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July 1 2017 – What is changing?

A number of changes which will affecting matters such as minimum award wages, penalty rates and unfair dismissal will be taking effect from Saturday 1 July 2017.

 A summary of these changes have been outlined below:

Annual Wage Review

On 6 June 2017, the Fair Work Commission handed down its annual wage review.
The decision has varied the following:

  • Minimum wage rates in modern awards – increasing by 3.3 per cent from first full pay period commencing on or after 1 July 2017 (rounded to the nearest 10 cents)
  • National minimum wage – increasing by 3.3 per cent to $694.90 per week, or $18.29 per hour
  • Wages for juniors, apprentices – most rates are expressed as a percentage of a nominated adult rate so they will receive a proportionate increase to the adult rate
  • Wages for trainees and piece workers –National Training Wages will be increasing from the first pay period to commence on or after 1 July 2017.

Penalty Rates Changes 2017

As part of a review of modern awards undertaken by the Fair Work Commission, the decision was announced to vary certain penalty rate provisions for employees working on Sundays, public holidays, evenings or after midnight in particular industries. These changes apply to the following awards:

·         General Retail Industry Award 2010 

·         Fast Food Industry Award 2010 

·         Restaurant Industry Award 2010 

·         Pharmacy Industry Award 2010 

·         Hospitality Industry (General) Award 2010

The changes to the public holiday and evening and after midnight penalty rates will be implemented in full from 1 July 2017.

Public Holiday Penalty Rates

Public holiday penalty rates are being reduced from 250% to 225% across the hospitality, restaurant, retail, fast food and pharmacy industries for full time and part time employees and from 275% to 250% for casuals.

After Midnight Penalty Rates

If you have employees covered by the Fast Food Industry Award 2010 (Fast Food Award) or the Restaurant Industry Award 2010 (Restaurant Award), this amendment will vary the span of hours that attract the 15% loading in both Awards to cover work performed between midnight and 6.00am (previously 7.00am).

The Fast Food Industry Award 2010 is also being varied so the 10% evening work loading applies to work between 10.00pm and midnight (the span of hours was previously 9.00pm to 12:00am).

Sunday Penalty Rates

The changes to Sunday penalty rates also start from 1 July 2017, however these changes will be introduced over 3 or 4 years, depending on the award and employment type.

For further information regarding the specific phasing in rates which are applicable to each of the above awards, please contact HR Advice Online.

 High Income Threshold

Effective 1 July 2017, the high income threshold will increase to $142,000 per annum.

The high income threshold is the amount by which a category of non-award employee is excluded from the unfair dismissal provisions of the Fair Work Act, and in relation to the guarantee of annual earnings relating to modern awards.

The increase in the high income threshold will affect a number of different provisions under the Fair Work Act, including:

  • an award/agreement-free employee’s eligibility to claim unfair dismissal
  • the maximum amount of compensation of six months' earnings that the Fair Work Commission can order an employer to pay to an employee deemed to have been unfairly dismissed, and
  • the level that an employer can guarantee an employee’s earnings which will render the provisions of the applicable modern award no longer applicable to the employee.

 Unfair Dismissals

An employee who is not covered by a modern award or enterprise agreement and whose annual rate of earnings exceeds the “high income threshold” will be ineligible to claim unfair dismissal.

The high income threshold is based on an employee’s annual rate of ‘earnings’. The Fair Work Act 2009 defines the meaning of earnings for the purposes of the Act as being:

  • an employee’s wages
  • amounts applied or dealt with in any way on the employee’s behalf or as the employee directs (salary sacrifice arrangement), and
  • the agreed money value of non-monetary benefits.

 An employee’s earnings do NOT include:

  • payments the amount of which cannot be determined in advance, e.g. commissions, incentive-based payments and bonuses, and overtime (unless the overtime is guaranteed).
  • Reimbursements – for example, meal allowance, motor vehicle allowance, travel allowance, etc.
  • employer contributions to a superannuation fund.

The maximum amount of compensation that the Fair Work Commission can order in an unfair dismissal matter is now $71,000 from 1 July 2017.

Penalties for Breaching the Fair Work Act 2009

The maximum civil penalties against corporate entities and individuals for breaching the Fair Work Act 2009 will be increasing to $63k and $12,600 respectively.

These penalties will apply to single breaches of the national employment standards, modern awards or enterprise agreements, as well as general protections and unfair dismissal provisions.

Information in HR Advice Online guides and blog posts is meant purely for educational discussion of human resources issues. It contains only general information about human resources matters and due to factors such as government legislation changes, may not be up-to-date at the time of reading. It is not legal advice and should not be treated as such.

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