In brief - The Fair Work Commission has significantly increased the number of employees covered by modern awards by varying the coverage of the Miscellaneous Award 2010 from 1 July 2020
What is the Miscellaneous Award 2010 and who has it typically covered?
When the Fair Work Act 2009 (Cth) (FW Act) was introduced, modern awards were created to streamline the industrial instruments that operated in certain industries and occupations.
One part of the modern awards objective was to reduce the complexity of industrial relations. Modern awards were never intended to cover employees who were not traditionally covered by previous awards because of their seniority or because of the type of work they performed, although new awards could be created.
At the time, there was an acknowledgement that some employees who had been traditionally covered by State-based awards may miss out on award coverage under the FW Act by omission or because there was no modern award drafted for the type of work they performed. To make sure that these employees were not left without the benefit of award coverage, the Miscellaneous Award 2010 was created.
Since 2010, the Miscellaneous Award 2010 has typically covered employers and their employees who did not fit within the industry or occupation coverage of another modern award, but who could fit within the Miscellaneous Award 2010 and were not senior or in a management position.
However, litigation concerning the coverage of the Miscellaneous Award 2010 since its introduction has highlighted the unintended complexity in assessing coverage. The Fair Work Commission was concerned that not varying the Miscellaneous Award 2010 to specify the classes (types) of employees excluded would continue disparity in coverage.
As part of the Fair Work Commission's four yearly review proceedings, a Full Bench of the Fair Work Commission recently determined that some of the existing exclusions from coverage in the Miscellaneous Award 2010 were not appropriate and failed to meet the modern awards objective contained in the FW Act. As a result, the Full Bench determined that the Award should be varied (effective from 1 July 2020) in the following way (strikethrough means deletion):
4.2 The award does not cover
those classes of employees who, because of the nature or seniority of their role, have not traditionally been covered by awards including managerial employees and professional employees such as accountants and finance, marketing, legal, human resources, public relations and information technology specialists.
4.3 The award does not cover employees:
(a) in an industry covered by a modern award who are not within a classification in that modern award; or
(b) in a class exempted by a modern award from its operation, or employers in relation to those employees.
In summary, the Full Bench decision changed two things:
It removed the reference to the class of employees who have not traditionally been covered by awards because of the nature or seniority of their role as employees excluded from coverage. This means those senior employees are now eligible to be covered by the Miscellaneous Award; and
it removed exclusions from coverage for employees who fall outside of, or were exempted from, other modern awards, on the basis there was no evidence to support excluding any particular class of employees.
What does this mean?
In simple terms, the coverage of the Miscellaneous Award 2010 will extend to cover employees up to and including trade qualification level who are not already covered by another modern award and who are not excluded from coverage by the FW Act.
The reality however is likely to be more complex. In its decision, the Full Bench gave the example of cleaners who are not covered by the Cleaning Services Award 2010 (because that Award is limited in coverage to employers in the contract cleaning services industry) and security guards not covered by the Security Services Industry Award 2010 (because coverage of that Award is limited to employers in the security services industry). Both of these groups of employees will now likely be covered by the Miscellaneous Award if employed by an employer who is not in the cleaning services or security services industry (for example a cleaner employed to perform cleaning duties in a call centre or a security guard employed on a building or construction site).
Managerial employees and professional employees such as accountants and finance, marketing, legal, human resources, public relations and information technology specialists who are not otherwise covered by an award will continue to be award-free and it is here where the inconsistency becomes most notable. Accountants in a bank, for example, may be covered by the Banking, Finance and Insurance Award 2010, whereas an accountant in an accounting firm will be award-free. Similarly, an IT professional in a specialist IT firm may be covered by the Professional Employees Award 2010, whereas in-house IT support will be award-free. If an employer is unsure whether an employee will be covered by an award, it is important that employers seek advice on their award obligations to ensure they meet their compliance obligations.
What are the implications for employers?
This issue is likely to be particularly relevant in the current environment because, although the changes to the Miscellaneous Award 2010 are not linked to the COVID-19 pandemic, consideration of the increasing potential for stand down and redundancies must be undertaken in the knowledge that certain employees may not be entitled to the benefits of mandatory consultation in the Award where this was previously not the case.
We recommend that all employers audit their workforce to identify whether any employees who were previously considered award-free may soon be covered by the Miscellaneous Award 2010 and to seek advice regarding the implications of this change well in advance of the 1 July 2020 deadline. Importantly, employers will need to ensure they meet the minimum standards in the Award when managing their employees' recruitment, pay and conditions.
Award coverage also creates an entitlement to protection from unfair dismissal where this may not have previously been the case. Employers will need to be mindful of the new coverage provisions in ensuring employees are afforded procedural fairness to mitigate against the risk of new claims.
In addition, employers who are bargaining with their employees for a new enterprise agreement will need to consider whether the Miscellaneous Award 2010 covers employees falling within the scope of the new agreement in order to satisfy the better off overall test and to ensure any proposed enterprise agreement is capable of being approved by the Fair Work Commission.
This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2020.