New Zealand Law Society - New requirements for Australian employers under Legal Services Award

New requirements for Australian employers under Legal Services Award

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From March 2020 some Australian legal employers will be required to take extra steps to ensure staff are being paid appropriately by logging their staff members’ hours of work.

The Fair Work Commission, the tribunal of Australian workplaces, has approved new rules following a series of decisions on annualised wage (salary) arrangements in modern awards.

Clause 30 of the Legal Services Award 2010, which covers more than 20 Australian firms, will be updated to require employers to log start and finish times and any unpaid breaks of their staff who are on annualised wage arrangements.

Further requirements include establishing the provisions which make up annualised wage arrangements with staff to ensure they are not disadvantaged by missing any minimum wage or overtime entitlements.

Provisions refer to minimum weekly wages, allowances, penalty rates and annual leave.

Change in clause

Three subsequent decisions by the Commission have led to the update in the rules of modern industrial awards. The Commission is required to conduct 4-yearly reviews where practicable after 2014 under s 138 of the Fair Work Act 2009.

The first decision on 20 February 2018 addressed the objective of modern awards, stating “The FWC must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions.”

In conclusively determining the objective of modern awards, the Commission noted eight conditions that must be accounted for to provide a satisfactory safety net, including needs of the low paid, encouraging collective bargaining, promoting flexible work practices and the principle of equal remuneration for work of equal value.

The second decision on 27 February 2019 included a submission from 21 law firms who submitted legal services staff worked in a highly autonomous manner, and the proposed controls would result in a “highly administrative burden.” The decision gave no further comment or recognition to their submission.

The Commission finalised the model clause for modern awards in the third decision on 4 July 2019.

Clause x.2(c) stated “the employer must keep a record of the starting and finishing times of work, and any unpaid breaks taken, of each employee subject to an annualised wage arrangement for the purpose of undertaking the comparison required by clause x.2(b). This record must be signed by the employee, or acknowledged as correct in writing (including by electronic means) by the employee, each pay period or roster cycle.”

In reporting the news Lawyers Weekly noted of the 18,748 private law firms in Australia, 79% were sole practitioners.