The Fair Work Commission has announced changes to the Building and Construction General On-Site Award (Award) that took effect from 1 July 2020. Here, Morrissey Law + Advisory provide a brief snapshot of the changes for both employers and employees within the construction industry.
A copy of the Award can be accessed here.
What are awards?
Briefly, awards set out the minimum terms and conditions of employment that are on top of the National Employment Standards and deal with matters such as pay, hours of work, rosters, breaks, allowances and penalty rates.
Awards apply to all employees that are covered by the national workplace relation system but do not apply to:
- Employees with no industry or occupational coverage;
- Employees who earn above the high-income threshold; and
- Those covered by registered agreements.
In the residential construction industry, the main coverage for construction-related work is:
- Building and Construction General On-site Award 2010;
- Joinery Building Trades Award 2010; or
- Timber Industry Award 2010.
Key changes to the Building and Construction General On-Site Award
1. Industry Allowance
There is now an enhanced and single industry allowance, it is a less complex method and in most cases, employers are not required to pay allowance based on the type of work the employee is doing.
The Industry allowance will depend on the industry sector that the employer operates and the applicable rate for:
- Residential Building and Construction Industry is 4.8% of the weekly standard rate; and
- All other industry (general building and construction, civil construction and metal and engineering construction) is 6% of the weekly standard rate.
If works undertaken are between both industry, the allowance can apply on a per-job basis or the employer can apply the higher allowance.
Please note there may be additional allowances that remain payable under the Award.
2. Rostered Days Off (RDO)
Three options have been provided under the Award for RDOs:
- Option 1: employees take an RDO during a 20 day, four-week cycle where all employees will take an RDO in accordance with written roster fixed by the employer and issued 7 days before the commandment of the cycle.
- Option 2: employees take their RDOs on different but fixed days this would be for a 20 day, four-week cycle where employees will that their RDOs on different days in accordance with a written roster fixed by the employer and issued at least 7 days before the commencement of that cycle.
- Option 3: by any other method that is agreed between the employer and the majority of the employees that is recorded in writing.
The Award also now allows for RDOs to be banked but it must not exceed 5 days at any given time and the RDO must be taken on a day mutually agreed between the parties. The employer must maintain records of the number of RDOs banked and when that RDO was taken.
An employee can be required to work on a RDO if the employee was provided with at least 48 hours’ notice and they will still accrue the RDO day and will be entitled to be paid Saturday rates.
On termination, the accrued RDOs will be paid out and part-time employees will accrue RDO entitlements on a pro-rata basis where agreed.
3. Travelling time entitlements
Under the Award, employees must ‘start and finish work on a construction site, or an open yard where prefabrication works are performed and then are required to erect or fix on-site.’
If the employee satisfies the above requirement, they will be entitled to an allowance of $17.43 per day.
However, this entitlement is not payable where the employee:
- has been provided with a fully maintained vehicle;
- is on annual leave or a RDO;
- has been offered or provided with transport free of charge to and from the employee’s home (offered or provided by the employer); or
- has a fixed location for starting work which is not on a construction site or an open yard.
4. Time off instead of payment for overtime
Employees will be entitled to time off instead of payment for overtime if it is agreed between the parties, however, this agreement must be in writing and a new agreement must be prepared for each occasion.
The agreement must have:
- The number of overtime hours and when those hours were worked;
- That the parties agree for time off to be provided instead of payment for overtime;
- If the employee requests, the employer must pay the employee for the overtime covered by the agreement at the overtime rate when the overtime was worked;
- The above payment will be made in the next pay cycle.
The period of time off must the same as the number of overtime worked and the time off must be taken within 6 months of when the overtime was worked or any time within the 6 months as agreed.
If the employee is terminated, they are entitled to be paid for the overtime worked. The employer must maintain records for 7 years and ensure that any agreements entered into were freely entered into with no undue pressure or influence.
This does not apply to casual or daily hire employees.
In additional to the above, a number of provisions have been simplified and redrafted including the entitlement to tool allowance, annual leave loading and living away from home and the ordinary hours of work for part-time and casual employees.
Employers should familiarise themselves with the proposed changes and ensure that their employees are paid correctly and in line with the Award.
For more information on how this may affect you or if you require any assistance in relation to your employee entitlements, please do not hesitate to contact Morrissey Law + Advisory.
Disclaimer: This publication by Morrissey Law & Advisory is for general information and commentary only and should not be considered or relied upon as legal advice. Formal legal advice should be sought in relation to any matters or transactions that may arise in relation with communication.