Mar 28th, 2023
On 23 January 2023, the Fair Work Commission (FWC) published some significant amendments to the existing Professional Employees Award 2020 (Award), which were principally aimed to address two prominent issues, those being Award coverage and employee hours of work and overtime.
In terms of coverage, the Award originally utilised the “principal purpose” test as a tool which aimed to go beyond a “quantitative assessment”, in which the employee’s nature of work is assessed to determine what principal purpose the employee was hired for.
However, the FWC had made the decision to remove this tool as it has been deemed to be difficult to apply.
As such, this change has led to an update in the coverage provisions contained within the Award. These now effectively stipulate that the employees performing professional engineering duties, professional scientific duties, professional information technology duties, and quality auditing will now be covered. However, this is only the case provided that the employee is not engaged primarily in a managerial position.
Overall, this helps provide further clarity to the previous ambiguity of the “the principal purpose” test.
This change will apply from the first full pay period beginning on or after 23 March.
Provisions around employee hours of work and overtime have also seen considerable changes. More specifically, the FWC made amendments to both the treatment of overtime, and penalty rate provisions.
Previously, there were no clear overtime or penalty rate entitlements for employees covered by the Award that worked in excess of 38 hours. There were provisions that it should be compensated in some fashion, but no clear enforceable provisions.
As such, employees are now entitled to overtime (or receive time off in lieu) for working in excess of 38 hours per week, which is inclusive of call-backs, remote work as work performed on electronic devices.
Additionally, employees now also receive two additional penalty rates, one of which being a penalty rate of 125% for all hours worked before 6:00am or after 10:00pm on any day Monday to Saturday, as well as 150% for rostered hours worked on a Sunday or public holiday. Please note that for casual employees, these rates are to be in addition to their casual loading.
As a further note, there is now also a maximum limit for averaging hours of work per week – now 13 weeks.
In light of these changes, the FWC has therefore introduced new record keeping obligations, to ensure the hours worked in relation to these new provisions are being accurately tracked. Employers will now need to track when employees work in excess of 38 hours, hours worked before 6:00 am or after 10:00 pm Monday to Friday, and all time worked on Sundays or Public Holidays.
These changes will take effect from the first full pay period beginning on or after September 16, 2023.
Ultimately, these changes can be quite significant for businesses who employ individuals covered by this award. The changes to award coverage make it easier to determine whether or not an employee might be covered by the Professionals Employees Award 2020 moving forward. There are now more specific and enforceable penalty rate provisions in effect for their employees, and the record keeping obligations put an onus on employers to make sure they are complying with the Award.
We recommend that employers review the Remuneration arrangements for any employees covered by this award – while employers may have had previous means of compensating their employees for overtime, they should confirm whether these are still sufficient, or whether changes are required.
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