Professionals Australia wins additional overtime and penalty rate provisions for professional employees
Following strong submissions and evidence presented by Professionals Australia to the Fair Work Commission, employees covered by the Professional Employees Award will have new and enforceable entitlements to the payment of overtime and penalty rates.
This is a significant decision for professional employees covered by the award, including engineers in the construction industry, consulting engineers, engineers in manufacturing, mining engineers, scientists, IT professionals, and professional employees in the game development sector.
In its 20 January 2023 decision on this matter, the FWC determined:
- an employee is to be paid the appropriate hourly rate for all hours worked in excess of 38 in a week, including work on or in connection with call-backs and work performed on electronic devices or remotely.
- a penalty rate of 125% shall apply to all hours worked (whether ordinary or overtime hours) before 6.00 am or after 10.00 pm on any day Monday to Saturday. For casual employees, this is in addition to their casual loading.
- a penalty rate of 150% shall be payable for rostered hours (whether ordinary or overtime hours) worked on a Sunday or public holiday. Again, for casual employees, this is in addition to their casual loading.
- a provision for time off in lieu for additional hours that are worked when there is an agreement between an employer and an employee.
However, these requirements will not apply in respect of employees covered by the Award who have a contractual entitlement to an annual salary that is 25% or more in excess of the minimum annual Award wage for the appropriate classification.
Professionals Australia told the FWC that the hours of employment and overtime provisions of the Award failed to provide a fair and relevant safety net and sought variations to these provisions, arguing that the existing overtime, call-backs, remote support and working shifts in clause 13 of the Award were vague, uncertain, and unenforceable.
Based on Professionals Australia’s evidence, the FWC found that, engineers, scientists, IT professionals and game workers are consistently working more than 38 hours per week, are usually paid an annual salary that is meant to cover all hours of work, often do not have fixed hours of work, are not usually paid overtime for work in excess of 38 hours per week, and only rarely receive time off for extra hours worked.
While the FWC found that many professional employees are paid above the minimum award pay, it recognised there is a minority particularly at lower classification levels of the award who are not compensated for all hours worked.
The FWC affirmed that rates of compensation for additional and unsociable hours for full-time employees covered by the Award are necessary to establish a fair and relevant safety net.
It also decided on new record keeping obligations for employers relating to overtime and unsociable hours of work.
The decision also provided additional guidance on coverage of employees performing managerial duties. The FWC held that the Award should cover all employees who perform professional engineering, scientific, IT, or quality auditing duties unless the person holds a position which is principally managerial in nature.
The FWC has issued draft amendments to the Award and asked parties to file submissions in response to the proposed amendments by 10 February 2023.
Professionals Australia will convene an information session for members about the award variations once they are finalised.
Further information including the FWC decision, draft determination and submissions of interested parties can be found here
Lines attributable to Professionals Australia CEO Jill McCabe
“Professionals Australia has achieved an important victory in the Fair Work Commission, winning a new and enforceable entitlement to pay overtime and penalty rates for engineers, scientists, IT workers and game developers covered by the Professional Employees Award.
“The Fair Work Commission’s decision now means professional employees who are reliant on the minimum award rates will be properly compensated for overtime during early mornings, late nights and over the weekend. “
“Importantly, these new entitlements will apply unless an employee receives a salary over 25 per cent higher than the relevant minimum Award wage, meaning the lower income earners, such as graduates or professionals on moderate salaries, will be the biggest beneficiaries of these changes.”