Proposed Changes To The Professional Employees Award 2020

The Fair Work Commission (FWC) has proposed changes to the Professional Employees Award 2020 (Award).

The proposed changes impose new obligations on employers to pay ‘overtime’ and penalty rates to employees, clarifies the coverage of the Award and imposes record-keeping obligations in respect of hours worked.

Award Coverage 

Currently, the coverage clause of the Award lacks clarity and does not properly describe job functions at each classification level.

The FWC proposes to amend Schedule A to make clear that the classification definitions apply to all employees performing professional engineering duties, professional scientific duties, professional information technology duties, or quality auditing, unless the person holds a position which is a wholly or principally managerial position.

Hours of Work, Overtime and Penalty Rates

Currently, the Award does not provide for an entitlement to ‘overtime’ for work in excess of 38 hours per week or penalty rates when working unsociable hours. The FWC has proposed changes that:

1. identify the ordinary hours of work as 38 hours per week for the purpose of the minimum annual wages as specified in clause 14 of the Award. Employers can still request employees work reasonable additional hours (overtime), in accordance with s 62 of the Fair Work Act 2009 (Cth);
2. impose a requirement to pay the employee for work performed in excess of 38 hours per week (i.e. overtime) at the minimum rate as specified in the Award. That is, no loading applies to the hourly rate when working ‘overtime’ (subject to point 3 immediately below), however, the employee must now receive, as a minimum, the minimum hourly rate of work for each hour of work in excess of 38 per week.  The Award will also allow for ‘time in lieu of overtime’ arrangements to be agreed. Hours worked will include work on or in connection with call-backs and work performed on electronic devices or otherwise remotely;
3. provide for penalty rates for all hours worked at the direction of the employer (whether ordinary or overtime hours), as follows:

4. Importantly, the requirements identified immediately above at points 2, 3 and 4 will not apply to employees who have a contractual entitlement to an annual salary which exceeds the appropriate minimum annual wage prescribed in clause 14.1 by 25% or more.

Record Keeping

The proposed changes will require employers to keep records of an employee’s hours of work, as follows:

• Hours of work in excess of 38 hours per week;
• Hours of work before 6:00am or after 10:00pm on any day Monday to Saturday;
• Hours of work anytime on Sunday or a public holiday.

This record keeping requirement will also not apply to employees who have a contractual entitlement to an annual salary which exceeds the appropriate minimum annual wage prescribed in clause 14.1 by 25% or more.

How does this impact employers?

The FWC published a draft determination (click link to access) to which parties were invited to provide a submission by 10 February 2023. There is no date announced as to when the proposed changes will take effect.

Employers should review existing arrangements for employees covered by the Award and identify those employees who are in receipt of annual salary who might not be impacted by the proposed changes to penalty or overtime entitlements. Identifying the correct classification of work for the employee will be critical to that exercise.  Consideration should also be given to how records will be practically kept and audited, and what policies or procedures should be developed to cater for time off in lieu.

EMA Legal can assist employers in identifying the impact of these proposed changes, reviewing employment contracts and overtime or time in lieu policies.