Division 2B Awards Transition to Modern Awards from 1 January 2011
November 10, 2010
Throughout 2010, all non-constitutional corporations such as sole traders, partnerships and various not-for-profit employers, were covered by Division 2B Awards, with the exception of Western Australia, due to that State not referring its powers into the Federal System.
Fair Work Australia have now released their decision regarding the transition of Division 2B employers to the Modern Awards.
A summary of the Decision is as follows:
- On 31 December 2010, all Division 2B awards will terminate;
- From 1 January 2011, most non-constitutional corporations will be covered by a modern award (excluding WA). Pay rates, loadings and penalties contained in the Division 2B award will continue to apply;
- From 1 February 2011, non-constitutional corporations will apply the first transitional increase (that Federal employers completed on 1 July 2010);
- For transitional purposes, non-constitutional corporations will transition from the equivalent NAPSA to the Modern Award.
- On 1 July 2011, all Federal and non-constitutional corporations will transition together to the 60% phase.
The decision outlines specific arrangements where Division 2B awards had wages that were prescribed by a State Pay Equity Order, such as many of the State Child Care Awards. The decision outlines that where an employee, or new employee, would be entitled to a higher rate of pay because of a State pay equity order, the rate of pay will continue to apply to all employees, unless the equivalent modern award rate is greater.
This means that where a State pay equity order has been made in regards to a Division 2B award, the rates of pay must be maintained until the equivalent modern award rate is equal to or greater than the Division 2B rate. All other provisions that can be transitioned, such as casual loading and weekend penalties for example, are transitioned from 1 February 2011. These provisions will transition to the second phase on 1 July 2011.
If you have any questions regarding the transition of non-constitutional corporations, please contact Travis Lancaster, Consultant.
