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News Bulletin : ADA News Bulletin February 2011
25 FEBRUARY 2011 Fair Work Australia (FWA) has announced the modern award transitional arrangements from Division 2B State awards for unincorporated business into modern awards. From the 31 January 2011, the Division 2B State awards (formerly State awards) will cease to operate and unincorporated employers and employees who were previously covered by these awards will be covered by a relevant modern award. WHO DOES THIS AFFECT? These changes affect only unincorporated employers in New South Wales, Queensland, South Australia and Tasmania (excluding Western Australia) who: • Are not trading as an incorporated business; • Were previously covered by their State workplace relations system; and • Are now covered by the national system as a result of the referral of state industrial powers to the Commonwealth Government which occurred on 1 January 2010. Employers who are unincorporated businesses include sole traders, partnerships, other unincorporated entities and non-trading corporations. The decision does not affect incorporated employers in Victoria, Western Australia, Northern Territory, Australian Capital Territory, New South Wales, Queensland, South Australia Tasmania and unincorporated businesses in Western Australia. WHAT IMPLICATIONS DOES THIS HAVE FOR EMPLOYERS? If you are an unincorporated business (except Western Australia), the terms and conditions of your current Division 2B state award (formerly State awards) will continue to apply up until 31 January 2011. Then, from the 1 February 2011, the modern Health Professionals and Support Services Award 2010 will start to apply to your employees. At which time, modern awards provide a transitional option for employers to phase in the modern minimum wages, penalties and loadings, similar to the current transitional option offered to incorporated businesses, from the first full pay period on or after 1 February 2011. TRANSITIONING FROM PRE-MODERN AWARDS TO MODERN AWARDS? To lessen the immediate impact of these new changes the modern award contains transitional provisions which allow the monetary changes in the pre-modern and modern awards to be progressively phased in over five annual instalments at 20% per year. The first phase-in date will be the first full pay period to commence on or after 1 February 2011. An employer that came into existence after 27 March 2006, regardless if they were now covered by a Division 2B State Award or award free can either take: 1. a conservative approach, and transition from the applicable NAPSA/pre-reform award to the modern award; or 2. a more aggressive approach, and transition from the old Workchoices Australian Fair Pay and Conditions Standards (AFPCS) to the modern award. We recommend the more conservative approach to be more appropriate, as this will expose businesses to the lowest level of risk (although it may lead to them paying more than they were obliged to pay under the relevant modern award). Yet this is up to each individual employer as to how they want to treat their business. For unincorporated employers who had come into existence before 27 March 2006 then the transition will be from the NASPA or the pre-modern award to the new modern award for comparison purposes. If you opt to transition minimum wages, you would need to use both the pay rates that apply to NAPSA equivalent state awards and the modern Health Professionals and Support Services Award 2010 to determine the minimum transitional rates to apply. To assist members within understanding the transitional provisions with regards to minimum wages, the ADA HR Advisory Service will shortly develop a transitional wage calculator. Before acting on any of the information in either of these articles, please contact the friendly team at the ADA HR Advisory Service on: Phone: 1300 ADA INC (1300 232 462) Fax: (02) 8448 3299 Email: firstname.lastname@example.org The ADA HR Advisory Service is available from 8:30 am -- 5:00 pm AEST Monday to Friday. 'The answer could be just a phone call away' CHANGES COMING affecting unincorporated businesses using Division 2B State Awards (formerly State Awards)
ADA News Bulletin December 2010
ADA News Bulletin March 2011