Annualised salaries

The Fair Work Commission on 12 February 2020 issued a Determination varying the Pastoral Award 2010 (PA) to provide for Annualised Wage Arrangements.

Applies only to employees covered by the PA

The new provisions apply only to full-time employees covered by the Award.  They do not apply to employees who are not, e.g. Managers and any other employees who are excluded from the Award because of their employee classification.

Applies only where an Agreement is entered into

A written Agreement must be entered into where an annualised salary includes consideration of a minimum wage, overtime, allowances, overtime and penalty rates, annual leave loading and/or payment for Public Holidays worked.

Agreement must not disadvantage employees

The annualised salary must not result in an employee earning less than Award entitlements.

Record Keeping

Records must be kept in respect of an employee’s starting and finishing times and any unpaid breaks and must be acknowledged by the employee as being correct in each pay period.  This is already a legal requirement.

Reconciliation

Employers must each 12 months from the commencement of an agreement compare the annual salary with earnings that an employee would have been entitled to over the previous year in accordance with the Award.  An employee must be paid any shortfall within 14 days.

Impact on existing Agreements

The new provision is not retrospective and does not affect any agreements already in place.

Commencement

The new Award provision takes effect from the start of the first full pay period commencing on or after 1 March 2020.

There are a number of potential issues that may arise in relation to annualised salaries, e.g. are Individual Flexibility Agreements affected, and their application (if any) to arrangements that are based on an annual remuneration which is expressed as a weekly, fortnightly or monthly payment.

Members having any queries in relation to this issue are strongly advised to contact AgForce.