Australia: Amendments to Professional Employees Award 2020 Will … – Lexology

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On January 20, 2023, Australia’s Fair Work Commission (FWC) issued an important decision that makes significant amendments to the Professional Employees Award 2020 (Award). Documents known as “modern awards” in Australia are statutory terms and condition of employment that apply to certain employees in the information technology, medical research, quality auditing or telecommunications services industries. The FWC addressed two issues in respect of the Award: (1) hours of employment and overtime and (2) the coverage of the Award.
The FWC found that full-time professional employees covered by the Award, such as consulting engineers, IT professionals, and scientists, frequently work hours well above 38 per week, either on a regular basis or during peak work periods. Such employees are usually paid an annual salary that is intended to cover all hours worked, and often do not have any fixed hours of work. They are usually not paid any overtime payments for hours worked exceeding 38 per week and are only rarely granted time off in lieu of overtime pay (TOIL) for additional hours.
The FWC considered it necessary to prescribe special rates of compensation for additional and unsociable hours for full-time employees for the Award to meet the modern awards objective of establishing a fair and relevant safety net.
The FWC intends to adopt a “minimalist” approach to remedy the status quo where “award-reliant” employees at the lower classification levels may be “low paid” when they work significant additional hours without disrupting the degree of flexibility appropriate for professional salaried employment. Specifically, the Award will be amended to include the following:
The above requirements will not apply to employees covered by the Award who have a contractual entitlement to an annual salary that is 25% or more in excess of the minimum annual wage for the appropriate classification in clause 14.
Regarding the second issue (coverage of the Award), the FWC clarifies that the classifications will apply to all employees who perform professional engineering duties, professional scientific duties, professional information technology duties or quality auditing unless the person holds a position that is principally managerial in nature. There will be no need to apply the “principal purpose” test. The FWC deemed the variation necessary to clarify the coverage of the Award in a manner consistent with the current classification definitions.
We expect the variations to become effective in the coming months. For employers that have employees that are covered by the Award, we recommend taking the following steps:
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