Employing Staff in Community Resource Centres. Awards and conditions of employment

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1 Employing Staff in Community Resource Centres Awards and conditions of employment

2 Page 2 Federal or State system? Western Australia has two industrial relations systems federal and state. Each employer has to know which of these two systems applies to them. This is different to the situation in other states. All of the other states (NSW, QLD, Tasmania, Victoria and SA) have referred their Industrial Relations powers to the Commonwealth. This means that the federal system applies to all employers in the not-for-profit community sector in those States. However, Western Australia has retained their own state system alongside the federal system. It is important to be aware of the differences between the two and how to determine which system you fall under. For example, different awards, rates of pay, or rules governing unfair dismissal may apply. The division in WA between the state and federal system depends upon whether or not you are a constitutional trading corporation. For Western Australian community sector employers, the WA State industrial relations system only applies to employers who are not constitutional trading corporations. This will be a matter of fact at any point in time you cannot simply choose the system you prefer or find more convenient. Is your CRC a constitutional corporation? If the answer is yes, then the Fair Work Act will apply and a modern award is likely to cover the employees. If the answer is no, then the WA industrial relations system will apply and a state award is likely to cover the employees. For non profit community organisations, a constitutional corporation is an organisation which is incorporated and engages in significant trading activity. Our advice is that CRCs are probably constitutional corporations because They are incorporated; and They engage in a significant amount of trading activity. In particular the funding agreements are drafted in terms that are of a type that was found by the Federal Court to constitute trading activity 1. In addition, most CRCs sell a range of goods and charge fees for services to the community, which also counts as trading activity. Our Guide Is Your Organisation a Constitutional Corporation? examines this issue in more detail. If you are still not certain about the situation for your particular CRC, you should obtain further advice. 1 Bankstown Handicapped Children s Centre Association Inc v Hillman(2010) 182 FCR 483.

3 Page 3 Determining award coverage for your employees Assuming the CRC is a constitutional corporation, which award applies? Most modern awards are industry-based, although there are a few occupational awards as well. For an industry-based modern award to apply, two tests need to be met: 1. The employer needs to fit within the definition of the relevant industry (usually found in Part 1 of the award); and 2. The jobs performed by the employees need to fit within the duties and responsibilities defined by the classification definitions (usually in a Schedule at the end of the award). If these tests are met, the award automatically applies. You cannot get out of the award by, for example, signing an agreement or contract unless it is an enterprise agreement made under the Fair Work Act. For most of the work of CRCs, our view is that the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS) most likely applies. The work of CRCs can be characterised as community development work, similar to that carried out by a variety of community centres across all states and territories. This fits within the definition of the Social and Community Services (SACS) sector contained within clause 3 of the award: social and community services sector means the provision of social and community services including social work, recreation work, welfare work, youth work or community development work,.. In addition to the employer being in the SACS sector, most of the jobs are clerical, administrative and community development roles which fit within the SACS classification definitions at Schedule B of the award. However, each job needs to be looked at on a case by case basis as it is possible that some roles could exist that are not covered by SCHADS. For example, if you employed a nurse, that role would be covered by the modern Nurses Award If you think there is something different about your CRC that might mean it is not a constitutional corporation, or that you have jobs that don t fit under the SCHADS award, you should get separate legal or industrial advice.

4 Page 4 What pay and conditions apply to CRC employees? Under the Fair Work Act, minimum pay and conditions are set by the National Employment Standards (NES), plus the relevant modern award (usually SCHADS for a CRC). The NES includes: Condition Maximum weekly hours Right to request flexible working arrangements Parental leave Annual leave Personal/carer s and compassionate leave Community service leave Long service leave Public holidays Notice of termination and redundancy pay Fair Work Information Statement Summary of key points Fulltime is 38 hours per week. For employees with family responsibilities, subject to reasonable business requirements. Unpaid parental leave together with a range of rights such as being able to return to the original job, share leave between partners, return to work part-time. 4 weeks per annum. 10 days per annum for illness or injury, or to care for immediate family or household; plus 2 days compassionate leave in the event of death or life threatening illness or injury of a member of the immediate family or household. Unpaid leave for emergency services and for jury duty. As provided by WA legislation Entitlement to time off on public holidays, but may be requested to work if reasonable. Notice of 1 5 weeks depending on length of service and age. Employers with less than 15 employees are exempt from paying redundancy severance pay. All new employees should be provided with this statement which outlines their industrial rights.

5 Page 5 The SCHADS award provides a range of additional minimum entitlements including: Condition Consultation Types of employment Classifications Minimum pay Allowances Superannuation Hours of work Leave Summary of key points Requirement to consult with employees regarding major change and also changes to rostering Provisions relating to fulltime, part-time and casual employment Jobs are classified according to their duties, skills required and responsibilities Pay rates are set for each classification. Annual increments are paid after each 12 months service. The rates are increased each July subject to the National wage case each year. In addition, an Equal Remuneration Order (ERO) applies which provides additional pay increases each December for most classifications. As a result, the rates shown in Clause 15 of the award are not the actual rates payable see further discussion below. Various allowances such as for first aid, travel, overtime meals Paid in accordance with Super guarantee legislation Detailed provisions regarding Ordinary hours maximum shift lengths weekend work breaks between shifts overtime penalty rates shiftwork and loadings Various provisions supplementing the NES leave entitlements, such as annual leave loading, penalty rates for working on public holidays and ceremonial leave What rates of pay apply? From 1 July 2014 (following a 5 year transitional period) most of the rates of pay, loadings and penalty rates in modern awards apply in full as set out in the main body of each award.

6 Page 6 An important exception to this in the not-for-profit community sector is the Social, Community, Home Care and Disability Services Award. This award is subject to an Equal Remuneration Order (ERO) arising from the SACS Equal Pay Case in This delivers increases of up to 23-45% at most classifications, phased in via instalments paid each December over 9 years between 2012 and This has the effect of commencing in 2012 the transition from the classification structure of the pre-modern SACS (WA) Award, to the slightly different classification structure of the modern SCHADS award. This transitional process will continue until Wage increases are added to the higher of either the pre-modern award classification rates or the equivalent modern award rates. The first phase of increases under the ERO came into effect from the first full pay period on or after 1 December This will continue each December with the final instalment due in Federal minimum wage increases will also apply each July. Therefore, in order to determine the legally enforceable minimum wage, it is important to determine the correct classification under both the pre-modern and modern award. Use the Jobs Australia Transitional paytable for SACS (WA) transitioning to SCHADS as a starting point. The rates of pay under Clause 15 of the SCHCADS award do not apply, because of the operation of the ERO. In addition to the paytables provided by Jobs Australia, you can also find information about pay rates by going to the website of the Fair Work Ombudsman ( and downloading a Pay and Classification Guide from the Award Finder section of the website. Finding the award The current version of the SCHADS award can be downloaded from the Fair Work Commission by following the links to the award section of that website. Always refer to a recently downloaded version, as the award is varied on a regular basis. Also, the award is undergoing a major review and we expect more changes soon. DISCLAIMER This Guide is prepared exclusively for the general information of Community Resource Centres in WA as part of a project undertaken by Jobs Australia's Community Sector Industrial Relations Service in partnership with Linkwest and funded by the WA government. While it directs attention to, and comments upon, aspects of industrial relations and employment law, it is not intended to provide legal advice in this area. The information in this guide is of a general nature. Further professional advice should be sought prior to acting upon information conveyed in this Guide. 2 The SACS (WA) Interim state award which covers any community organisation that is not a constitutional corporation also has an ERO that provides similar pay increases.

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