Can an employer pay an award covered employee an annualised salary if the relevant award does not have an applicable annualised salary clause?
The answer to this is essentially ‘yes’, although there will be some additional requirements to take into account.
Some awards, such as the Clerks – Private Sector Award 2010, have annualised salary clauses. These clauses set out specific provisions that must be followed when providing an annualised salary to employees.
Other awards, such as the Manufacturing and Associated Industries and Occupations Award 2010, do not have general annualised salary clauses (although this award does allow annualised salaries for supervisors/trainers/coordinators). However, these awards do have a clause which states that an employer’s monetary obligations under the award may be absorbed into over award payments.
An employer under the Manufacturing and Associated Industries and Occupations Award 2010 could still essentially ‘annualise’ the payment of remuneration to an employee, even for employees other than supervisors/trainers/coordinators.
The employer would do so by inserting an off-setting clause into the employment contract which off-set the remuneration payable under the award through the annualised salary.
However, an employer that was paying an ‘annualised’ salary under the Manufacturing and Associated Industries and Occupations Award 2010 in such circumstances would need to ensure that they continued to meet all award obligations for each relevant pay period.
This would mean, for example, that the employer would need to ensure that the employee had received the minimum amount of remuneration owed within each pay period. This minimum amount may be required to include, for example, the minimum amounts owing for allowances, loadings and overtime penalties within that period.
For assistance with the drafting of off-setting clauses, please contact us or call the Ai Group Workplace Advice Line on 1300 55 66 77 to arrange a referral to the Ai Group Workplace Relations Consulting team.
