New loaded rates for hospitality workers and flow through changes to casual terms in modern awards

Loaded rates for hospitality workers

Hospitality industry employers can now pay loaded rates to staff at certain levels, incorporating overtime, penalty rates and other monetary benefits into a single rate that is paid for all hours of work. Loaded rates are intended to reduce the administrative burden on employers and reduce the risk of underpayments and mistakes arising from pay complexities under the existing award regime.

The Full Bench was asked to look at loaded rates for four awards covering industries distressed by the current coronavirus pandemic. It was satisfied that workers won’t be worse off if they move to a loaded rate arrangement.

Employers must consult staff before introducing loaded rates arrangements, which were introduced into the Hospitality Industry Award on 3 September 2021. This is a positive step, offering employers greater flexibility and convenience in payment arrangements.

Changes to rules for casuals flow through to awards

The Fair Work Commission is in the process of amending terms about casuals in modern awards, to comply with the amendments made to the Fair Work Act earlier this year as part of the Government’s IR Omnibus Bill.

The Fair Work Act amendments inserted a definition of a casual employee as “as one who accepts a job offer from an employer knowing there is no firm advance commitment to continuing work with an agreed pattern”. Rules about converting to permanent employment were also added.

Read more about these changes here

From 27 September, the changes will be made to the following stage one awards:

• Manufacturing and Associated Industries and Occupations Award 2020;
• Pastoral Award 2020;
• General Retail Industry Award 2020;
• Hospitality Industry (General) Award 2020; and
• Educational Services (Teachers) Award 2020.

Equivalent changes are expected to be made to the 150 remaining modern awards as part of stage two.

Employment status directly affects entitlements owing under an award, so employers should take action now to ensure employees are correctly classified to avoid breaching any applicable award terms. Employers should also consider whether they need to amend existing contracts, or offer permanent employment to some staff under the conversion rules.

Contact Thynne + Macartney if you would like assistance in classifying staff, compliance with award obligations or amending contracts and policies to reflect the new regime.