The Fair Work Commission recently announced changes to the Professional Employees Award 2020 (the Award). The changes are applicable from 16th September 2023, so it’s important for employers with employees covered by this Award to be across the key details.
Background
In comparison with most other Awards, the Professional Employees Award has traditionally been quite flexible in respect of its treatment of matters such as payment of overtime and penalty rates.
Indeed, the Award currently only requires employers to “compensate” employees for things such as time worked regularly in excess of ordinary hours of duty, time worked on-call-backs and time worked on afternoon, night or weekend shifts. The manner of compensation is not currently strictly defined in the Award, nor quantified, and could include for example, the granting of additional leave and/or accounting for overtime/work outside normal hours in the setting of annual remuneration.
The flexibility of the current wording of the Award has effectively, to a large extent, left employers and employees to sort out their own arrangements rather than rely on the highly-prescriptive provisions of most other Awards.
Key Changes
Perhaps recognising the significant differences between this and most other Awards, the Fair Work Commission has made the following changes, which take effect from 16th September 2023:
- Employees covered by this Award will be entitled to be paid (at the minimum Award hourly rate for their classification), or receive time off in lieu, for hours worked in excess of 38 hours per week (or in excess of an average of 38 hours per week where the employer and employee have agreed to average ordinary hours of work over a period of up to 13 weeks);
- Records are required to be kept of all hours worked by an employee in excess of 38 hours per week including work performed remotely), or at times which the new penalty rates (below) will apply; and
- A penalty rate of 25% will apply for any hours worked before 6am or after 10pm, Monday to Saturday. A penalty rate of 50% will apply for Sunday or public holiday work. For casual employees, these penalty rates apply on top of the 25% casual loading.
Importantly, these requirements DO NOT APPLY where an employee has a clear entitlement to an annual salary which is at least 25% in excess of the minimum annual wage for their classification. In our experience, most employees covered by this Award (perhaps other than recent graduates) generally receive in excess of 25% above Award minimums given the recruitment/retention challenges in the industries which make up the bulk of employees covered by this Award. As a result, the impact of these changes is likely to be less than it might first appear.
Nonetheless, we still recommend all employers with employees covered by this Award familiarise themselves with the new requirements and ensure they are able to meet obligations from 16th September.
As an aside, the Fair Work Commission as part of its deliberations in relation to this Award, clarified earlier this year that the Award does not apply to employees who are in wholly or principally managerial positions.
Note that this is general information and a summary only. It is not formal or legal advice. Information is current and we believe accurate at the time of publication – 21/08/2023.