Employment changes affecting Engineers, IT professionals and Scientists

The Professional Employees Award 2020 (the “Award”) covers a broad range of professionals in various industries including engineers, IT professionals working in the IT industry, scientists and more.

On 23 January 2023, the Fair Work Commission (FWC) made the decision to amend the Award to impose new obligations which will significantly change the wages and penalties for professionals under the Award. Since then, the FWC has asked for submissions on the draft determination to vary the Award to be filed by Friday, 10 February 2023. The FWC is currently considering those submissions before issuing a final determination.

1. The Key Changes

The following are the key changes that will most likely come into effect:

1. Ordinary hours of work are to be set at 38 hours per week and the entitlement to be paid overtime, or accrue time off in lieu of overtime, when working more than 38 hours;
2. A penalty rate of 125% for work performed before 6.00am or after 10.00pm on Mondays to Saturdays;
3. A penalty rate of 150% for work performed on Sundays or public holidays; and
4. A requirement that employers keep records of hours worked by employees who qualify for the overtime or penalty rates mentioned above.

The above changes will not apply to the following groups of people:

• Employees in management positions; and
• Employees paid in excess of 25% above the Award minimum rate.

2. Coverage Changes

Another change that the FWC has proposed is the modification of Schedule A of the Award – the classifications part. This arises from a long history of coverage challenges brought to the FWC when trying to apply the “principal purpose” test to determine if an employee who does some management work is excluded from being covered by the Award.

The proposed changes are to provide clear guidance on the circumstances on when employees performing engineering duties, professional scientific duties or IT duties with some management work are covered. They would be covered provided that the employee is not employed in a wholly or principally managerial position.

3. How to prepare for the changes

Businesses should start looking at their own employment arrangements in anticipation of the changes coming into effect.

Firstly, businesses should assess whether the employees covered by the Award are being paid over 25% of the minimum wage rate in the Award or under. If the latter, then the business must prepare to start complying with the obligations listed under the key changes.

Secondly, the business should consider how they structure their employees duties and responsibilities – whether they perform some managerial duties or wholly do it.

If you are unsure as to whether the changes apply to you and/or want to assistance in implementing the changes into your operations, the team at Constructive Legal Solutions can help you in all aspects. Call 1300 972 092 or send your enquiry to admin@constructivelegalsolutions.com.au for tailored advice.