The Australian workforce is set to see significant changes in 2025, with updates to pay rates and classification rules under 37 modern awards. These changes, effective from January 1, are poised to impact employees and employers across various industries, making it essential to understand what lies ahead.
Key Updates to Pay Rates and Rules
- Revised Pay Rates Starting in January 2025, pay rates for employees under 37 modern awards will be updated. These revisions are part of the Fair Work Commission’s ongoing efforts to ensure that wages remain fair and competitive. While specific details of the new rates vary by award, affected employees can expect adjustments designed to better align with economic conditions and industry standards.
Employers should review the new pay schedules as soon as they are released to ensure compliance and budget appropriately for the changes.
- New Rules on Lowest Classification Levels In addition to updated pay rates, new rules will limit the length of time employees can remain at the lowest classification level within modern awards. These changes aim to:
- Encourage career progression and skill development.
- Prevent workers from stagnating in entry-level roles.
- Promote fairness and equitable opportunities across industries.
For employees, this means a clearer path to advancement and, potentially, higher earnings. For employers, it underscores the importance of providing training and development opportunities to support career growth.
Which Modern Awards Are Affected?
The 37 modern awards subject to these changes cover a wide range of industries, including hospitality, retail, healthcare, construction, and more. To determine if your workplace is impacted, refer to the Fair Work Commission’s official list of updated awards. https://www.fairwork.gov.au/pay-and-wages/minimum-wages/pay-guides
What Employers Need to Do
Employers should take proactive steps to prepare for these changes:
- Review the Updated Awards Familiarise yourself with the specific updates to the awards relevant to your industry. The Fair Work Commission will provide detailed documentation to guide you.
- Adjust Payroll Systems Ensure your payroll systems are updated to reflect the new pay rates starting January 2025. Failing to comply with the revised rates could result in penalties.
- Communicate with Staff Keep your employees informed about the changes, particularly if they’re directly affected by the new rules on classification levels. Transparency fosters trust and helps maintain morale.
- Invest in Employee Development With the new rules encouraging progression beyond entry-level roles, consider implementing training programs or development initiatives to support employee growth.
What Employees Need to Know
For employees, these changes present opportunities for:
- Fairer Pay: Updated rates mean your compensation may better reflect your contributions and industry standards.
- Career Progression: The new classification rules could fast-track your advancement to higher roles, particularly if you take advantage of available training and development resources.
Hotel Operators Fined Over $100,000 for Widespread Underpayment of Staff
A landmark case in regional Victoria has resulted in penalties exceeding $100,000 for hotel and café operators who underpaid nearly 100 workers a total of more than $320,000. The penalties were handed down by the Federal Circuit and Family Court, highlighting serious breaches of workplace laws.
Details of the Penalties
The operators, a married couple, were fined $95,000 and $9,000 respectively for their roles in the underpayments. Their businesses, a hotel and café located in Daylesford, employed 97 staff who were underpaid between May 2017 and July 2019.
The court found that the operators not only underpaid wages but also required two international cooks to work excessive hours, breaching workplace legislation. These cooks, both on regional visas, were subjected to unreasonable workloads, with one working up to 74 hours in a single week.
Impacted Workers
The underpaid employees included young workers aged 15 to 20, as well as migrant workers from countries such as Nepal, Pakistan, and Armenia. Some were underpaid over $20,000 each, with significant sums owed to the two cooks who were required to work extended hours. These cooks were underpaid $48,516 and $32,815, respectively.
Many casual employees were also denied entitlements such as casual loading, penalty rates, and overtime pay. The court noted that the underpayments violated the Hospitality Industry (General) Award 2010.
Court’s Findings
The judge described the underpayments as deliberate and noted the severe impact on the workers, particularly the two international cooks who suffered health and safety consequences. One cook lost a significant amount of weight and was hospitalised during their employment.
The court emphasised the need for penalties to deter similar conduct, citing the importance of compliance with workplace laws and the negative publicity that accompanies such breaches. While the operators admitted their wrongdoing, the court noted that these admissions were not made promptly.
Fair Work Ombudsman’s Response
The Fair Work Ombudsman welcomed the penalties, describing the conduct as alarming. “Exploitation of young and migrant workers is particularly concerning,” a spokesperson said. “These penalties send a clear message that deliberate underpayment will be met with enforcement action.”
The Ombudsman has encouraged all workers, including visa holders, to seek assistance if they believe they are not receiving their lawful entitlements.
Broader Context
This case is part of a broader crackdown on workplace exploitation. The Fair Work Ombudsman has filed numerous litigations involving visa holders and secured millions in penalties over recent years. Resources and protections for workers, including visa holders, have been strengthened through government initiatives aimed at addressing exploitation.
Lessons for Employers
This case underscores the importance of adhering to workplace laws and ensuring fair treatment for all employees. Employers are urged to familiarise themselves with award requirements, provide adequate pay and conditions, and ensure that any breaches are rectified promptly to avoid significant penalties and reputational damage.
Return-to-Work Dispute Highlights Workplace Conduct and Constructive Dismissal
The Fair Work Commission (FWC) recently addressed a significant case under section 365 of the Fair Work Act 2009, involving a worker who alleged she was compelled to resign after returning from maternity leave. This case has sparked interest as it tested the boundaries of workplace conduct and constructive dismissal under Australian workplace laws.
Allegations of Constructive Dismissal
The worker claimed that her employer failed to reinstate her to her pre-maternity leave role, creating a work environment that left her no choice but to resign. Central to the case was whether this resignation qualified as a dismissal under section 386 of the Fair Work Act 2009. While the employer contended that the resignation was voluntary, the worker’s allegations brought attention to issues surrounding return-to-work management and workplace conduct.
The Worker’s Role and Return-to-Work Challenges
Initially employed as a part-time administration officer in September 2021, the worker transitioned to full-time in March 2022. After taking parental leave in April 2023, she returned in January 2024, first on a full-time basis and later part-time, working five days per fortnight.
The worker asserted that her employer failed to provide adequate resources upon her return. However, the Commission determined that these claims were overstated, noting evidence that she had access to a shared office, a desk, and was the only employee with a laptop. Additionally, a new director who had joined during her leave had not formally discussed her return-to-work arrangements, with informal discussions taking place at a Christmas party.
Conflict Escalates in the Workplace
A pivotal incident occurred on 19 February 2024, when the worker covered another employee’s shift under extreme heat conditions with inadequate office cooling. The situation escalated into a confrontation when the director raised concerns about a prior early departure by the worker.
The FWC’s findings highlighted that both parties engaged in inappropriate workplace behaviour during the confrontation. The Commission stated: “It was appropriate for management to ask [the worker] about why she had left earlier on a prior occasion. While [the director] raised his voice when [the worker] had also done so, it cannot be said that he questioned her with the intention of making her resign.”
Controversial Comments and Formal Warnings
The tension further escalated during a meeting on 20 February 2024, where the director commented that the worker had “the biggest cajones in the company.” While the Commission acknowledged the comment was inappropriate, it concluded that the intent was related to her workplace role rather than to force her resignation.
On 23 February 2024, the worker received a formal written warning for three policy breaches. She last attended work on 7 March 2024, taking carer’s leave before officially resigning on 23 May 2024.
Was the Resignation a Dismissal?
The FWC analysed whether the resignation constituted constructive dismissal under section 386(1)(b) of the Fair Work Act 2009. This required evidence that the employer’s actions left the worker with no effective choice but to resign.
In its ruling, the Commission dismissed the worker’s claim, stating: “While [the employer’s] conduct was unsatisfactory, it was not conduct intended to force [the worker] to resign, nor did it leave [the worker] with no choice but to resign.”
Importance of HR Support
The case underscored the need for better human resources support, particularly for small employers managing employees returning from parental leave. The Commission noted: “This is a case in which [the employer] needed better human resources support. None of those failings, however, lead me to conclude that [the worker] was forced to resign.”
Key Takeaways for Employers
This case serves as a reminder for employers to:
- Formalise Return-to-Work Arrangements: Ensure clear communication and planning for employees returning from parental leave.
- Provide Adequate Resources: Meet all resource requirements to avoid claims of insufficient support.
- Handle Workplace Conflicts Appropriately: Address incidents professionally to minimise escalation.
- Invest in HR Support: Equip managers with the tools and knowledge needed to comply with workplace laws.
Season’s Greetings from Liquid HR!
As the holiday season approaches, we would like to take a moment to reflect on the year gone by and express our heartfelt gratitude to you, our valued clients. Your trust and partnership have been the cornerstone of our success, and we are truly thankful for the opportunity to support your business and team.
2024 has been a year of growth, innovation, and shared achievements. Together, we have navigated changes in workplace legislation, tackled complex HR challenges, and celebrated milestones. It has been a privilege to be part of your journey.
As we look forward to 2025, we remain committed to delivering tailored HR solutions that empower your organisation and foster a thriving workplace culture. Whether it’s navigating new regulations, enhancing employee engagement, or building your people for success, we’re here to support you every step of the way.
This festive season, we hope you find time to relax, recharge, and celebrate with your loved ones. May your holidays be filled with joy, peace, and plenty of good cheer.
Thank you for choosing Liquid HR. We look forward to continuing our partnership in the new year.
Warm wishes for a Merry Christmas and a prosperous New Year!
The Liquid HR Team
Liquid HR is a leading HR consulting firm helping businesses of all sizes to navigate the complexities of human resource management, while providing tailored HR services based on their unique requirements, including HR Outsourcing, Recruitment and HR Advisory Services.
With offices in Melbourne, Sydney and Brisbane, we work with businesses across Australia.
For more information, please contact us on 1300 887 458 and speak with one of our HR Consultants.