- Why is there a regulation?
- What is a Transitional award?
- What is a Transitional Pay Equity Order (TPEO)?
- Who has to pay the Queensland pay equity rates?
- Is there a list of who is covered by the regulation?
- Who is exempt from the regulation?
- How do I know if my organisation is a Constitutional Trading Corporation?
- Why do the rates in the regulation include the 2010 and 2011 state wage increases?
- The pay rates in the regulation do not include the 7.5 per cent loading for levels 6 – 8. Should we stop paying that loading?
- The regulation took affect on 1 March 2012 – When do I have to pay the backpay?
- We have been paying staff at above award rates. Can these over award payments be incorporated into our backpay calculations?
- I thought we were covered by the modern award, SCHCADS – how does the regulation affect that?
- Does the national equal pay decision apply to employers covered by the regulation?
- We are not covered by the regulation and weren’t covered by the Queensland Community Services & Crisis Assistance (QCSEA) award but have been paying the Queensland pay equity rates anyway. How does this affect us?
- We have some staff who we received supplementation for, but we also have some staff funded by the Federal Government or through other state programs for which we did not receive supplementation. Does the regulation apply to all staff?
- We only received supplementation for a very small part of our overall work and we can’t afford these rates of pay plus the back pay – what do we do?
- Where can we get more information?
A. In 2009 the Queensland Industrial Relations Commission made a pay equity decision which led to large pay increases of between 18 – 37% for SACS workers employed under the state award Qld Community Services & Crisis Assistance Award (QCSCA). This did not apply to workers covered by the federal SACS (Qld) or CASH (Qld) awards. However the “transitional” SACS and CASH awards were due to expire on 27 March 2011, at which time workers covered by those awards would have transitioned to the higher Queensland pay equity rates.
The move to a national system under the Fair Work Act in 2010 meant that Transitional awards did not expire but were replaced by modern awards. The regulation is intended to preserve what had been the status quo and ensure the pay equity rates do apply from March 2011. This reflects agreements reached between the federal government and the state government and Australian Services Union at the time of the referral of IR powers that enabled the move to the national system.
A. Under Workchoices, only constitutional corporations could continue to be covered by federal awards. For constitutional corporations in our sector, the SACS and CASH awards became “pre-reform awards”. However, many community sector organisations were not constitutional corporations (because they did not engage in significant or substantial trading activity). For those organisations, the awards were “transitional awards” because they were due to expire in 2011 at which time the employer would move into the Queensland state IR system. But this all changed when Queensland referred its IR powers and moved to the federal system in 2010.
A. A TPEO preserves the effect of the pay equity decisions for state awards such as the Queensland Community Services & Crisis Assistance (QCSCA) award. Even though state awards no longer apply because we have moved to the federal Fair Work Act, the pay rates are preserved via a TPEO.
A. There are two types of organisations that have to pay the Queensland pay equity rates (sometimes also referred to as the Fisher rates, referring to Commissioner Fisher who handed down the pay equity decision in 2009):
i. Organisations who were originally covered by the Queenslandd Community Services & Crisis Assistance (QCSCA) award have had to pay the rates since 2009; and
ii. Organisations that are covered by the Regulation have to pay the rates for ongoing SACS and CASH staff from 1 March 2012, and backpay for current and former employees to 27 March 2011 (payable in three annual instalments from July 2012).
N.B. Some organisations have chosen to pay the rates as “over award payment” either because they were sufficiently supplemented to afford it, or as a deliberate policy for strategic reasons.
A. The regulation covers organisations that satisfy four criteria – see the Fair Work Ombudsman’s Information sheet ‘Queensland Pay Equity Regulation’.
A list of 316 organisations that may be covered by the regulation is provided in the ‘Explanatory Statement’, which accompanies the regulation. This list is for guidance purposes only. This means that if an organisation satisfies the four criteria, but has been over-looked during the development of the list they may still be covered by the regulation.
A. The regulation and the ‘Explanatory Statement’, which accompanies the regulation articulate two instances in which the regulation is not enforceable:
i. If the organisation was a constitutional corporation immediately before 1 January 2010, they will be exempt because the relevant federal award applied as a Pre-reform award, not a Transitional award. If this is the case, then there is no need to consider any other factors.
ii. The regulation states that if any kind of statutory agreement (such as an enterprise agreement) applied prior to 1 January 2010, the organisation will also be exempt. This is a straightforward factor for constitutional corporations who are already exempt anyway. But for non-constitutional corporations, there may be a question as to whether this can be taken at face value for agreements registered federally prior to 2010. For those organisations, further advice should be sought.
A. For some organisations this will be a difficult issue. The test is not always clear cut. On a practical level, an organisation needs to be consistent in its approach to this matter, as a number of industrial obligations can be affected by an organisation’s status. If you have not already determined this question for your organisation, there are a number of sources of advice about this including:
i. Check the Jobs Australia guide ‘Is my Organisation a Constitutional Corporation?’
ii. Contact Sarah McKinnon from the Department of Education, Employment and Workplace Relations (DEEWR) on 02 9246 0427 or firstname.lastname@example.org for free legal advice on your organisation’s trading status.
A. This is a complex issue and has been subject to some debate. The new Regulation resolves any uncertainty on this issue by specifying that the 2010 and 2011 state wage increases apply. The Federal Government's reasoning for including the 2010 and 2011 increases is explained within the ‘Explanatory Statement’, which accompanies the Regulation.
To discuss the application of state wage increases within the Regulation please contact Jobs Australia on Free call 1800 7295 4637 or email@example.com.
9. The pay rates in the Regulation do not include the 7.5% loading for levels 6 – 8. Should we stop paying that loading?
A. The regulation sets out the ordinary rate of pay. All other conditions including loadings are set by the modern award – the Social, Community, Home Care & Disability Services Industry Award 2010 (SCHCADS).
i. The transitional provisions in Schedule A of SCHCADS provide that loadings from pre-modern awards still apply for now. Where the old loading is different to the modern award, or is not provided by the modern award, there is a phasing in/out process that commences from July 2012.
ii. The 7.5% loading should therefore still be paid to employees at levels 6 – 8 who have always received it, until at least July 2012.
iii. The Fair Work Act also provides that no employee should have a reduction in take home pay, so for existing staff this needs to be considered before phasing out the loading.
iv. From July 2012, employees at levels 6 – 8 will be entitled to be paid 40% of the loading (i.e. a loading of 3%). This then reduces to 20% of the loading (1.5%) in July 2013, and then no loading from July 2014.
v. On a practical level, it should be remembered that under the pre-modern awards, the 7.5% loading was in exchange for not needing to pay overtime to employees at levels 6 – 8, where they worked a couple of hours overtime on average per week. It was a flexibility recognising “professional hours” for senior staff. The modern award does away with that flexibility and provides an entitlement to overtime for these workers the same as all other employees under the award. One option is to maintain the 7.5% loading as compensation for any overtime up to about 2 hours per week on average (because that is roughly equivalent to 7.5%). Alternatively, the loading can be reduced, but the quid pro quo is that the flexibility around hours is also reduced.
A. The first instalment of backpay can wait until June 2012. 35% of the backpay due should be paid by 1 July 2012. Nothing prevents you paying more or earlier if that suits you.
See ‘The Regulation’ for information about the backpay including the backpay payment schedule.
11. We have been paying staff at above award rates. Can these over award payments be incorporated into our backpay calculations?
A. You only have to ensure employees are paid at least what they would have been paid in accordance with the base rates set by the pay equity order. You can absorb those rates into any over award payments made. However, where employees have been over classified, this approach runs the risk of creating significant confusion and disputation because the employees are likely to be expecting a different outcome. Over classifying employees can raise a range of contractual and industrial issues, and you should obtain more detailed advice from your employer association or Jobs Australia (Free call 1800 7295 4637 or firstname.lastname@example.org).
A. You are still covered by SCHCADS in relation to all conditions except the pay rates. The pay rates are set by the regulation which will prevail until such time as the modern award provides for higher wages. This will take a long time.
A. In a sense, the regulation flows the Qld pay equity rates on to you immediately, whereas the national equal pay decision flows similar rates on to employers over an 8 year timeframe. The national pay rates will not apply until they overtake the Regulation rates.
This is explained in the ‘Explanatory Statement’, which accompanies the regulation.
14. We are not covered by the regulation and weren’t covered by the Queensland Community Services & Crisis Assistance (QCSCA) award but have been paying the Queensland pay equity rates anyway. How does this affect us?
A. A number of organisations have chosen to pay higher rates as a policy decision even though no award or regulation requires them to do so. This means you are simply paying above award. There is nothing industrially that requires you to change what you are doing.
15. We have some staff who we received supplementation for, but we also have some staff funded by the Federal Government or through other state programs for which we did not receive supplementation. Does the regulation apply to all staff?
A. Yes, under the regulation the pay equity rates should be paid to all staff that were previously paid under the SACS or CASH awards. For staff not covered by the regulation seek Industrial Relations advice from your employer association or Jobs Australia (Free call 1800 7295 4637 or email@example.com).
A. The answer to this will be different for different organisations. It depends on the scale of the problem and where you get your income from. You may need to get individualised advice – either from Jobs Australia (Free call 1800 7295 4637 or firstname.lastname@example.org) as part of the QCOSS/NDS/Jobs Australia project funded by the Department of Communities, or from your own employer association. Possible answers include:
i. Check whether the $30M federal funding package announced with the regulation will assist you. We know this won’t work for every organisation but it will assist some.
ii. Talk to your funding bodies. The Queensland Government is encouraging organisations who are experiencing financial difficulties to contact their usual contract manager, who will work with a senior program officer on a case by case basis.
iii. Look at your service agreements and use the QCOSS Unit Costing Tool. This tool can assist organisations who wish to calculate and articulate the effect that increased wage costs will have on their service agreement outputs. The tool is designed to empower organisations to confidently and effectively negotiate or re-negotiate service agreement outputs.
i. For help interpreting the Regulations or industrial relations and human resource management advice contact Jobs Australia
(Free call 1800 7295 4637 or email@example.com) or your employer association.
ii. The Fair Work Ombudsman is also offering advice to organisations including general guidance on whether the Regulation applies to your organisation and required rates of pay. You can access this advice on the Fair Work website or Infoline 1300 734 322.
iii. Department of Education, Employment and Workplace Relations (DEEWR)
- Funding: Michelle Boundy 02 6121 3334 or firstname.lastname@example.org
- Free Legal advice regarding Constitutional Trading Corporation status: Sarah McKinnon 02 9246 042 or email@example.com