Feds Close-Off BOOT Loophole for Transitioning Awards
You are here:One of the last employer escape paths from the dramatic cost increases under some modern awards has been closed.
The Federal Government (with hardly any publicity) has issued regulations (operative 1 January 2010) that require Fair Work Australia to assess lodged enterprise agreements under the "Better-Off-Overall Test" - BOOT - against award conditions not only as apply at the time of lodgement, but also against the transitioning modern award conditions that will apply on 31 July each year until 2014.
This closed the loophole whereby penalty rates or loadings, and wage rates, under most modern awards, do not apply until 30 June 2010. Instead, the conditions that applied to the employer prior to the introduction of the modern award continue to apply until that date. After 30 June 2010, the new modern award penalty rates, loadings and wage rates will transition in over a 4 year period.
Federal system employers who started a business after the introduction of the previous Work Choices regime have generally been award free prior to the commencement of the modern awards on 1 January 2010 and hence prior to the issuing of these regulations, they would have been able to make an agreement without needing to include the increasing benchmarks of the transitioning awards.
Note that FWA's comparison against the BOOTest is done at the point of lodgement, but includes at that time an assessment against the BOOT as it would apply at the end of July each year during the Transition phase to the modern award. Of course future FWA wage increases would be unknown at the point of lodgement, so the FW Act requires that wage rates under an agreement also must never be less than the modern award rate.
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