News

02/02/21

AHA lodges submissions in Major Award Flexibility Case

In December 2020 the Fair Work Commission (‘FWC’) commenced the process of determining the potential for greater flexibilities in Awards covering the Hospitality and Retail Sectors. This was in response to a written request from the Minister for Industrial Relations, Christian Porter MP.

The Minister requested that the FWC use its powers under the Fair Work Act 2009 (Cth) to make amendments to a number of priority modern awards in those sectors hardest hit by the pandemic.   

This affects the following awards in the hospitality and retail sectors:

  • Hospitality Industry (General) Award 2020
  • Restaurant Industry Award 2020
  • Registered and Licenced Clubs Award 2020
  • General Retail Industry Award 2020

The Minister in his letter to FWC President Justice Ross identified that as a result of stakeholder meetings held between employer groups and unions during the height of the COVID-19 Pandemic there were a number of award flexibility measures that ‘could prove critically important for providing businesses in the most distressed part of the economy with the confidence to increase hiring during the recovery’. The two key areas included:

  • To potentially simplify pay arrangements in the form of ‘loaded rates’ and/or ‘exemption rates’ designed to reduce the cost of administrative burden for employers and address existing pay rate complexities.  
  • Further streamlining of present classification structures so that they are clearer, easier to understand and simpler to apply.

Nationally the AHA has put forward initial submissions and proposals to the FWC to vary the Hospitality Industry (General) Award 2020 (‘HIGA’). The AHA has submitted four proposals in relation to the HIGA including:    

  • Consolidation of Junior Employee Classifications Rates
  • Simplification of hours of work arrangements
  • Simplification of late night/early morning penalties; and
  • Introduction of loaded rates

In relation to loaded rates the AHA has proposed the introduction of 6 loaded rates for full-time employees to simplify the administration and understanding of entitlements and payroll for employers and employees.

The loaded rates are based on the base hourly rate for the respective classification plus a specific loading (see table below).

 

40 hour proposals

 

A

Monday to Friday 40 hours

10% loading on base rate

B

Monday to Saturday 40 hours

19% loading on base rate

C

Monday to Sunday 40 hours

28% loading on base rate

 

 

 

 

45 hour proposals

 

D

Monday to Friday 45 hours

20% loading on base rate

E

Monday to Saturday 45 hours

25% loading on base rate

F

Monday to Sunday 45 hours

35% loading on base rate

 

 

 

 

In each case the loaded rate would compensate the employee for work performed:

  • Between 7am-Midnight (Mon to Fri)
  • Saturday (Max of 10 hrs)
  • Sunday (Max of 10 hrs)
  • Overtime up to the relevant 40 or 45 hour range
  • Split Shift allowance
  • Tool allowance
  • Buffer of $10 per week

Work performed on public holidays or in excess of daily/weekly limits is proposed to be paid at the applicable award overtime or public holiday rate. 

Initial directions hearings were convened in mid-December 2020 and there is another direction hearing on 4 February 2021.

A copy of the AHA submission can be downloaded HERE



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