LEGAL UPDATE

VARIATION OF PROFESSIONAL EMPLOYEES AWARD 2020
COMES INTO EFFECT ON 16 SEPTEMBER 2023

Authors: Paul Lorraine and Callum Sirker

Changes to the Professional Employees Award 2020 come into effect on 16 September 2023.

This Award covers a wide range of employees who work in information technology, medical research, quality auditing, engineering and telecommunications.

Arising from a Full Bench decision on 22 April 2020 as part of the four-yearly review of modern awards, in January 2023, the Fair Work Commission decided of its own motion to address hours and overtime, and Award coverage. Variations were proposed in the Commission’s 16 March 2023 decision.

Hours and overtime – summary of changes

• Fixed penalty rates for overtime hours worked:
  • before 6am and after 10pm, Monday to Saturday: 125%;
  • on Sundays and public holidays: 150%.
• Time off in lieu of overtime (TOIL) by agreement.
• Additional casual loading of 25%.
• Additional record-keeping obligations for all overtime hours worked above 38 per week.
• Paying 25% above the minimum Award rate provides an exemption from these provisions.

Coverage

The Full Bench decision in Zheng v Poten & Partners identified an issue with the “principal purpose” test for determining Award coverage and the classifications in Schedule A of the Award. The Commission found the test was “singularly ill-suited” to determine the application of those classifications, causing uncertainty and excessive litigation about the coverage of the Award.

Schedule A will therefore be modified to clarify coverage:

“An employee performing professional engineering duties, professional scientific duties, professional information technology duties or quality auditing must be classified in one of the following classifications, provided that the employee is not employed in a wholly or principally managerial position.”

Notes for employers

• Employers need to check that their rates and record-keeping comply with these new Award provisions.
• The new overtime and penalty rates are more prescriptive, but the rates are not excessive.
• They also apply to employees on call backs and working remotely.
• The Award now allows TOIL by agreement.
• The new record-keeping requirements are quite onerous.
• Paying 25% over the minimum rate provides an exemption.
• For employees who are not paid 25% above the minimum, there is no impact if the hours worked are 38 per week, Monday to Saturday, between 6am and 10pm.
• Coverage has not changed, but it is now very clear that managers are not covered.

If you require legal advice or assistance, please contact our Harmers team by phone: +61 2 9267 4322.

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