Understanding modern award coverage can be a complex undertaking, even for the most experienced business owner. Modern awards lay out the minimum terms and conditions of employment and cover entitlements such as pay, hours of work, rosters, breaks, allowances, penalty rates and overtime. Modern awards are industry or occupation-based and apply to both employees and employers who perform the particular tasks and duties covered by the award. Seems simple enough, right?

Where it can get especially tricky are instances where employees appear not to be covered by a modern award based on specific qualifications or duties, making it difficult to determine whether or not modern award coverage applies. In recent times, The Fair Work Commission has advocated that many employees who have been paid and treated as non-award employees are, in fact, award-covered employees.

This means that business owners need to be extra vigilant when classifying employees, whether under a modern award or as a non-award employee. In particular, understanding the application of different levels within award classification and how to correctly interpret them.

Case Study

A recent case at the Federal Court – King v Melbourne Vicentre Swimming Club Inc (2021) – involved a former employee who had worked as a swimming coach at a swimming club from August 2006 until May 2018, who claimed to have been underpaid from May 2012 until the end of their employment.

Having been employed award free with an all-inclusive salary from May 2012, the swimming coach argued that the Fitness Industry Award 2010 applied to their employment, or alternatively, the Sporting Organisations Award 2010 or the Miscellaneous Award 2010. The swimming club defended the claim, claiming the former employee was too senior and too qualified to be covered by any of these awards.

The employee reported to the head coach at the swimming club and occasionally acted in that position when the head coach was absent. The employee coached senior and mid-range level ability squads but did not coach the most senior squad. Under the Fitness Industry Award 2010, the highest level for a swim coach is Level 4 and is described as:

“A coach of beginner swimmers, being a holder of a current Bronze Licence for Coaching or equivalent, who has performed 12 hours per year of recognised workshops and 500 hours of coaching beginners, and attended a recognised seminar/conference within the past 12 months; or delivered 700 hours of coaching beginners.”

The former employee held a Silver Licence for Coaching and assisted in coaching senior swimmers including those who competed at state level, arguing that his all-inclusive salary did not compensate him for all entitlements under the relevant award.

At first, the Federal Court agreed that the former employee’s qualifications and duties meant that they were too senior to be covered by the Fitness Industry Award 2010, which it stated would otherwise be the applicable award. However, the former employee appealed to the Full Court of the Federal Court, who ultimately determined that:

  • the Fitness Industry Award 2010 applied to the former swimming coach’s employment;
  • the Level 4 coverage description in the Fitness Industry Award 2010 outlined the minimum requirements, not the highest qualifications, required to be a Level 4, and having higher qualifications did not exclude the former employee from the Level 4 coverage; and
  • the matter would be deferred to the Federal Court to decide the underpayment claim.

Determining the correct award classification for employees isn’t always straight forward, but it is essential to get it right in order to minimise exposure to claims of underpayment. If you need assistance deciphering the complex world of award interpretation, get in touch with our team who can support you to navigate it effectively.

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