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Hello and welcome to the WA SACS Education
and Information Workshop 2013.
This is a project that's been run by NDS, ACOSS and Jobs Australia,
and it's funded by the Australian Federal Government.
What we're going to be discussing today is a number of things
around the Modern Award.
So we'll have a discussion about the transition to the Modern Award,
the Federal and State IR systems,
transitional timetables,
penalties and loadings,
a bit of a discussion about other conditions,
the Modern Award Review of November 2012, and the future.
Also a bit of a brief discussion about implementation issues
an the Equal Remuneration Order implementation.
After that we'll have a quick discussion
about industrial obligations and funding.
So the Fair Work Act applies in WA
to organisations that are constitutional corporations
and organisations that are non-constitutional corporations
in states that have referred their IR powers to the Commonwealth,
which as most of you will be aware, is not in WA.
There are a few small differences between the State and Federal awards
in terms of SCHADS and the ERO.
The state system has SACS WA, and not the ERO you'll see there.
Pay rates are slightly higher under the federal system,
and the ERO will apply.
They saw a 2.9% increase in July 2012,
whereas under the state system, there was 3.4% increase in July 2012.
So that's the federal minimum wage increase in the federal system,
and the state wage increase in the state system.
For casuals, they'll see a two or three hour minimum
in terms of calls, and 25% loading.
Whereas in the state system, there's a two hour minimum and a 20% loading.
In terms of redundancy in the federal system,
there's no severance for small employers at this time,
but I'll discuss that more further.
And in the state system there is severance for small employers.
In terms of shifts,
there's no changes to definitions under the state or federal system.
Sorry, there's no change under the state system,
and minimal changes under the federal system.
There's some changes to...
..there's no remote allowances under the state system...
..under the federal system.
And in terms of annual leave,
the NES has four weeks per annum, or five weeks for shift workers,
whereas the state system, there is additional leave for remote workers.
So that's related to those remote allowances.
In terms of compassionate leave, just a couple of differences there.
Under the federal system the definition is a bit broader -
it has illness or injury, as well as death,
whereas under the state system it is death only.
The state system has three days paid on the occasion of death,
whereas the federal system has two days per incident.
In terms of the timetable
for transitioning from former awards to SCHADS,
so for people in the federal system,
the classifications moved at July 2012,
so hopefully everyone's already done that.
Pay rates phased in from July 2012 to December 2020.
So that's all the way through to 2020 and that's in relation to the ERO.
Penalty rates and loadings phased in from July 2012,
through to July 2014.
So all the penalty rates and loadings
will be completely phased by July next year.
Allowances moved January 2010, and there was no phasing there.
And other conditions moved at January 2010,
and there was no phasing in those conditions.
An example to the way shift loadings have been phased
is in the case of WA where parts of that shift don't receive the loading.
So there's some phasing in there of certain elements.
You can see there that there's a 5% shift penalty there,
whereas previously there would not have been...
Whereas previously it would've been a 12.5% loading.
That's to do with phasing it out - so phasing it down to nothing.
Whereas if the shift fits into what is now the shift definition -
so if it finishes after 8pm,
then it does get the full loading, which means there's no difference
and it's exactly the same.
In a case where a shift doesn't finish after 8pm,
but finishes between 7pm and 8pm,
where previously it would've been a shift under the state award,
it now receives a 5% loading as a phasing out
of what's happened previously.
So there's further discussion about this as we move along.
As you can see here, again it's another discussion there.
So where it ends after 8pm, or finishes between 8pm and midnight,
there's no difference.
Between 7pm and 8pm there's phasing out of that allowance.
The night shift is the same.
Public holidays are the same, Saturdays are the same.
Sundays are phasing up from 75% to 100%.
In terms of the casual loading, again some phasing there
from the previous allowance of 20% up to 25% between now and 2014.
So at the moment, it's 23%, as it phased up.
At July next year... this year, it will be 24%,
and at July next year, it will phase all the way up to 25%.
The same goes for Saturdays in the morning,
whereas previously for casuals there would've been a loading in mornings,
now that loading will be phasing out.
At the moment it's at 20%, it'll phase down to 10% this year,
and out completely by next year, as will the Sunday loading.
As you can see, loadings on a Saturday and Sunday for casuals
are being phased out completely.
There is some element there of take home pay guarantee,
and also these sorts of things are still the subject of
the Modern Award Review.
With the take home pay guarantee,
that refers to people's dollar value take home pay.
So there's no need to make up shift penalties
to make up what people... the shortfall people have come up with.
It's only in terms of dollar value of take home pay
at the end of the week.
It also doesn't take into account if you change people's shifts.
Where this might impact on someone is if you have a long-term casual
who works every Sunday.
OK, so what's happened in the Modern Award review as of November 2012.
There was some discussion of the sleepover due to some confusion.
There were a number of applications
made to clarify what is supposed to happen with the sleepover.
Some felt that you could only work one side of the sleepover.
It was clarified that you can work both sides of the sleepover,
but you must have a four hour engagement on either side.
You might have a four hour engagement on one side
and one hour on the other, that's fine.
Or four hours on one side, and four hours on the other is fine.
Or six hours on one side, and two hours on the other.
So long as there's at least a four hour minimum engagement
on one side or the other.
What was also discussed, is that employers and employees
may agree to reduce the break between shifts from ten to eight hours
where they're associated with a sleepover.
This is only in relation to the break between shifts
where one of those shifts is a sleepover.
What this means practically for you,
is that you can have a discussion with your staff members
about reducing those shift breaks to eight hours.
Probably best to put something in writing,
even if it's a memo.
Other changes were more around clarification.
So there was some discussion about what a Home Care worker was.
It was clarified that simply being, doing work in the home
does not make it Home Care work.
There's social and community services work that happens in the home.
So some clarification there that work that occurs in the home
must be home care work for it to be under that schedule.
Simply being in the home does not make it Home Care.
There are going to be...
This is only part of what's being discussed at the moment.
So the last of these things have been decided,
is the loadings are payable for broken shifts
determined by the end time of the shift,
as you'll see in the shift descriptions.
And also 24 Hour Care provisions only apply to Home Care workers,
not to other workers.
So what's still up in the air
and will hopefully be reviewed as of April 2013,
at some point.
Part-time employment - so that's discussion around
conversion to part-time employment from casual.
Small employer redundancy.
A lot of that comes out of WA
where there has previously been small employer redundancy
and there is no longer under the Modern Award.
Further discussion around broken shifts and how they function.
Casual penalty rates - so Saturday and Sunday penalty rates.
Discussion around annual leave,
and also discussion around public holidays.
So those issues should be determined at some point into the future
by a Commissioner.
OK, so some of the implementation issues we've had
are roster arrangements and how much sense they make under SCHADS.
In WA this hasn't come up as huge issues.
The main concern is that afternoon shift that changes a little bit.
For some people that won't have an impact,
because your shift arrangements don't fall into that grey area
which was previously an issue but now is no longer.
Long term casuals and part-time employment.
There's scope across the industry and across the country
for better use of part-time employment.
The issue is really that long-term casuals become part-time employees.
Whether or not you call them part-time or casual,
if they are regular and systematic,
and that does not necessarily mean exactly the same shifts every week,
it could mean similar hours every week,
they do become part-time employees.
Whether you call them casual and pay them as a casual employee or not.
So certainly, there's a need for people to move those casuals
across onto part-time to avoid those liabilities,
such as back-pay for annual leave, and what not.
There's been discussion around job design and classifications.
Certainly one of the pitfalls around classifications
is where we want people to share higher duties and learn new things.
But what we're effectively doing is meaning those employees
are now a higher classification.
So we do have to have a look at the way we design our jobs,
and how that works in terms of our classifications,
and how best to make use of our workers.
Where people have Enterprise Agreements,
and how those interact with the Modern Award.
Agreements remain in force after their expiry date
until they are replaced or terminated.
So this is the case with state and federal agreements
where you've got them in place.
Provided there's no reduction to NES, the conditions continue to apply
where there are different to SCHADS or Modern Award.
So if you have an agreement,
as long as they're as good as the National Employment Standards,
they continue to be implemented in exactly the same way,
and you don't have to change to these new SCHADS arrangements.
Pay rates must match the Modern Award plus ERO rates
where you're a federal system employer.
And this means you might need to cross check
that whatever your increases that you've been providing
are still above whatever someone would be entitled to
under the Modern Award plus the EROs.
That includes the transitional rates.
That's a bit of a stumbling block there to be careful of.
If agreement has a different classification structure.
So you've made up a new classification structure
that fits with your organisation a little bit better,
you need to translate people to the Modern Award.
You still need to go through the process
of translating your staff to the Modern Award,
and monitor the rates for the life of the agreement.
You need to go through this process even if you have an agreement.
You just may not need to be paying those rates,
but you do need to double check that what you're paying
is still above the Modern Award rates.
The ERO implementation.
The Modern Award rates increase by between 23% and 45%.
That includes the 4% increase to Barriers to Bargaining.
If anyone talks to you about a 4% increase,
that's included in that 23-45%, there's no need to add it later,
or do anything different with it.
It's in that 23-45% increase.
The full amount will be payable by 2020.
So that means we'll be doing this translation and transitioning
all the way through to 2020.
It's phased in by nine equal instalments each December.
So that's still true.
Even though we'll be doing some specific translation,
and doing some ways around that,
it's still going to be nine equal instalments.
So in terms of your budgeting,
you can use what the increases have been in the past as an estimate,
in terms of what they'll be in the future.
Pay rates are affected by transitional arrangements
for moving from old awards to SCHADS.
We'll see that in just a moment.
With the old award rates,
they are maintained as transitional award rates.
So they're still transitional award rates,
they're not what we used to call "above award" rates.
We call them "transitional" award rates.
They're treated like award rates,
so you still have to maintain above award.
If they are lower than the Modern Award rates,
you need to move directly to the Modern Award.
The transitional rates increase at a slower rate to the Modern Award rates
but get to the same Equal Remuneration payment in 2020.
So they will be going to the same place,
they won't be above award forever.
This is how you calculate it.
Where A equals Equal Remuneration payment,
or where we will be in 2020 at this point in time.
That does change and move every year, because we do have the CPI increases,
and it is impacted upon by those CPI increases,
or the federal minimum wage increases.
Where B equals the award rate, which is where we are now.
For most that will be a preserved transitional award payment,
but it could also be the Modern Award.
Each December we add 1/9th of the difference between those two.
So at December 2012 we would've added 1/9th of the difference between.
At December, 2013, we'll add 2/9ths.
It's that simple, but it does have to be recalculated every year,
that's why you can't decide now what it's going to be,
because it's impacted upon by the federal minimal wage increase,
or the CPI increases.
So it does need to be recalculated and redone every year.
This is what it looks like in terms of a bar graph.
That's where A equals where we're going in 2020 -
the ERO payment.
B in this case equals current Modern Award rates,
where someone might be on the Modern Award.
We take away B from A.
And then we divide it by nine and add the ninth to the difference.
So there you can see it.
In the case of a preserved Modern Award rate,
so the transitional rate, again we do the same thing -
we take away B from A.
And we add the difference.
So as you can see, someone who's on a higher rate remains on a higher rate
than someone on the Modern Award.
They still get an increase and will every year,
but it's a smaller increase than this person on the Modern Award.
So they remain above that person and will remain above
all the way through to 2020, but they'll see smaller increases,
and they will always see smaller increases
to those on the Modern Award.
This is what it looks like in terms of what the full increases will be
for the Modern Award.
The thing to remember is this is what it is for the Modern Award
and not for transitional rates.
So this is the maximum it would ever be for any employee
on each of these levels,
but it won't reflect what it actually is for people on transitional rates.
The thing to also be aware of is this is reliant on
what the CPI increases are going to be.
So this isn't exactly 100%,
it may differ if you have unusual translations,
or it may differ if you have something else going on
in your workplace.
So this is what it looks like for two people moving from...
And use this as an example from NSW because the difference is bigger
so it's easier for the graph.
So someone going from a SACS NSW level 3.1,
and someone on a Modern Award level 3.1.
As you can see, down the bottom is the Modern Award, the darker green.
And that one still goes to the same place -
we all go to the same place in 2020,
it's just that the transitional rate, the one above - the lighter one -
moves at a slightly slower rate.
And it's a bit bumpy because of the CPI increases.
That's what it looks like as a graph.
Still going to the same place.
Someone on a transitional rate will always remain
above someone on a Modern Award rate through to 2020.
It gets closer and closer as time moves on.
So yes, this all does mean that you have to
continue to translate positions
all the way through till 2020.
So if you create a new position in July 2019,
you'll have to look at that under the Modern Award,
and under the State Award to get the correct transitional rate.
All this has to continue until 2020.
So the good news is you can get Pay Tables.
Jobs Australia Pay Tables are available online through NDS.
You'll have access to those until July, possibly beyond that.
They present the most likely translations,
together with the applicable pay rates.
So the Modern Award rate, or the Transitional Award rate,
whichever is the higher.
If you have an unusual calculation you might need to contact someone
to help you with that.
Either your employer organisation,
or whoever you work with for your pay tables.
So whilst it's good to know how you do translate these pay scales
and how they all work,
there are a number of tools out there to help you.
You can get a pay table from us at the moment,
as well as... there's also the Fair Work Ombudsman's calculator.
It's probably best not to rely simply on a calculator on its own,
because it's not always 100%.
It's probably good to cross-check with your own calculations
against the Fair Work Ombudsman's calculator.
This is an example of the Jobs Australia pay tables.
As you can see, they represent likely translations.
So if you have an unusual situation and it can happen,
although my first question to you is check your translations
if this isn't what you have.
It's possible to have other translations.
But two to two, three to three, that's the most likely at this level.
If you have someone who's gone from a previous SACS WA classification
level two, through to a SACS employee level three
you might have to have a chat with someone about how that works.
You can contact Jobs Australia, or your employer organisation,
and they should be able to help you
with how you get from a two to a three for that worker.
This is what the Ombudsman's website looks like.
This is the calculator.
You go in through SACS and Community Services... through the Modern Award,
and that will give you a number of options
in terms of the old state awards so that you can have a look
and see what the calculator comes up with.
Again, it may struggle with unusual calculations, as well.
This is what it looks like once you get in
and have a look at the difference.
So in terms of what industrial obligations and funding.
We need to be clear about what these all mean
in terms of what happens if your funding is insufficient,
or what happens if your funding is a bit different.
The Commonwealth Government has committed to fully fund its share,
including directly funded and jointly funded programs.
So that's good news.
But it does depend on what's happening on the ground with you,
and you need to check on that.
The eight year phase in to assist unfunded programs,
as well as government budgeting.
The Commonwealth Supplementation -
so state supplementation is different to this -
is based on the coast of the ERO for SACS level four.
What this is about is there had to be some sort of formula.
It was that or making employers report back
exactly what's going on in their organisations,
which wouldn't be timely for...
Would have been costly in terms of time for organisations,
and on the whole this should work as an approximation.
If any of this is not ringing true for you,
you'll need to contact your funding bodies
and let them know that this doesn't work for you
because of a number of reasons we'll discuss later.
There are three components.
The Equal Remuneration increase for the applicable rate at level four.
In the case of the last increase,
it was 1.86% for the transitional award rate.
That's because it was only for seven months from December to June 2013.
The proportion of the program funding allocated to SACS wages,
and your grant amount.
For example, if you have 70% SACS wages component,
which you may or may not,
it could be higher for organisations,
for a one million dollar grant you get 1.86 times the 70% wage component
times the one million.
As you can see there, it would be a little over 13,000.
And it'll approximately be 35,000 for the 2013 to 2014 period.
That might not be as high as what you're expecting,
but that's because there's a number of factors in play here.
One is that it was only for seven months.
Two is that we're talking about transitional rates.
And the third is mixing of wages component.
If you're not working with the 70% wages component,
that's going to be one of the first things you report back.
If you have many employees at a higher level than four,
a lot of employees at level five,
you might find that's the type of thing you need to report back
to challenge in terms of your funding bodies.
Let them know that's the reason the formula doesn't work
for your organisation.
In terms of WA supplementation,
as you can see, there are now two systems in operation -
WA State Workplace Relations System,
as well as the Federal Workplace Relations System.
There have been a number of things happen in WA around funding,
and there was a significant bump to funding a little while back
for most organisations, and that was supposed to cover
your state workplace relations system employees.
So you'll need to be looking into that and cross-checking that.
Anyone who's a constitutional corporation
should come under the Federal Workplace Relations System.
As we've discussed, in WA, it's very hard to work out who that will be,
and who that's not going to be,
and you have to do that on an organisation by organisation basis.
I certainly would encourage you to get advice on that where you can.
But there's also the understanding that it's going to be difficult.
SACS employees are employed by non-constitutional corporations in WA
remain under the WA State Workplace Relations System,
and therefore it'll be a question of state funding.
So you're not covered by the ERO increase in that case,
but you'll still get the national wage increase.
So it can be a little bit complicated for those workers.
And certainly in terms of how you function as an organisation,
it's going to be a bit difficult.
SACS employees employed by a constitutional corporation -
again, they're under the national workplace relations system,
and they're going to be subject to the ERO.
The problem then might be that if you want...
..if you are covered by the state system,
you really can't be asking for funding around the ERO.
That might throw up problems for you
in terms of what people's expectations are,
and you might need to have a look at that.
So are you in scope?
Funding agencies provide supplementation to programs
that are expected to employ SACS workers.
So there's no commitment to supplement
where not industrially obliged.
So as discussed, you're going to have trouble getting funding for the ERO
if you're not in the federal system.
Therefore, you might have workers getting the ERO increase
who are not actually entitled to it,
and you'll struggle because you won't have the funding for it.
There's also a number of points with Award Coverage.
In the past, organisations have brought all their employees
under one award because it was simpler.
That may not be necessarily correct.
Where you might see problems around that is where you might have people
under Children's Services,
labour market assistance, aged care, nurses, or health professionals.
If you call a nurse to run a program for you,
you are going to have to consider
the employee is not in fact covered by the SACS award,
and they will have to be coming under the Nurse Award.
Just because you employ someone who is a nurse,
doesn't mean they're under the Nurses Award.
It has to be someone who you're employing as a nurse
and whom you have had a discussion with.
There are two main tests for coverage by industry awards.
One is if the work is within the industry as defined by the award.
So are you a SACS employer - that's the main test,
and for most of you that's an easy one.
And then, is the work covered by the classification definitions
in the award?
That's why a admin worker previously may be under a different award
now come under the SCHADS award, the Modern Award.
Because what they're doing can be covered by the classifications.
So you don't need to do everything within a classification.
But what you do can be described by that classification,
then you're covered.
It can even cover people like home maintenance workers,
but may not cover someone like a carpenter.
So that's where we get into the grey areas
and where you might want to get a bit of help.
Where SCHADS applies, ensure you're using the correct classification.
We discussed earlier about Home Care and how that can be more complicated,
because the Home Care classification isn't covered by the ERO increases.
Industrial Obligations and Funding.
Where you have insufficient funding,
that is not a reason not to pay your employees correct rate.
Unfortunately, "we can't afford it,"
isn't something the industrial bodies are interested in hearing.
It's one of those unfortunate things where legislation
doesn't talk to each other.
If you can't afford to pay it,
you have to go through finding other revenue,
or absorbing, or drawing on reserves,
reducing wages through attrition, restructure, redundancy,
those sorts of issues.
At the moment, not a lot of people are saying that's been the impact
through the ERO.
However, the reality is that we can't simply not pay the ERO
because we can't afford it.
Employees are employed by your organisation, not the funding body.
So it's not going to do to say the funding body didn't pay correctly,
and therefore we can no longer pay you at correct rates.
Same goes for putting things in contracts
that say your position is subject to funding.
It's fine to say you're subject to funding,
but if they no longer have a position with the organisation
you may still need to go through a redundancy process with them.
Because they're employed by you, and not the funding body.
And that's the end of our presentation today.
If you have any further questions, feel free to contact Dion from NDS.