rates, overtime rates, casual loading, etc.

The use of the simplified classification structure is subject to a number of safeguards and procedural rules as detailed at the end of this article.

Payment of an “exemption rate” instead of paying penalties and overtime

The second key change is an ability from 11 August 2021 for employers to pay a higher “Exemption Rate” instead of paying penalty rates and overtime rates.

This only relates to full-time employees classified as Level 5 or Level 6 under the Food and Beverage or Kitchen “streams” in the Restaurant Award, namely:

• Food and beverage supervisors
• Cook Grade 4 (tradesperson) meaning “a demi chef or equivalent who has completed an apprenticeship or passed the appropriate trade test or who has the appropriate level of training and who is engaged to perform general or specialised cooking, butchering, baking or pastry cooking duties or supervises and trains other cooks and kitchen employees”
• Cook grade 5 (tradesperson) meaning “a chef de partie or equivalent who has completed an apprenticeship or passed the appropriate trade test or who has the appropriate level of training in cooking, butchering or pastry cooking” and who performs any of the following: (a) general and specialised duties, including supervision or training of kitchen employees; or (b) ordering and stock control; or (c) supervising other cooks and kitchen employees in a single kitchen establishment.”

For such employees, they are able to agree to enter into an agreement with their employer where they will be paid at least 170% of the usual minimum hourly rates of pay for their level (the “Exemption Rate”).

If they are paid this rate they will no longer be entitled to the following entitlements under the Restaurant Award:

(a) clauses 16.5 and 16.6 (meal break);

(b) clause 21 (allowances);

(c) clause 23 (overtime rates) but not clause 23.2; and

(d) clause 24 (penalty rates).

This higher hourly Exemption Rate can be paid for all hours up to 57 hours per week. But where an employee works in excess of 57 hours in a week they must be paid:

(a) 150% of the Exemption Rate for the first two hours in excess of 57 hours in the week; and then

(b) 200% of the Exemption Rate thereafter in the week.

The Exemption Rate must be used for the purposes of calculating personal leave and annual leave.

Payment of the Exemption Rate is subject to a number of safeguards and procedural rules as detailed at the end of this article.

Payment of a flat “Substitute Allowance” instead of individual allowances

The third major change is an ability for employers and employees to agree that an employee will be paid a “Substitute Allowance” instead of individual allowances under the Restaurant Award.

This can apply to any type of employee (full-time, part-time or casual) at any classification level. The amount of the allowance is as follows:

The Substitute Allowance is paid in substitution for the following entitlements under the Restaurant Award:

(a) clauses 16.5 and 16.6 (meal break);

(b) clause 21.2 (meal allowance);

(c) clause 21.3 (split shift allowance);

(d) clause 21.4 (tool and equipment allowance);

(e) clause 21.5 (special clothing allowance); and

(f) clause 21.6 (distance work allowance).

Agreement must either be made at an individual employee-employer level, or alternatively it can be applied to the whole workforce if an employer and at least 75% of the employees in the workplace agree.

The Substitute Allowance is stated to be paid “for all purposes” of the Restaurant Award, meaning it will also be used when calculating any penalties or loadings or payment whilst the employee is on leave.

Payment of the Substitute Allowance is subject to various safeguards and procedural requirements, as explained further below.

Safeguards and procedural requirements

The changes are subject to a number of safeguards and procedural requirements as detailed below.

Agreements must be recorded in writing

Where an employer and an individual employee enter into an agreement in respect of the Exemption Rate or Substitute Allowance, the agreement must:

(a) be in writing;

(b) specify, in writing, that either party may withdraw from the agreement by giving 4 weeks’ notice;

(c) be signed by the employer and the employee; and

(d) state the date the agreement commences operation.

Agreements with at least 75 per cent of employees in respect of the Substitute Allowance

Where an employer and 75% of their employees enter into an agreement in respect of the Substitute Allowance, the agreement must:

(a) be in writing;

(b) be signed by at least one of the employees; and

(c) state the date the agreement commences operation.

Termination of Agreements

Where an employer and individual employee enter into an agreement in respect of the Exemption Rate or Substitute Allowance either party may terminate that agreement by giving the other party no less than 4 weeks’ notice in writing.

Agreements in respect of the Substitute Allowance made by the employer and at least 75% of the employees can be terminated by 50% plus one of the employees being covered by the agreement serving 4 weeks’ notice on the employer in writing.

Consultation

Prior to initiating any of the new provisions, the employer must consult with all employees affected by the proposed change and their representatives (if any).

For the purpose of the consultation, the employer must:

(a) Provide to the employees and their representatives (if any) information about the proposed change (for example, information about the nature of the change and when it is to begin); and

(b) Invite the employees to give their views about the impact of the proposed change on them (including any impact on their family or caring responsibilities) and also their representative (if any) to give their views about that impact.

(c) The employer must then consider any views given under paragraph (b) above.

Arbitration

The changes also provide for the Fair Work Commission to arbitrate any disputes regarding the new provisions.

Need further help?

If you need further help on any of the matters raised in this article please contact EI Legal.

Other articles that may interest you

Significant changes to the Restaurant Industry Award likely

Disclaimer

The information provided in these blog articles is general in nature and is not intended to substitute for professional/legal advice. If you are unsure about how this information applies to your specific situation we recommend you contact EI Legal for advice.