Award-free employees are workers not covered by any Modern Award in Australia, including senior managers and high-income earners with guarantee of annual earnings.
Legislation: Fair Work Act 2009 | Category: Industrial Instruments
What is Award-Free Employees?
Award-free employees are workers who are not covered by any Modern Award. This includes employees whose work is not within the coverage of any award, senior managers and executives with significant decision-making authority, and employees earning above the high income threshold who have provided a guarantee of annual earnings.
While award-free employees are not entitled to award conditions, they remain covered by the National Employment Standards (NES), which provides the minimum safety net of 11 employment conditions that cannot be removed or reduced by any contract.
Key Compliance Points for Employers
- Award-free employees must still receive NES entitlements including leave, notice periods, and redundancy pay
- The high income threshold for 2024-25 is $175,000 per annum
- A guarantee of annual earnings must be genuinely negotiated and documented
- Just because an employee is paid above award rates does not make them award-free — coverage depends on role classification
- Misclassifying employees as award-free is a compliance risk
Frequently Asked Questions
What is Award-Free Employees?
Award-free employees are workers not covered by any Modern Award in Australia, including senior managers and high-income earners with guarantee of annual earnings.
Why is Award-Free Employees important for employers?
Understanding award-free employees helps employers comply with Australian employment law, avoid penalties, and maintain fair workplace practices.
