Modern Awards are legally binding instruments setting minimum terms and conditions for specific industries or occupations.
Legislation: Fair Work Act 2009 Part 2-3 | Category: Industrial Instruments
What is Modern Awards?
Modern Awards are legally binding instruments that set minimum terms and conditions of employment for specific industries or occupations. There are over 120 Modern Awards, each covering different sectors such as hospitality, retail, manufacturing, professional services, health care, and others. Awards sit above the National Employment Standards and below enterprise agreements in the hierarchy of employment conditions.
Modern Awards cover matters including minimum wages and classifications, hours of work and rostering, penalty rates and overtime, allowances, leave and leave loading, and consultation and dispute resolution procedures. The Fair Work Commission reviews and varies awards periodically, including through the Annual Wage Review.
Key Compliance Points for Employers
- Identifying the correct award and classification is fundamental to compliance
- Some employees may be covered by an occupational award rather than an industry award
- Award rates and conditions change — monitor updates particularly after 1 July each year
- Enterprise agreements can replace awards but must leave employees better off overall
- The Fair Work Ombudsman’s Pay and Conditions Tool (PACT) provides award information
Frequently Asked Questions
How do I find the right award?
Use the Fair Work Ombudsman’s Pay and Conditions Tool (PACT) at fairwork.gov.au. Consider both your industry and the employee’s specific role and duties.
When do award rates change?
Award rates typically increase on 1 July each year following the Annual Wage Review. Some penalty rates may change at other times.
What if we pay above the award?
Paying above award rates is fine. However, you must still comply with all other award conditions unless specifically offset in a documented arrangement.
