Preparing for Annual Wage Review

The Fair Work Commission (FWC) is scheduled to announce its 2021-2022 annual wage review (Decision). Following the wage review, the FWC may announce a wage increase before 1 July 2022.

When the Decision is released, the pay guides for the Vehicle Repair, Service and Retail Award (Vehicle Award) and the Clerks Private Sector Award (Clerks Award) will be updated and made available to HVIA members.

What steps can be taken to prepare?

In preparation for the Decision, HVIA members are encouranged to:

• review existing employment contracts to ensure they are applicable to the current work arrangements and compliant;
• if you do not have existing employment contracts, consider implementing them for all employees and rolling these out in line with each employee’s wage review; and
• commence reviewing current wage arrangements with employees to determine whether the increase can be absorbed or if the business needs to budget and plan to increase the employees wages.

Reviewing Existing Employment Contracts

The upcoming Decision with its anticipated wage increases provides a good opportunity to review existing employment contracts to ensure they are appropriate for the current work arrangements and compliant. For example, if the business is paying employees above the award rate, consider whether:

• the amount paid to the employee means that they are no worse off compared with their minimum entitlements, including current wage rates and any wage increases (and applicable overtime and penalties in respect of those wages); and
• the contract includes an appropriate offsetting clause, providing that any current or new legal payment entitlements are absorbed in the employees pay.

Employment contracts must comply with the Fair Work Act 2009 (Cth) (Act) and the applicable award.

Employment contracts must not provide less than the employees minimum legal entitlement or unlawfully restrict the employee from benefitting from those entitlements regardless of whether the employee is paid at or above the award rate. For example:

• employees should not be paid below the award rate;
• an employee is entitled to be paid for overtime and penalty rates where applicable. If an employee is paid above the award rate, it is important to keep this in mind, for instance where an employee works on Saturday, the amount they are paid should be suffient to absorb the Saturday penalty rate (and other relevant entitlements). If the employee is paid the award rate, their contract should not restrict or exclude overtime or penalty entitlements they have under the Act and relevant award; and
• employees are entitled to accrue and take annual leave. The contract should not provide for a smaller number of annual leave days than that provided for under the Act or restrict the employee benefitting from that annual leave. An instance where this may occur is if the contract includes a clause allowing the employer not to grant annual leave for any reason (under the Act the employer may not unreasonably withhold annual leave).

Individual liability limited by a scheme approved under the professional standards legislation

Employer Assist can review existing employment contracts and provide members with advice on any amendments required or improvements that can be made.

Implementing New Employment Contracts

If you do not have existing employment contracts, Employer Assist recommends implementing them for all employees. Employer Assist can provide members with template employment contracts tailored to suit any individual requirements and provide advice on rolling these contracts out to new and existing employees.

Our employment contracts include the following key provisions addressing:

• position title, duties and responsibilities;
• the type of employment and hours;
• where applicable, the award and classification level;
• remuneration;
• leave and other entitlements; and
• termination including resignation, redundancy, abandonment and other obligations on termination.

Other employment contract provisions, that can be tailored to address particular circumstances, may also be included in an employment contract, including provisions addressing:

• confidential information;
• intellectual property;
• employee restraints;
• employee compliance with policies and procedures;
• employee compliance with work health and safety obligations; and
• employee warranties, including in relation to information provided, qualifications and authorisations.

Reviewing Wage Arrangement

If the Decision includes an increase to the minimum rates of pay and you are already paying your employee sufficiently above the minimum rate of pay, you may be able to absorb the increase depending on the particular employment arrangements.

If a registered agreement applies to the workplace, you will need to ensure the minimum base rates in the agreement remain at least equal to the base award rates. If not, the agreement rates will need to be increased to at least match the base award rates.

Assistance and Pay Guides

Once the Decision is announced, Employer Assist will prepare updated Vehicle Award and Clerks Award pay guides for members.

HVIA members can also contact Employer Assist for specific advice on whether absorbing an increase is possible based on individual circumstances.

Employer Assist

If you require assistance, contact Employer Assist on (07) 3376 6266 or hvia@employerassist.com.au.

This article is intended for information purposes only and should not be regarded as legal advice. Please contact Employer Assist for advice.