From 1 July 2020, the “reach” of the Miscellaneous Award 2010 will be significantly extended to cover many employees who were previously deemed to be awardfree, following a recent decision of the Fair Work Commission.
The changes mean that any employee who is not covered by another industry or occupational modern award can now potentially come within the reach of the Miscellaneous Award.
This is subject to a number of important exceptions:
 Firstly, the Award still lists an exclusion for “managerial employees” (i.e. those in senior positions in a business). Moreover, given the highest classification under the Miscellaneous Award is someone with “advanced trade qualifications”, the award is unlikely to extend to an employee who requires a degree-level qualification to perform their role.
 Secondly, the Award still indicates that it does not apply to “professional employees such as accountants and finance, marketing, legal, human resources, public relations and information technology specialists“.

How will this operate in practice?

Prior to these changes coming into effect, the Award operated so that an employee working in an industry with award coverage, but with no classification for their particular role, was considered award-free. The new changes mean that this will no longer be the case.

In its decision, the Fair Work Commission illustrated the effect of the changes by referencing a cleaner not covered by the Cleaning Services Award 2010 (because the Award is limited in coverage to employers who carry out cleaning under a contract with another business) and a security guard not covered by the Security Services Industry Award 2010 (because coverage of that Award is limited to employers who carry out security under a contract with another business).
Previously, a cleaner employed by a business covered (for example) by the Real Estate Industry Award 2010 (which has no coverage for cleaners), or a security guard employed by (for example) an employer covered by the Building and Construction General (On-site) Award 2010 (which has no coverage for security guards) could not be covered by the Miscellaneous Award. As of 1 July 2020, such employees now will be covered by the Miscellaneous Award.

Will this affect me?

If, as a business, you have employees that you are treating as award-free, then unless those employees are in managerial roles or are working in a “professional” role (e.g. accountants and finance, marketing, legal, human resources, public relations and information technology specialists, etc) it will be vital to consider whether they are now covered by the Miscellaneous Award 2010 as of 1 July 2020.

If they are, then you will need to ensure that you are complying with the terms of the Award, in particular the minimum wages, overtime rates, weekend penalty rates and allowances that are stated in the Award.
Are high income employees covered by an award? Awards do not apply to high income employees. A high-income employee is an employee who:  has accepted a written guarantee of annual earnings;  is guaranteed to earn an annual amount which is more than the high income threshold. The highincome threshold changes each year. From 1 July 2020, it is $153,600.

To calculate an employee’s earnings to see if they meet the threshold, include:

 the employee’s wages;  the agreed value of non-monetary benefits.

When calculating an employee’s earnings to see if they meet the threshold do not include:

 payments which cannot be calculated in advance such as:  commissions;  incentive-based payments and bonuses;  overtime (unless the overtime is guaranteed);  reimbursements;  statutory superannuation contributions.

What should I do if an employee is still award free?
Although most employees are covered by an award or registered agreement, a few roles and industries are not. When an employee is not covered by an award or agreement they are considered to be award and agreement free. Award and agreement free employees may, and we recommend they do have, an employment contract. They are also entitled to at least the:
 National Minimum Wage; and  National Employment Standards (NES).

If an employee is award free, we strongly recommend that they have an Employment Contract. This not only provides transparency around employee’s terms and conditions associated with their employment, it also protects the company and will make it easier to resolve issues including performance management.