Award Interpretation

March 2, 2022
employee performance
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Susanna Ritchie

As an employer, it is crucial to be aware of your obligations under the Fair Work Act 2009, to ensure that you are meeting your relevant modern award obligations, and to keep your workplace running efficiently. Employees should also familiarise themselves with their entitlements, to ensure they are being treated fairly. One area that can be confusing is workplace award interpretation, as it can raise questions such as; what does the award mean for your business, are you paying staff the correct amount, and how do you make sure you’re meeting all the requirements? To help with this, our blog will provide some guidance on workplace award interpretation, and explain what the key points that businesses must know.

What is Award Interpretation?

When a company hires a new employee there is often a discussion about salary and benefit expectations, and what the staff member should be paid. However, what happens if a business attempts to underpay their employees, or not provide them with their full entitlements? In this situation, existing employment law means that employees would have recourse to take legal action against their employer, to ensure they are provided with the full scope of salary and benefits they are entitled to.

Workplace award interpretation helps businesses avoid situations such as this, as it is the act of calculating the minimum pay and entitlements that staff are entitled to. An award agreement clearly states the minimum entitlements, salary, and allowances a company is required to pay staff working across a range of industries. A modern award acts as something of a ‘safety net’ for staff, who are assured that their employer will provide them with a workplace salary that meets basic living standards.

This is because under current Australian workplace legislation, particularly the Fair Work Act 2009, there are set guidelines pertaining to the salary and allowances staff in particular industries are entitled to. It is important to recognise that there is more than one award, as different industries are subject to varying modern award conditions, with hairdressers and beauticians operating under the Hair and Beauty Industry Award 2010, retail workers protected by the General Retail Industry Award 2020, and lawyers being covered by the Legal Services Award 2020.

Why Modern Awards are so Important

Correct award interpretation not only provides employers with explicit guidelines about adequately providing for their staff, it also covers important issues such as what they must pay their employees, what amenities they need to provide them with, break times, and so on. All employees are entitled to read over their applicable Award Agreement to determine if the business is meeting its responsibilities to staff, and if not, the employee will have grounds to take action against their employer.

A Modern Award meets National Employment Standards

One of the key benefits of modern industry award agreements is that by clearly and thoroughly describing minimum employee entitlements and working conditions, including the minimum wage, maximum amount of hours that can be worked in a day, overtime pay, allowances, and so on, there is no room for ambiguity on the part of either the employer or employee.

Through correct award interpretation, which results in providing staff with the full extent of their entitlements, businesses are protecting both themselves and their employees, and developing beneficial conditions under which their organisation can thrive.

Further, by complying with workplace award agreements, businesses will maximise their chances of avoiding Fair Work Australia audits and investigations, which can lead to significant fines if payroll issues are discovered.

Interpreting Awards Correctly

In order to ensure fair pay for all workers, it is important that businesses interpret their award agreements correctly. It is a common misconception that many classes of staff will not be covered by an award agreement; however, this is untrue, as staff across most industries within Australia, and across different work types – from full to part- time, to casual, are covered by an award for the hours they work.

Some Important Things that Awards Cover

Depending on the industry you are working in, and your work type, your modern award will cover important workplace matters, such as:

Public holiday entitlements.
Annual leave entitlements.
Minimum salary for hours worked.
Paid/unpaid break entitlements.
Sick/pandemic leave.
Benefits and allowances.
And many other important issues.

Workplace Wizards is Here to Help

Correct award interpretation can seem like a challenging task, as even a single mistake can significantly impact a business. If you would like some help understanding your obligations and ensuring that you are adequately meeting them, then please contact call Workplace Wizards today on 03 9087 6949 or email at support@workplacewizards.com.au. We can talk you through the complexities of the relevant industry modern award, how it applies to your business, and what your company should be doing to maintain its obligations, while answering any questions you may have.