The ink has barely dried on the last round of variations to modern awards resulting from the 2 yearly review commenced by the FWC in 2012, but the 4 yearly modern award review is just around the corner.  The review is proposed to be conducted in 4 stages with around 30 awards in each stage.  It is estimated that each stage will take around 4 to 6 months (with some stages overlapping) and the process is expected to conclude in mid-2015.

Nearly 300 applications were made during the first 2 year review process which commenced in 2012; however the 4 yearly review has a wider scope so a greater number of applications can be expected.  Significantly, this review can include claims for increased wages (subject to evidence of a change in work value).

With that in mind, we suggest that employers:

• Get ready for unions to dust off issues that were previously unsuccessfully agitated in the original award modernisation process or in the 2 yearly review
• Consider whether there have been any material changes in circumstances since award modernisation occurred that could justify some of the union claims (eg changes in work value) and what submissions/evidence can be led to respond to such claims
• Identify any issues they have come across in the operation of applicable modern awards since they commenced operation, including clauses that inhibit flexibility or productivity or clauses which are unclear
• Identify industry-wide matters that may be agitated on an industry basis
• Expect penalty rates to be a key point of debate. When making or changing a modern award, FWC must take into account the need to provide additional pay for employees working:
  • overtime;
  • unsocial, irregular or unpredictable hours; and/or
  • on weekends or public holidays

Enterprise instrument termination or modernisation

Enterprise instruments automatically terminated on 31 December last year unless an application was made to modernise the instrument.  Unions and employers (and sometimes both) have made applications to modernise particular awards.

Employers involved in this process will likely have their cases heard in 2014.  Employers should also consider whether any other employers in their industry (including competitors) have made an application to modernise their award.  Different industrial regulation may lead to a competitive advantage which will be contrary to the “level playing field” principle articulated by the Tribunal in the KFC and Pizza Hut enterprise instrument modernisation decisions.  Employers with enterprise awards should consider how this process will affect them.