Professional Employees Award Update

The Fair Work Commission has recently published a decision that will amend the Professional Employees Award 2020 (the Award) in relation to hours of work, overtime rates and time off in lieu of payment arrangements. This decision will likely impact your business if you engage employees who fall under the Award. Employment contracts will need to be amended to ensure that they are up-to-date with the updated laws.

We expect these changes will be implemented over the coming months and recommend all businesses review their employment agreements and salary structures in comparison to the Award as they may no longer meet the minimum standards of the Award.

These changes will largely revolve around Award employees who receive a salary that is at or close to the minimum entitlement under the Award. The major proposed changes include:

  • A 38-hour week with work in excess of 38 hours to be paid as overtime. This includes work on or in connection with call-backs and work performed on electronic devices or otherwise remotely.
  • A provision in the Award that allows an employee to accrue, by agreement, time off in lieu of payment for any overtime worked. We expect this will be consistent with most modern awards and therefore consider this reasonable.
  • The introduction of the following penalty rates:
    • 125% for work (whether ordinary or overtime) conducted before 6am or after 10pm on any day Monday to Saturday. This will be in addition to a casual’s loading.
    • 150% shall be payable for rostered hours (whether ordinary or overtime) worked on a Sunday or public holiday. This will be in addition to a casual’s loading.
  • A requirement that an employer keep a record of all hours worked by an employee in excess of 38 hours per week, before 6.00 am or after 10.00 pm on any day Monday to Saturday, or worked at any time on a Sunday or public holiday.

Please note that these requirements will not apply to employers and their employees who receive a salary that is 25% or more than the employee’s respective minimum wage for their relevant classification under the Award.

The Professional Award covers employers mainly engaged in industries including  information technology, medical research, quality auditing or telecommunications services and their employees who fit within the classifications of the Award. For clarity, it is proposed that the Award will now apply to all employees who perform professional engineering duties, professional scientific duties, professional information technology duties or quality auditing provided that they are not employed in a wholly or principally managerial position.

A draft determination is currently in effect. Affected parties have until 10 February 2023 to submit their views before the changes to the Award become formal. When the Award is amended to reflect the above position, any term of an employment contract contrary to the Award will be void and unenforceable. Penalties may also be imposed on employers who fail to adhere to the terms of the Award. Accordingly, we encourage our clients to seek our assistance to amend their contracts to reflect the position under the updated Award.

If you have questions about these changes or require assistance in varying existing and new contracts, please contact our Employment Team on (02) 4927 2900.