Working out which Award applies to an employee can seem straightforward. Find the industry, find the Award and check the pay rate.
Unfortunately, it doesn’t always work that neatly.
An employee’s job title alone won’t tell you which Award applies, and neither will the industry they work in. Before you get to classifications and pay rates, there are a few things to work through.
First, which employment system are you in?
In Western Australia, the first question is whether the employer falls within the national or WA state employment system.
This generally depends on the legal structure of the business. Most incorporated businesses, including Pty Ltd companies, fall within the national system, while sole traders and unincorporated partnerships may fall within the state system. There are exceptions, so this should be confirmed for the individual business.
Why does it matter? Because it determines where you look for Award coverage.
National system → Check whether a Modern Award applies.
WA state system → Check whether a WA Award applies.
Getting this first step wrong can send the rest of the assessment in the wrong direction.
Look at the industry, but don’t stop there
Once you know which system applies, look at the industry the business operates in and whether there is an industry Award that may cover the employee.
The Award name can give you somewhere to start, but don’t rely on the name alone. Read the coverage provisions and check the definitions, inclusions and exclusions.
Sometimes an Award that sounds like the obvious choice won’t cover the particular business or role you’re looking at.
What work does the employee actually do?
This is where job titles can cause problems.
Two businesses might use the same job title for employees doing quite different work. Likewise, an employee with a broad title might regularly perform duties that point towards a particular Award.
Look at what the employee actually does day to day. What are their main duties? What skills do they use? What level of responsibility do they have? What qualifications do they have? Do they perform a mix of different duties?
The work being performed matters more than their job title.
Then find the right classification
Finding the Award is only half the job. The employee also needs to be classified correctly within it.
Awards generally contain different classification levels based on factors such as duties, skills, qualifications, experience, responsibility and supervision.
That classification will usually determine the employee’s minimum rate of pay and may affect other entitlements.
This is another area where the employee’s title shouldn’t do the decision-making for you. Compare the work they actually perform against the classification descriptions in the Award.
One workplace doesn’t necessarily mean one Award
Depending on the business and the roles being performed, different employees working for the same employer can have different Award coverage. Employees covered by the same Award can also sit at different classification levels.
Award coverage needs to be considered against the employee and the work they actually perform, rather than applied across the business by default.
What if there isn’t an Award?
Not every employee is covered by an Award.
An employee may be award-free depending on the workplace relations system that applies, the nature of their role and their individual circumstances. However, being award-free does not mean the employee is without minimum employment conditions or protections. Other legislative standards and employment obligations may still apply.
If you reach the conclusion that an employee is Award-free, make sure that conclusion is based on the relevant coverage provisions rather than simply being unable to find an Award that seems to fit.
Don’t guess Award coverage
Using the wrong Award can affect much more than an employee’s base hourly rate. Overtime, penalty rates, allowances, minimum engagements and other employment conditions can differ considerably between Awards.
When you’re working through Award coverage, bring it back to a few basic questions:
Which employment system applies? → What industry does the business operate in? → What work does the employee actually perform? → Which Award covers that work? → Which classification applies?
It’s worth getting those questions right at the beginning. Discovering the wrong Award or classification has been used after months or years of payroll is a much bigger job, which can expose the business to a risk of underpayment.
Not sure whether you’re using the right Award?
Award coverage and classifications aren’t always straightforward. ProcessWorx can help determine which employment system and Award applies, review employee classifications and check that the appropriate minimum employment conditions are being applied. Call our HR team on 08 9316 9896 or get in touch.
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