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State awards given the boot

State awards given the boot

09 Feb 2017

Queensland apprentices and trainees could be owed millions of dollars in back pay after the Fair Work Commission (FWC) held that the correct industrial instruments for determining apprentice rates in Queensland are the Modern Awards.
Some Queensland businesses were still applying old State based awards and orders in respect of apprentices and trainees under the mistaken belief that transitional provisions of the Fair Work Act 2009 (Cth) continued to apply to employees under training arrangements (such as apprentices and trainees). This is a position that the Fair Work Ombudsman is alleged to have advised many employers in Queensland to be the case.
A Full Bench of the FWC dismissed an appeal by All Trades Queensland (All Trades)[1] who maintained that old State awards are the correct underpinning industrial instruments when applying the better off overall test (BOOT) to an enterprise agreement presented to the FWC for approval. The Bench confirmed a decision of a single member of the FWC late last year that the correct industrial instruments to apply the BOOT against were the Modern Awards. 
The decision confirms that old State awards and orders that set out rates of pay and conditions for apprentices and trainees in Queensland ceased to operate from 1 January 2014. This is despite the Queensland State Government providing submissions to the FWC in its 2015 Federal Minimum Wage Case expressing a view that these instruments still applied. The Bench held that the transitional provisions relied on by All Trades were not intended to have long term effects and their main intention was to allow existing apprentices and trainees to complete their training within the pre-existing arrangements.

What this means
The effect of the decision is that the rates of pay for apprentices employed by businesses across Queensland need to be consistent with the applicable Modern Award terms from 1 January 2014. This could result in significant liability for back payments for employers of apprentices and trainees.
What should businesses do?
Businesses who may be affected by this decision should:
1.       Determine the correct Modern Award to apply;
2.       Apply the Modern Award rates for apprentices and trainees;
3.       Review wage records to determine which employees are affected;
4.       Seek advice on applicable pay rates from 1 January 2014;
5.       Calculate the amount of any underpayment; and
6.       Make payments to affected employees to correct the underpayments.
As always, if there is any issue within your business that might give rise to a claim, early intervention is the best protection. Feel free to contact us on 1300 565 846 if this raises any questions.

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The content of this article is general in nature, and is intended to provide commentary only. It does not constitute advice, and should not be relied upon as legal advice. Targeted formal legal advice should be obtained prior to any action being taken in relation to a matter arising in response to the content of this article.

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