The Penalty Rate Protection Law has been passed, which will ensure employees cannot trade off their penalty rate to be paid less than they would have been paid under the relevant award. “A senior Albanese government minister has admitted that unions could use new laws protecting penalty rates to apply to unwind existing salary arrangements or time off in lieu conditions across the economy”, David Martin-Guzman, Workplace Correspondent, AFR.
Is this the end of Annualised Salaries and paying employees a salary at all, instead of award conditions? This legislation in parallel with the Better Off Overall Test (Boot) requirements it may be.
Inzenius will be able to calculate the relevant award entitlement for the time worked for salary employees, measured against the actual salary paid every pay period, for a pay adjustment to be processed where required.#ThatsInzenius #Payroll
David Marin-Guzman Workplace Correspondent AFR
A senior Albanese government minister has admitted that unions could use new laws protecting penalty rates to apply to unwind existing salary arrangements or time off in lieu conditions across the economy.
Parliament passed the government’s Protecting Penalty Rates Bill on Thursday morning, sparking employer outcry that it would open the door to remove decades-old flexibility conditions and discourage work from home arrangements that involve irregular hours.
Minister for Environment and Water, and former workplace minister, Murray Watt told the Senate on Wednesday the government had not tightened up its Protecting Penalty Rates bill to stop it applying it to existing award conditions as “you don’t set awards in stone forever”.
Minister for Employment and Workplace Relations Murray Watt: “It will be up to the commission to determine how it is interpreted and applied.” Alex Ellinghausen
Labor proposed the measure at the election to stop current employer applications to introduce conditions in awards, such as retail, to roll up penalty rates into higher salaries or exempt higher earners from award conditions.
However, top workplace law experts say the bill’s drafting goes much further than intended and threatens to create a path to remove more than 20 annualised salary provisions or exemption rates in awards.
Responding to Coalition questions about unions using the new laws to remove existing conditions, Watt said: “The new principle will apply when the commission is exercising its power to make, vary or revoke a modern award [provision].
“Just as today there will be unions and employer groups seeking to vary terms and conditions in an award – either to raise pay rates, reduce pay rates, add conditions or take away conditions – then I’m sure some people will make use of this provision once it’s passed.
“It will be up to the commission to determine how it is interpreted and applied through the usual consultative process with parties.”
He said there were 22 annualised salary arrangements in awards.
Workplace Relations Minister Amanda Rishworth last month introduced amendments purporting to deal with employer concerns that the bill could apply to existing award conditions.
However, leading workplace law expert, Queensland University of Technology Professor Andrew Stewart, said the amendments only clarified that the new test would not require the Fair Work Commission to initiate a review of existing conditions that involve any reduction in penalty rates.
That did not stop an application to vary or revoke those conditions.
“It would plainly be open for the FWC to be asked to vary an existing award to bring it into compliance with the new [test],” he said in a submission to the Senate inquiry into the bill.
“As such, all provisions falling within the scope of the new limitation, which as noted above might include not just exemption rates but annualised wage arrangements and even time off in lieu clauses, could be subject to challenge.”
The Department of Employment and Workplace Relations told the Senate committee that “existing award arrangements will … continue to operate following passage of the bill”.
However, opposition industrial relations spokesman Tim Wilson said that “Minister Watt has said the quiet bit out loud”.
“That means small business who’ve done the right thing under existing rules could be dragged back before the wage regulator, and hit by unions looking to tax their take.”
Australian Industry Group chief executive Innes Willox said “if the bill passes in its existing form and acts as a catalyst for union claims to remove existing flexibilities … there will be an urgent need for the government to implement further legislation to address this unintended consequence”.
Australian Chamber of Commerce and Industry chief executive Andrew McKellar said the bill went beyond Labor’s election promise and would interfere with businesses’ ability to allow staff to work when they want.
“This will restrict the ability for business to provide the flexibility that employees increasingly demand, such as the ability to work from home or other hybrid arrangements which are mutually agreeable to employers and employees,” Mr McKellar said.
“Worse, the bill opens the door to remove a range of flexibility terms that already exist in modern awards that have delivered for both employees and business for many decades,” he said.
ACTU secretary Sally McManus said the employers would no longer be able to push for exemption rates which she said leave workers “worse off overall”.
“Without these laws, workers in retail, admin, banking, and finance would stand to lose thousands of dollars a year under proposals by big employer lobby groups.”