This ruling serves as a warning to employers coming to grips with the Modern Awards process.
Susan Balog, a Victorian single mother, whose pay was cut by $6.72 an hour when her pay was shifted to a 'modern award' at the start of the year is the first person in Australia to get a “take home pay order”. Take-home pay orders were introduced as part of the Labor Government's Fair Work industrial relations regime.
While the Modern Awards, which came into effect on January 1, resulted in pay rates falling in some states, employers were not allowed to pay employees less than there were receiving under their previous award. If this occurred, Fair Work Australia could make a take-home pay order and effectively top-up the worker's pay.
Under the new Modern Award, Balog's hourly rate fell from $19.83 to $16.47. When a 200 per cent loading for Sunday work was taken into account, take-home hourly rate fell from $39.66 to $32.94.
While the employer said it was simply complying with the new Award, and had offered to give Balog more hours to make up for her lower pay, Senior Deputy President Kaufman stated in his judgement:
"While I accept that the employer did not wish to decrease the applicant's take-home pay, and thus offered her additional hours, I do not accept that the offer is acceptable as an alternative to a take-home pay order. The employer, in essence, is seeking that the employee work more hours for less pay."
While lower pay rates under the Modern Wards can be applied to new employees, existing employees must not be left worse off.
For more information on Modern Awards and Take Home Pay visit the Fair Work Australia site
To faciliate with the consistent application of an organisation's business rules and award payments, Mitrefinch's leading Time and Attendance System, TMS, comes with an extremely powerful “award interpreter”. To find out more contact Mitrefinch Sales on 1300 884 831 or email sales@mitrefinch.com.au
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