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Hello and welcome to the NSW SACS Education and Information Workshop.
This is a program that's run by the National Disability Services,
ACOSS and Jobs Australia as a joint program,
and it's funded by the Australian Government.
OK. Today I'm going to talk about the transition to the Modern Award,
in particular, the transition timetables, penalties and loadings,
some other conditions, the Modern Award review,
at least through to November 2012,
some implementation issues,
as well as the Equal Remuneration Order and its implementation,
pay rates and also the industrial obligations around funding.
Moving quickly along.
The transitional timetable from SACS NSW to SCHADS
was a little bit changed due to the ERO implementation.
But basically what's happened is at 1 July last year,
we moved the classifications across so that should be done by now,
everyone should be on top of that.
The pay rates, including ERO, will be phased in from July 2012
through to December 2020.
So what that does mean is that any transitional rates, or phasing,
all this sort of... all the work we've been doing will be happening
through till... late through to 2020.
So if you make a new position in December 2019,
you will need to classify that under the old award
and under the Modern Award
and work out what the transitional rate will be.
Penalty rates and loadings will be phased from July 2012
through to July 2014.
So by July next year,
that phasing will have ended and will be right through to the Modern Award,
and the only parts of the Modern Award we'll still be looking at
will be those pay rates in terms of classifications.
Allowances moved at July 2010,
and other conditions also moved at July 2010.
In terms of redundancy and severance,
some provisions of that are preserved through to July 2014.
And so if you're going to make,
or you're looking to make people redundant, or to re-structure,
you might need to have a look at the old award
to make sure that you're paying the higher of the two.
Just a quick example of how the shift loading's phased.
It's relatively simple in NSW.
For example, the loading pre-July 2012 was 15%
and it's moving to 12.5% next year.
So there's a phasing according to the difference.
Now this is because it was put on hold,
so all other awards phase at 20% increments per year,
um... because of ERO, the SACS award is going to move suddenly,
basically by three increments.
So it will move to 40% of the difference,
meaning in this instance that it's at 13.5% loading as of July 2012,
and it will phase out to 20% difference this year,
and will move to 13%.
That is subject to maintaining take home pay,
but the thing to remember about take home pay
is you don't need to find where the shortfall might've come in,
you just need to make sure that the dollar value at the end of the week
is the same.
So if someone moves shifts, for example,
that's not something you need to make up in terms of take home pay.
So it really is only about exactly the same shifts,
and what someone takes home at the end of the week.
Just a bit a of a review of the shift penalty changes
from SACS NSW to the SCHADS award.
Not hugely different for part-time or full-time workers.
As you'll see, there's a move in the afternoon shift from 15% to 12.5%.
From night shift from 30% to 15% -
that might be where we have a bit more of an impact.
Public holidays remain the same, Saturdays remain the same,
and Sunday's move by 25% up to 100%.
Certainly the element...
..one of the things to remember about all these things,
is that there's no need for you to phase
if you want to maintain a higher penalty for your workers.
That certainly will be up to you and what your funding arrangements allow.
There's no problem with paying more than these minimums if you'd like to.
But that's certainly up to you as an organisation.
Again, you have to be careful of that reduction take home pay.
Probably not going to be a huge impact in the case of shift workers,
because it is off-set by things like the CPI, or minimum wage increases.
If we have a look at the casuals,
that's where there might be a bit more of an impact
in terms of take home pay.
As you can see, there's a phasing from 24.58% up to 25%.
Most organisations probably are already paying 25%.
But everything phases.
So even that small percentage will phase through.
Where you see the big impact there is the Saturday and Sunday loadings.
Now we are awaiting the outcome of the Modern Award reviews -
there could be changes to that.
But at this point in time,
we're looking at phasing down from 50% and 75%
to zero on Saturdays and Sundays.
That is subject to take home pay.
So if you have someone who's a casual who only works Saturdays and Sundays,
you might find that they might be subject to the take home pay orders.
But look, the thing to remember is that anyone who's working
every Saturday and every Sunday
really should be a part-time staff member anyway.
So that might be more your concern in the case of those workers.
There's also nothing to stop you of course maintaining those allowances
if you would like to.
But again, that's gonna be subject to whether or not you can afford it.
So the Modern Award Review - this is the outcome of November 2012.
So really the reason these things came through so quickly
was because all parties were fairly consistent in their interpretation
of these parts of the award.
There was a clarification that the four hour minimum engagement
does not preclude work on both sides.
So you can work both sides of the sleepover,
you just must work at least a four hour block on one side or the other.
You can certainly work four hours on both sides,
you could work six hours on one side, two hours on the other.
The award certainly doesn't stop you from doing that.
Employees, in addition, there was one small change,
which is that employers and employees may agree
to reduce the break between shifts from ten hours to eight hours
where it's associated with sleepover.
So this is only in cases
where there's a break and there's a sleepover on one side or the other.
And it has to be by agreement,
and I suggest that maybe that agreement should be in writing,
or there should be some notification to employees that if they disagree
they can certainly disagree,
and ask for the ten hour break rather than the eight hour break.
So a memo, an email, something in writing
so that employees understand that it's their right to choose
to have a ten hour break if they wish,
or if they can engage in this eight hour arrangement with you.
Other changes...
Now you notice that most of these are about clarification of the award.
The Modern Award Reviews were set up as a clarifica-...
..with the idea of being a clarification of the award,
not a chance to change the award.
So they are quite small changes.
In some cases, they're just clarifications.
There was a note added to the definitions of Home Care workers.
And basically what it was doing
is to ensure that there was an understanding
that a worker was not a Home Care worker
just because they do work in their home.
Certainly, we'd all be aware
that there would be social community services work
that happens in the home, as well,
it does not become Home Care work because it's been done in the home,
it may still be SAC work.
Couple of other small changes.
Loadings payable for broken shifts
are determined by the time of the end of the shift.
So if you have three hours and then a large break,
and then another four hours at the end,
when that four hours ends at the other end,
that's going to let you know what sort of shift it is,
and that will be paid for the entire shift.
So if you've got seven hours worth of work,
then that seven hours will be at that shift provisions.
So just remember, with the exception of weekends and public holidays,
that shifts are defined and only have one allowance -
you don't break them up.
24 Hour Care provisions only apply to Home Care workers.
Again, that was just another clarification
that shouldn't be seen as anything particularly different at this point.
There are a few other issues that are still up in the air.
They will need to be determined by a Commissioner.
Some issues around part-time employment.
Certainly move from casual to part-time employment is part of that.
Small employer redundancy.
Some awards previously have a small employer redundancy in them,
and there's been an application to put that back into the Modern Award.
Some further discussion of broken shifts, casual penalty rates -
so those Saturday and Sunday rates.
Annual leave and public holidays.
So we should see that announced at some point later this year.
Certainly there have been a few implementation issues around this.
Certainly the rostering arrangements has been problematic,
and hopefully that move from having
a ten hour break between those sleepover shifts
to an eight - to the ability to have an eight hour shift,
might make it easier for rostering.
The big issues have been long-term casuals and part-time employment.
Where you have long-term casuals who want to stay long-term,
but are actually part-time,
you are carrying a liability with those workers,
because they may make an application and be successful in that application
to have their annual leave paid.
So the argument that a casual's a casual
simply because they're called that and paid that,
unfortunately doesn't work.
If they are regular and systematic, they are part-time employees,
and you might need to have a look into how that works.
This also leads into a discussion
around job design and classifications.
Having had this opportunity to review all classifications,
it's certainly given us the chance to review how we design our jobs,
and also to have a look at the way we work around classifications.
For example, in the situation where you might have
higher duties to share around certain employees,
we need to be careful that that's not creating an opportunity
that work has to be classified up a level.
We might need to look at re-designing that kind of work is distributed
to ensure that we're not creating entitlement for employees
to be at a higher level where they're not really performing those duties.
Moving on to the ERO implementation.
The Modern Award rates will increase by between 23% and 45%.
Remember, those are the Modern Award rates, not the transitional rates,
which are treated a bit differently.
That does include the 4% increase for barriers to bargaining.
So if you hear anything about the 4%,
it doesn't need to be added at the start,
it doesn't need to be added as we go along,
it is included in that 23% to 45%, so that's not a concern.
The full amount will be payable by December 2020.
So we'll be doing this through till December 2020.
It's phased in by nine equal instalments each December.
So for the purposes of budgeting,
you can use what the percentage increases that people saw were
as a guideline,
although it's never going to be exact.
Pay rates are affected by transitional arrangements,
moving from old awards to SCHADS.
And that's where we come across the difficulties in NSW.
Where the old rates are maintained as transitional award rates
if they are higher than the Modern Award.
So that's going to be the case for most employees in NSW.
They will see a maintained transitional above award rate.
Now the important thing is to think about these rates as "transitional",
not as above award rates.
If you consider them as above award rates there might be some confusion.
They're transitional award rates, and they need to be treated as such.
If they're lower, we move directly to the Modern Award.
The transitional rates increase at a slower rate than Modern Award rates
to get to the same place in 2020.
So those transitional rates are going to remain above award and through...
..above the Modern Award rate through to 2020,
when they will reach the same point.
So looking at how that's calculated.
Where A equals Equal Remuneration payment, or where we'll be in 2020.
So that's going to change every year due to the CPI increases,
or through minimum wage increases.
With B equals Award rate, or where we are now.
Either the Modern Award rate or the preserved transitional award payment.
Each December, we add 1/9 of the difference between the two.
So we get the current rate for an employee,
we take that away from where we'll be in 2020,
and add 1/9th.
Of course that means we recalculate it every year
to take into account CPI increases.
So this year we'll see 2/9, next year 3/9, etc, etc.
This is just a bar graph
to give you a bit of a look at how that looks practically.
So where A equals ERO payments,
that's going to change every year to 2020.
Where B equals current Modern Award rate.
We take away the B from A.
And we divide it by nine and add 1/9th.
So there you can see what it looks like.
Where we have a preserved above Modern Award rate,
so we can see a different situation there,
and that's going to be the situation for most workers in NSW.
We'll take B from A...
..we add 1/9th of the difference.
So there as you can see,
someone on a current preserved above Modern Award rate
is always going to remain above the person on the Modern Award rate.
They're going to see increases every year all the same.
That increase is just going to be smaller.
This is what it looks like as a graph.
As you can see, both lines are going to the same place in 2020.
The bottom, or darker green line there is the Modern Award.
The one above it is the transitional rates.
So as you can see, it's a bit bumpy, because it changes every year,
because of CPI which is why we can't necessarily tell you
what the increase exactly will be every year,
but they do go to the same place in 2020.
All right, so this is what they look like.
So you'll see there in the fourth column -
that's the highest increase anyone would see.
And that would only be for people on the Modern Award.
Where we see people on NSW transitional rates,
you'll notice that they're much lower.
For example, at level three,
you'll see that it's possible that some employees
would see 0.8% of an increase.
That's why the rate of the increases might be significantly lower than
what you might be expecting.
That's because those transitional rates are not nearly as high
in terms of the increases per year.
It's important to remember that these are just guesstimates at this time,
and they might change because of the CPI increases.
So, it might do for you, um...
..approximating your budgeting, but it's not going to be exact.
The good news is you can get pay tables online,
so you get those from NDS's... webpage.
So have a look there for Jobs Australia pay tables.
You'll be able to get those for a little while.
They present the most likely translations,
together with the applicable pay rate -
the Modern Award rate or transitional award rate.
So if you have unusual translations,
you might need to get a bit of help with that,
either working it out for yourself,
having a look online at the Ombudsman's website,
or contacting your employer organisation
to have a chat with them
about how you might deal with an unusual translation.
This is what a Jobs Australia table looks like.
As you can see, you go to the first column
and you find where your worker was previously classified.
You go to the second column and match them up to where they are now
to find their salary.
You'll notice that each level occurs twice in the first column.
That's because you need to match it up with the second column.
So for example, where you see Community Services worker grade 2,
and it occurs twice,
if you go across, one lot is for where they've gone to a level two
under the Modern Award,
and one is for where they've gone to a level three under the Modern Award.
So you do need to match up, both with the correct levels.
If you try to do it from the Modern Award backwards to the SACS award
you're gonna have a bit of a struggle.
So go to the first column, then to the second column,
and you can find out how much people need to be paid.
This is what the Fair Work Ombudsman's website looks like.
They have a calculator and it can be a useful tool for you.
I do suggest that you don't rely on that solely to do your translations,
cause certainly we're all open to making mistakes.
So if you are using this, I do suggest that perhaps it's better
to have a look at your own translations
and have a go at it yourself,
and then try and cross match it with the calculator
to try and see if you can work out what it should be.
Certainly if you've got pay tables
that should work the majority of the time.
The Equal Remuneration Rate Calculator
may not help you with unusual translations, either.
That may also cause you some troubles.
That's what it looks like when you go in and have a look at it.
Different translations are possible, but unlikely,
so that's why they're not, on the whole, represented through that.
Usually it comes from over classification under the SACS NSW.
Now if that's happened you can't go back in time
and change that NSW classification,
you're going to have to work with it into the future.
So you will have to continue using that over classification
as a starting point, unfortunately.
So get it right with the Modern Award,
but if you did have previous issues with it
you might be stuck with that classification for the time being,
and that could end up in the situation
whereby you need to have things manually classified,
or you have a go yourself with that one.
Moving on to Industrial Obligations and Funding.
We'll have a look at that.
The Commonwealth has committed to fully fund its share of programs.
Both directly funded and jointly funded programs.
The eight years to phase in is to assist in unfunded programs,
as well as government budgeting.
NSW has also committed to supplement State funded programs.
Now of course, what this looks like on the ground
is something you have to deal with with your funding bodies.
Just having a look at how that supplementation came about.
Pretty much there would've been two options
in terms of working out supplementation.
One was to come up with some kind of, um...
..to go through this process and come up with a summary of how to do it.
The other was to go to organisations and actually work out exactly
who people were employing.
Now certainly this one is more timely,
and probably the better option in terms of getting to the bottom
of what's happening out there.
So it's based on three components.
The ER increase for applicable rates at SACS Level 4.
Actually, you can see that was only 0.78% for the transitional award rate
for the seven months.
So it's lower because it was only seven months, not 12 months,
and it's also low because it's about transitional rates,
not the full Modern Award increases.
It also takes into account the proportion of program funding
allocated to SACS wages, and the grant amount.
Now you can see there's two variables there that could create problems
if you don't have the majority of your workers at a Level 4,
if you have them at a higher level, or if the proportion of your program
funding allocated to SACS wages
is higher than that 70%.
Looking at an example, where we have a $100,000 grant,
that's 0.78% x 70% x $100,000.
So there you go, you're looking at a $546 increase for 2012 to 2013.
So it's going to be higher next year, because it's for a longer period.
But that's just one example.
What you need to be looking at is if you, for example,
have a lot of SACS workers at Level 5,
that may cause problems,
or if your SACS wages component is a lot higher.
In those cases, that's what you need to be reporting back
to your funding body -
is that we're not working with the 70% wages component,
and the average of our workers isn't at Level 4, it's at Level 5,
for example.
Now with the NSW Supplementation.
Supplementation is paid to funded organisations.
So if you're unfunded you're not going to get supplementation.
FACS letters were sent out on 1 December 2012.
So most people should've seen those.
Again, amounts were based on SACS Modern Award wages component
of recurrent funding grants.
And wage component vary due to program characteristics.
So somewhere between 42% and 70% in most cases.
So again, the key factors are the same.
There's SACS wages proportion, and the wage gap percentage.
So if either of those things are different for your organisation,
you need to be reporting that back to your funding bodies
and letting them know what's happening.
Again, the supplementation table is calculated as follows.
The grant amount, times the SACS wage proportion, times the wage gap.
There were some conditions of payment.
Organisations need to confirm that the funds will only be used
for ERO related wage increases.
any surplus supplementation is to be returned.
And you need to confirm your agreement by 28th February.
If you haven't done as such,
I suggest that you need to do that as soon as possible.
Um... there certainly is some issues there,
that if you have above award increases for whatever reasons,
whether they be due to having some sort of collective agreement,
or whether or not it's something your organisation does
as part of its general employment practice,
you may still need to be providing increase on those wages,
even though industrially you're not obliged,
your funding arrangements may oblige you to be paying those increases.
So you need to have a look at how things are worded in contracts,
what your collective agreement states,
and also what your contract states about how that money is to be used.
Certainly forward queries to your Regional Contract Managers
to have a chat with them about that if you need to.
All right, are we in scope?
Funding agencies provide supplementation to programs
that are expected to employ SACS workers.
There is no commitment to supplement
where you're not industrially obliged.
So if funding agencies aren't aware that you employ SACS workers,
or if you're employing people as SACS workers who aren't SACS workers,
is where you might have a bit of a struggle.
Um... where we have some award coverage issues,
certainly where we have perhaps children's services,
who should be employed under Children Services
and not under SACS.
Those employees are not subject to the ERO.
We also have the occasional one-off stuff.
Some might be doing labour market assistance,
aged care, nurses, health professionals.
Those individuals are not going to be covered
if they're covered by those awards.
So where you have to employ a nurse, they may well be under SACS.
If you specifically have asked for a nurse
and you employ a nurse as a nurse,
that person is not going to be covered by the SACS awards,
they'll be covered by the nurses award.
They're not going to be subject to the ERO,
and not going to be getting that sort of funding.
There are two main tests for coverage by the industry awards.
One is that the work within the industry,
is that the work is being done within the industry as defined by the award.
So that's you as an organisation, what industry do you work in.
The majority of you, I assume, is going to be SACS,
and that puts you under that award.
Remember, work has to be covered by the classification definitions
of that award.
So this is why we have admin workers coming under SACS,
is because even though their whole job isn't described by classification
their jobs can be described by some classifications.
So you don't need to be doing everything in the classification
to be under that classification,
you just need to be doing parts of it.
And that's where your admin workers come in.
If SCHADS does apply,
just ensure we're using the correct classification schedules.
Home Care or SACS are the big areas to be careful of around that.
It's important to remember that Home Care is not subject to the ERO.
Now what do these industrial obligations mean to our funding?
If you have insufficient funding,
it's not going to be a defence to say that we were not funded,
therefore we incorrectly paid someone.
If you have SACS workers they get the ERO,
it's not going to be a defence to say you couldn't afford it.
There's no discretion to underpay due to that funding.
The options really are to find other revenue,
or absorb by drawing on reserves,
or reduce your wages bill through attrition or structure.
Employees are employed by your organisation, not the funding body.
So the thing to be really careful about,
is it's fine to have something in a contract like,
"The position is subject to funding."
But the thing to remember is that that person's still an employee,
and it's not going to suffice to say we've lost the funding,
therefore there's no entitlement to that person.
They may be subject to redundancies and all sorts of other things.
So you just need to keep an eye on that.
Your employees are still your employees,
and it's not going to pass on the responsibility of that
to the funding body, because it's your responsibility as the employer.
That's the end of our presentation for today.
Certainly, if you have any further questions
feel free to contact someone at NDS.
Thank you.