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New awards system leaves ignorant employers exposed

Many employers remain unaware of their new awards obligations to employees under the Fair Work Act, and in doing so risk liability for back pay and penalties.

new awards job adsThis is largely the result of employers assuming that paying above award rates means that they are exempt from other award obligations, such as leave loading, overtime and penalty rates.

However, under the new modern awards system this is not the case, with employers inviting significant financial penalties if they continue to ignore these requirements.

With July 1 fast approaching, business consultants and lawyers are advising employers that now is the ideal opportunity to review employee contracts to ensure compliance with modern awards.

Shana Schreier-Joffe, Partner at Harmers Workplace Lawyers, believes that employers need to debunk the ‘myths’ surrounding awards in order to make sure they are not financially liable.

“It is important to make sure above award payments are actually equal to or more than the employee would have been entitled to under the relevant award, including taking into account penalties, loadings and allowances.”

Another concern for the approaching new financial year is transitional agreements scheduled to begin on the 1st of July, with employers urged to check what arrangements apply to relevant employees.

“Without this audit, employers could render themselves liable under the Fair Work Act for non-compliance with modern awards, and be faced with significant back-pay and penalties.”