Awards – which award applies to my business? (updated July 2014)
An award defines minimum terms of employment such as wages, penalty rates, leave entitlements, working conditions and other aspects of the employment relationship.
Most agricultural jobs are covered by either state or federal awards and it is important to be clear about which award applies to the work done on your farm.
As of 1 January 2010, all of the states and territories except Western Australia are part of the federal industrial relations system. This is because all of the states except WA have handed over their powers to make industrial laws to the federal government. The employers in these states are called national system employers
The state industrial relations systems will no longer apply to industrial relations in the private sector in these states.
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History – award respondency
Award respondency is no longer relevant to employment in Australia, except for the purpose of determining entitlements such as sick leave and long service leave which accrued before 1 January 2010.
Federal awards have traditionally applied only to ‘respondents’ to these awards. The word ‘respondent’ comes from the time when the award was created and the union which wanted to create the award served a ‘log of claims’ (a list of employment conditions and entitlements) on businesses which they wanted to comply with the award. The respondents were the businesses which ‘responded’ to the log of claims and became a party to the proceedings in the Industrial Relations Commission. When the award was made, their names will have been entered in one of the Schedules to the award as ‘respondents’.
Respondents may be individual ‘named respondents’ which means their property or business name is actually listed in the award. For instance, the federal Pastoral Industry Award 1998 had 6,000 named respondents in WA alone plus many others around Australia. You can check the award online to see if your name or your property name was one of the Schedules at the end of the Award.
Respondents may also have been ‘association respondents’. This means the business was a member of an organisation which was named as a respondent to the award in the same way as an individual named respondent.
The federal Pastoral Industry Award 1998 had association respondents which are related to the state farming organisations. For example in WA, the WAFF Industrial Association was a named association respondent. Farmers who are members of these organisations were automatically respondents to the federal Pastoral Industry Award 1998.
Named respondency to an award flowed with the property when it was sold or transferred while respondency as part of an association depended on the person retaining their membership of the association.
The WorkChoices laws created 2 categories of federal awards, pre-reform awards and transitional awards. Pre-reform awards applied to national system employers and transitional awards applied to non-national system employers.
This distinction is no longer relevant because all private sector employers in all states and territories except WA are now part of the federal industrial relations system. As of 1 January 2010 pre-reform awards have been absorbed into the modern Pastoral Award 2010
As of 26 March 2011, the Pastoral Industry Award 1998 no longer applies to employers anywhere in Australia.
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Modern federal awards
In 2010, all federal awards in Australia were modernised into industry-based awards. In the farming industry, about 40 awards were taken into account in forming the modern Pastoral Award 2010 and the Horticulture Award 2010. As of 1 January 2010, there is a new federal award for the farming industry called the Pastoral Award 2010.
If your business was run by a company or a trust with a company as trustee as at 1 January 2010, the Pastoral Award 2010 applies to you as of that date regardless of which award covered you before then and regardless of whether you were award free.
This award applies to all national system employers regardless of their respondency in the past and regardless of whether they have been award free (such as the dairy industry in Queensland) in the past.
However, there are special rules about when that award began to apply which depend on your business structure and award coverage as at 1 January 2010.
If your business is not in Western Australia and is run by a sole trader, a partnership or trust which does not have a company trustee and was award free as at 1 January 2010, the Pastoral Award 2010 applies to you as of that date.
If your business is not in WA and is run by a sole trader, a partnership or trust which does not have a company trustee and if your business was covered by a state award, and employed employees as of 1 January 2010, the state award continued to apply for a transitional period until the end of the full pay period commencing before 1 February 2011. After that time the modern Pastoral Award 2010 applies.
If your business is not in WA and is run by a sole trader, a partnership or trust which does not have a company trustee and if your business was covered by the federal Pastoral Industry Award 1998 as a transitional employer as at 1 January 2010, you are bound by the modern Pastoral Award 2010 as of 1 January 2010.
Importantly for dairy farmers, the modern Pastoral Industry Award 2010 retains the hours of work terms of the Pastoral Industry Award 1998 which allows for 152 hours to be worked over four weeks by full time and casual employees before overtime is payable.
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Federal transitional awards - WA
Non national system employers which were bound by a federal award in March 2006 (the Pastoral Award 1998) were able to rely on that federal award until 26 March 2011.
This is called a ‘transitional period’ and the award is called a ‘federal transitional award’. The reason for the transitional period was to allow these employers time to change their business structure to a company structure so that they could continue to use a federal award.
As of 26 March 2011, federal transitional employers are no longer able to use the federal transitional award. After this time they are bound by any state award which applies to them as a common rule award.
In Western Australia the Farm Employees Award 1985 applies to most farming work but does not apply to dairy farming. Dairy farmers in Western Australia who were bound by the Pastoral Industry Award 1998 before 26 March 2011 are now award free. The Pastoral Industry Award 1998 is no longer relevant, except for the purpose of determining entitlements such as sick leave and long service leave which accrued before 26 March 2011. For more information, visit WA state laws
In all states except for Western Australia, state awards applied only in a limited way as of 1 January 2010.
If you are a dairy farmer in Western Australia and are not a national system employer then you are award free as the WA Farm Employees Award does not apply to the dairy industry. The state minimum conditions of employment laws will however apply. For more information, visit WA state laws
If your business is not in Western Australia and is run by a sole trader, a partnership or trust which does not have a company trustee and if your business was covered by a state award, and you employed employees as of 1 January 2010, the state award continued to apply for a transitional period until 1 February 2011. After that time the modern Pastoral Award 2010 applies.
It is your obligation to ensure both you and your employee understand the award which covers his or her job. Your state farming organisation can also advise you about which award (if any) applies to your business.
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