4 yearly review of modern awards—Payment of wages

In this matter, the Fair Work Commission (FWC) was asked to review the modern awards that govern the payment of wages. The dispute arose between the applicant, the Fair Work Ombudsman, and the respondents, who included various employers and employer associations. The case was heard in the Fair Work Commission of Australia.

The primary legal issue before the FWC was whether certain payments made to employees should be classified as wages under the modern awards. Specifically, the dispute centred on whether payments made in the form of bonuses, commissions, and allowances were to be considered as part of the ordinary wages. The FWC needed to determine if these payments should be incorporated into the minimum wage rates stipulated in the modern awards.

The FWC examined the definitions and criteria set out in the Fair Work Act 2009 for ordinary wages and the specific provisions in the modern awards. The Commission considered the purpose of the awards, which is to ensure that employees receive fair and reasonable remuneration. In its decision, the FWC held that certain payments, such as commissions and performance bonuses, should be classified as part of the ordinary wages if they are paid regularly and are not dependent on the performance of additional work. The FWC clarified that allowances, such as those for tools or uniform, should not be considered as wages unless they are paid in the absence of the provision of those items. Consequently, the FWC made amendments to the modern awards to reflect these determinations.

The FWC's final orders included the amendment of specific modern awards to ensure that certain payments are appropriately classified as part of the ordinary wages, thereby ensuring that employees receive fair compensation in line with the provisions of the Fair Work Act 2009.