Emma Watt Workplace Untangler - Our Articles

One of the features of modern awards that is a departure from tradition is the method of setting allowances.  In the past, allowances have generally been expressed in dollar terms in each award, making it easy to work out what to pay just by looking at the relevant clause.

A problem with the old system was that each year when awards were varied to increase wages, dozens of other small variations had to be made to awards to ensure allowances kept pace with wages - and of course, that's just begging for mistakes to be made, and enormous amounts of time were then spent applying to the tribunal for variations, or correction orders.

Modern awards, however, have taken a different approach.  Expense-related allowances are still expressed in dollar terms in each award, for example, each award that provides a motor vehicle allowance expresses the allowance as 74 cents per kilometre.  For all other allowances, the rate is expressed as a percentage of the 'standard rate'.

In the Timber Industry Award 2010:

A leading hand supervising two to six employees will be paid 3.3% of the standard rate and for more than six employees 5.1% of the standard rate in addition to their ordinary rate of pay.

In order to determine what that means in dollar terms, i.e. what an employer actually has to pay a leading hand per week, first we must turn to the definitions in the award.  We then find that:

standard rate means the minimum weekly wage for a Level 5 in Clause 17 - Minimum wages

From the first pay period commencing on or after 1 July 2011, the minimum weekly wage for a Level 5 in this award is $686.20.  That means that a leading hand supervising 2-6 employees is entitled to an extra 3.3% of $686.20, or $22.64 per week, while a leading hand supervising more than 6 employees gets 5.1% of $686.20, or $35.00 per week on top of his or her wages.

Anyone working out allowances must ensure they actually check the definition of 'standard rate' in the relevant modern award when working out allowances.  Not all 'standard rates' are created equal - some are more equal than others ... sorry, off the track there!

In the Manufacturing and Associated Industries and Occupations Award 2010, the definition is:

standard rate means the minimum hourly wage prescribed for the C10 level in clause 24.1(a)

The minimum hourly wage for C10 is $18.06.  Therefore, under this award, a leading hand in charge of 3-10 employees must be paid 166.3% of $18.06, or $30.03 each week.

Too easy ... right?