FocusOn - Victorian Common Rule Awards

Federal Awards in Victoria

In 1996 Victoria transferred most of its industrial relations powers to the Commonwealth government. This resulted in a system where some employees were under Federal Awards and others were covered by Victorian “safety net” conditions. Federal Awards conferred additional benefits such as leave loading, penalty rates and redundancy pay. Typically larger businesses were named in a Federal Award and their employees received Federal Award conditions, while smaller businesses paid only the safety net entitlements.

The present Victorian government has now passed legislation that increases the scope of the Federal Awards to cover not only businesses named in the awards, but also named job functions. This has resulted in the new Victorian Common Rule Awards.

How Common Rule Awards Work

Awards are made binding by the Australian Industrial Relations Commission (AIRC). In each case a Common Rule Declaration is made after considering the application from a union. The Common Rule Declaration is then binding on all businesses that employ workers in that industry.

The Common Rule Declaration merely states what employees are covered and when the coverage will commence. To find the terms and conditions for that worker it will be necessary to refer to the original Federal Award referred to the Common Rule Declaration. For example, the Clerical & Administrative Employees Victorian Common Rule Award 2005 states that the conditions of the existing Clerical & Administrative Employees (Victoria) Award 1999 is now applicable to all Victorian employees within the specified work types from January 1, 2005.

Implications for Victorian Employers

A large number of applications are before the AIRC and it is likely that Common Rule Awards will soon apply to a large number of Victorian workers. To determine if a Common Rule Award applies in your industry, check the list of awards on the AIRC website.

From January 1, 2005 most administrative & clerical employees are covered by a Common Rule Award. The extended terms and conditions applicable are annual leave loading, overtime, double time for Sundays and a range of allowances. For details, refer to the original Federal Award on the AIRC website or contact Saward Dawson.

Another implication of Common Rule Awards is that the AIRC unfair dismissal jurisdiction applies to employees within the named industries, regardless of their income level. Employees not covered by the Common Rule Awards are excluded from this jurisdiction if their income is greater than $90,500.

Some Federal Awards specify the superannuation fund to which compulsory superannuation contributions must be made. Transitional provisions in the Common Rule Awards allow employers to continue contributing to existing funds.

Avoiding Common Rule Awards

Common Rule Awards have compulsory application for all workers named in the Award, unless a Certified Agreement exists (see below). If the job category is not named in the award and the employer is not otherwise covered by a Federal Award, existing formal or informal employment contracts will continue to apply.

Certified Agreements

Certified Agreements can override a Common Rule Award. These agreements are an Australian Workplace Agreement, a Certified Union Agreement or a Certified Agreement directly with the employees. The former is an individual contract between the employee and employer, the latter are collective agreements between a group of employees and the employer.

Note that all of these are reviewed and certified by the AIRC. Informal and uncertified agreements cannot override a Common Rule Award if the job function is listed in the Common Rule Award.

Certified Agreements are particularly useful where special circumstances exist, for example where work regularly takes place outside normal hours. In these circumstances the individual, group of employees or union can agree with the employer to trade-off award entitlements. For example, regular Sunday penalty rates can be replaced by a higher hourly rate. These agreements are subject to a "no-disadvantage test".

Published : 20 December 2004