Fair Work Australia (FWA) has made its first
take-home pay order under the Fair Work (Transitional
Provisions and Consequential Amendments) Act 2009
(Transitional Act).
In accordance with the Transitional Act, any employee or
outworker who believes that the introduction of modern awards has
led, or will lead, to a reduction in their take-home pay is
entitled to seek a take-home order to preserve their existing rates
of pay while they remain in the same job.
In this case, the applicant was an employee of a national
retailer who generally only worked a three hour shift on
Sundays.
Prior to the General Retail Industry Award
(Modern Award) coming into effect on 1 January
2010, the employee was paid according to the Shop, Distributive
and Allied Employees Association - Victorian Shop Interim Award
1994 (Pre-Reform Award).
The employee's Pre-Reform Award rate was $19.83, whereas the
Modern Award rate was $16.47. Both hourly rates were subject to a
200% Sunday loading. Consequently, the take-home hourly rate of the
employee was $39.66 under the Pre-Reform Award, compared with
$32.94 under the Modern Award. The employee's take-home pay had
therefore decreased by $6.72 per hour.
The employer acknowledged it had amended the rates 'in line with
what the modern award specified', with the consequence of reducing
the employee's rate of pay. However, the employer stated it had
made an offer to the employee to work additional hours, at the
Modern Award rate, in order to allow her to make up for lost
income. Senior Deputy President Kaufman rejected the offer as an
acceptable alternative to a take-home pay order and ordered the
employer to:
- back-pay the employee an amount equal to the difference between
the Pre-Reform Award and the Modern Award rate for each hour that
she had worked from 1 January 2010; and
- pay the employee the hourly rate that applied to her on 31
December 2009, until either her employment ceases or the Modern
Award equals or surpasses that rate.
It is important to note that these decisions are fact-sensitive,
meaning each matter turns on its own circumstances. In this
particular case, the employee's Sunday-only work pattern had
resulted in a modernisation-related reduction in take-home pay that
satisfied the criteria for making an order set out in the
Transitional Act.
Information for employers
A take-home pay order may only be made where:
- a modern award applies to the employee(s); AND
- the employee(s) are in the same job as they were before the
modern award commenced; AND
- the amount of the employees' take-home pay (which is the pay an
employee actually receives after tax and certain deductions, but
which does include allowances, overtime payments and any
incentive-based payments) for working the same sort of hours or the
same amount of work has been reduced; AND
- this reduction has occurred because of the commencement of the
modern award.
A take-home pay order will not be made if the reduction in
take-home pay is minor or insignificant, or where workers have been
adequately compensated in other ways for the reduction.
Employees themselves, unions or a person acting on an employee's
behalf may make the application for a take-home pay order.
(Authored by Joanna Shields)