By Victor Song, Australian Business Lawyers & Advisors
On 22 December 2023, BNSW and ABI filed an application in the Fair Work Commission (FWC)
to introduce an exemption rate into the Clerks – Private Sector Award 2020 (Clerks Award).
The BNSW and ABI proposal would allow employers to pay full-time employees 55% above the minimum award rate and, in return, be exempt from several award clauses, including those related to breaks, allowances, overtime, penalty rates and annual leave loading.
The exemption would apply to work up to 50 hours per week, with any hours beyond that compensated at 200% of the hourly award rate.
Public holidays remain excluded from the exemption rate.
What does this mean?
Exemption rates offer several advantages for employers when managing payroll. These benefits are particularly valuable for businesses needing to streamline operations, reduce compliance costs and simplify payroll structures.
If successful, the application could set a precedent for similar arrangements across other modern awards, providing broader opportunities for employers to adopt similar streamlined pay
structures.
Ultimately, this will further reduce administrative burdens across various sectors and industries while maintaining a balance between employee entitlements and employer flexibility.
What has happened so far?
The Australian Services Union has opposed the application.
The Ai Group supports the concept of an exemption rate but is likely to propose a lower rate than the 55% proposed by BNSW and ABI. At this stage, no justification for the Ai Group’s proposal has been provided.
BNSW and ABI are required to submit evidence to the FWC by 20 December 2024, with a report back scheduled for 17 January 2025.
As part of this process, BNSW and ABI have commissioned a research team from the University of Wollongong to study the use of annualised salaries, compliance issues, and record-keeping practices. This research involves surveys and focus groups to assess how employers engage salaried employees and the challenges associated with timekeeping and compliance.
Focus groups were also held in September 2024 to discuss the types of issues employers face with respect to engaging employees on annualised salaries and to identify issues that would be worthy of survey exploration.
Updates
As the matter progresses, we will provide further updates. If you have any feedback or wish to discuss this matter, please get in touch with our team.
More information on the Exemption Rates application (AM2024/34) matter can be accessed on the Fair Work Commission website page.
By Victor Song is a Senior Associate at Australian Business Lawyers & Advisors.