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Part 3 of our Modern Award Series – How do we classify our employees?

February 07, 2018

As discussed in Part 1 of our Modern Award Series, the first step to determining if a modern award applies to your business is to check clause 4 (Coverage) of the modern award in question. This clause will set out the industry to which the award applies. 

You must then look to clause 3 (Definitions and Interpretation) which sets out what specific words and phrases in the modern award mean. Sometimes there is a definition given for the industry which can be very helpful. For example, in the Restaurant Industry Award 2010 (‘Restaurant Award’) it states:

restaurant industry means restaurants, reception centres, night clubs, cafes and roadhouses, and includes any tea room, café, and catering by a restaurant business but does not include a restaurant operated in or in connection with premises owned or operated by employers covered by any of the following awards:

(a) Hospitality Industry (General) Award 2010;

(b) Registered and Licensed Clubs Award 2010; or

(c) Fast Food Industry Award 2010

The next step is to check whether the employee’s duties fits within one of the classifications in the modern award.

Classification structures are often divided into streams that group like positions together. Within these groups will often be levels with different responsibilities, duties, required skills and qualifications.

See the below examples:

General Retail Industry Award 2010 (‘Retail Award’)

In Schedule B of the Retail Award, classifications are divided into two streams: clerical officers and retail employees. 

To determine if an employee is a retail employee, the Retail Award outlines indicative tasks and indicative job titles.  An indicative job title for a Retail Employee Level 4 is a “2IC Shop Manager of a shop without departments”.  This Award covers positions from delivery drivers to sales assistants to forklift drivers.

Fast Food Industry Award 2010 (‘Fast Food Award’)

The Fast Food Award also details its classifications in Schedule B to the Award.  It largely defines each classification by its level of responsibility, its duties and required skills.

Note that there is a different minimum wage for Fast Food Level 3 employees depending on how many employees they are in charge of.

Restaurant Industry Award 2010 (‘Restaurant Award’)

Classifications in Schedule B of the Restaurant Award are divided into 4 streams:

  1. Food and beverage employees,
  2. Kitchen employees,
  3. Administrative and general, and
  4. Store employees.

Classifications are determined by their level of training and the duties required of each position.

Hair and Beauty Industry Award 2010 (‘Hair and Beauty Award’)

The Hair and Beauty Award determines classifications by position title (e.g. beautician, hairdresser) and accredited qualification or equivalent practical experience (e.g. Certificate III in Beauty Services or equivalent).

How can I be certain that I have the correct classification for an employee?

It is important to note that the tasks, job titles and duties listed under each classification in an Award are indicative only.

An employee does not need to perform all or even one of the tasks, job titles or duties to fit within a given classification.  However, the indicative aspects listed in each Award provide useful guidelines to match each position within your business to a classification within the Award.

If you do not select the correct classification for a given position, then it is likely you will be paying the incorrect minimum wage to the employees in those positions and be subject to an underpayment claim.

To ensure that you choose the correct classifications for your employees, please contact us at NRA on 1800 RETAIL (738 245) for information and advice specific to your business.

How prescriptive are the classifications in Awards?

From the above, you can see that each modern award is structured differently.  Awards are generally not prescriptive in nature and are designed to capture as many positions as are likely in a given industry.

Because most awards cover businesses based on the industry the business operates in, rather the roles performed by employees, you will often find that awards cater to a variety of positions.  Sometimes these positions seem to fall well outside of the realm of the industry. 

For example, a business in high-end fashion, can align a forklift driver, a driver or a receptionist, with appropriate classifications within the Retail Award.

Similarly, a restaurant can employ a picker and packer for its storeroom, a security officer and a clerical supervisor and each of these positions will be catered for in the Restaurant Award’s classification structure. 

What classification fits a position, where there are two modern awards that could apply to the business?

Classifications can also assist in deciding which modern award best covers the employee’s position.

For example, if you are operating a business in a country town which has 50 per cent of its core business as a newsagency and 50 per cent of its core business as a take-away food store then which award do you apply, the Fast Food Award or the Retail Award?

Where there is more than one award that covers your business, you must be satisfied that the employee is covered by the award classification which best fits considering:

  • the work carried out by the employee; and
  • the environment in which the employee usually carries out the work.

In the Modern Award Series – Part 4, having worked out what award applies and what classification applies to the position of the employee, we will consider the pros and cons of casual, part-time and full-time employment.

The above article is prepared for the purposes of providing general information only and before determining which modern award covers your business, you should seek advice from NRA that is specific and tailored to your individual circumstances. 

Please do not hesitate to contact NRA on 1800 RETAIL (738 245) anytime during usual office hours for assistance.

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