Australia: Upcoming changes to the Professional Employees Award 2020
The Fair Work Commission (FWC) has released proposed changes to the Professional Employees Award (PE Award).
The proposed changes will radically alter the operation and coverage of the PE Award including to:
- increase the number of employees covered by the PE Award;
- introduce specific obligations to monitor hours of work; and
- introduce more proscriptive entitlements to overtime payments.
Importantly, the proposal includes an ability for an employer to contractually agree to pay an employee a salary which is 25% or more above the minimum annual wage for the employee’s relevant classification, in which case the overtime entitlements will not apply.
The FWC is accepting submissions until 10 February 2023 in relation to these proposed changes. The FWC will then issue a final determination and variation of the PE Award. We expect that the proposed changes will be implemented with little further variation.
Employers with employees currently covered by the PE Award, or other employees performing engineering, scientific or information technology duties, should closely review these changes.
At present, the PE Award has a narrow scope of application. The FWC proposes to introduce a change to the classifications in Schedule A to the PE Award to make clear that unless an employee’s role is wholly or principally managerial, they will be covered by the PE Award provided they otherwise perform professional engineering duties, professional scientific duties, professional information technology duties, or quality auditing.
Hours of Work
The FWC proposes to make clearer what will constitute ordinary hours of work under the PE Award and include new obligations to track those hours of work. The proposed changes include:
- ordinary hours of work are set at 38 hours per week;
- an employer may request or require a full-time employee work overtime, in excess of 38 hours per week, provided those hours are reasonable; and
- the employer must keep records hours worked by an employee which are:
- in excess of the 38 ordinary hours per week; and/or
- worked before 6:00AM or after 10:00PM Monday to Saturday; and/or
- worked on a Sunday or a public holiday.
At present, the PE Award allows significant flexibility to employers as to how they will compensate for time worked outside of ordinary hours of work. The FWC proposes to add the following specific entitlements for permanent employees:
- a penalty rate of 125% of the minimum hourly rate will apply to all hours worked (whether ordinary or overtime hours) before 6:00AM or after 10:00PM on any day between Monday and Saturday;
- a penalty rate of 150% of the minimum hourly rate will apply to rostered hours worked (whether ordinary or overtime hours) on a Sunday or a public holiday; and
- these entitlements apply to all hours worked, including work on, or in, connection with call-backs and work performed on electronic devices, or otherwise in a remote manner; and
- employers and employees will be able to agree to time off work in lieu of payment of overtime.
As noted above, if the employee agrees in a contract of employment to pay an amount which is 25% or more above the minimum annual wage for the employee’s relevant classification, these entitlements will not apply.
We will publish a further alert once the FWC confirms the variations to the PE Award. If you need any help understanding these changes and their impact on your business, please reach out to one of our team.