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COVID-19 changes: Restaurant Award and Hospitality Award

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The Fair Work Commission has made temporary changes to the Restaurant Award and Hospitality Award to manage the impact of the pandemic on employers and workers. It’s crucial you know what these changes are because they have payroll implications.

Broadly, these award changes aim to boost operational flexibility for businesses and help them remain financially viable. They also support the implementation of the JobKeeper Scheme — a federal government program designed to keep as many Australian workers in their jobs as possible.

Amendments made to the Restaurant Award and Hospitality Award are largely similar. Below is a summary of the key changes.

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The Hospitality Award changes commenced on 24 March 2020 while the Restaurant Award changes began on 31 March 2020; they will run through to 30 June 2020 for both awards, though the Commission may extend the time period if necessary.

Performing different duties

One of the main changes for both awards involves the power of employers to instruct employees to perform duties outside their classification level or normal work. This is permitted as long as the task is safe, and the employee has the skills, competencies, licenses and qualifications required.

To protect employees, those who are asked to perform a higher level duty for less than two hours must be compensated at an appropriately higher rate for the hours they worked. If they are performing a higher level duty for more than two hours, then they should be paid a higher rate for the whole day.

For further protection, employees carrying out lower level duties compared to their usual work must be compensated at their ordinary rate.

Reducing work hours

Another major change is the employer’s ability to reduce work hours of permanent full-time and part-time employees. Provided the employer follows award consultation rules for hours of work and roster changes, and discuss their plans with the employees’ union (if affected employees are union members), the employer can:

  • Reduce full-time employee work hours to between 22.8 and 38 ordinary hours; and
  • Ask part-timers to work between 60 percent to 100 percent of their guaranteed hours per week or over the roster cycle.

It’s worth noting that employees who are working reduced hours will continue to accrue and take leave based on their ordinary work hours. So, if an employee takes sick leave for a week while reduced hours are in place, they’ll be paid their ordinary hours for the time they are away. The Fair Work website provides examples of how this works under the Hospitality Award and Restaurant Award changes.

Taking annual leave

Under the Fair Work Act amendments for both awards, employers can instruct employees to take annual leave if they give at least 24 hours’ notice, and have considered the employee’s personal situation.

Workers can also take twice the amount of annual leave at half pay by mutual agreement with their employer. In practice, this means if an employee takes one week of annual leave over two weeks, their pay over the two-week period would be the same as their pay over a one-week period. However, only one week would be deducted from their annual leave balance.

Temporary business closure: Restaurant Award

Finally, changes under the Restaurant Award allow employers to direct workers to take annual leave if the business is closing for a period due to the coronavirus. The employer should give at least a week’s notice, or less by mutual agreement.

If the employee’s paid leave balance is insufficient to cover the period of closure, then the employer can ask them to utilise their paid leave first then take unpaid leave. Note the period of unpaid leave counts as service for entitlements.

Australian businesses and their workforce will continue to adapt as the pandemic progresses. It’s vital to monitor changes to workplace regulations to ensure your business operates within new rules and remain compliant with its payroll practices.

Watch our virtual event: ‘Leading through the COVID-19 crisis’

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  • Cindy Nicholson, CEO, Braintree
  • Mark Chapman, Tax Communications Director, H&R Block
  • Danielle Wood, Program Director, Grattan Institute
  • Kerry Agiasotis, MD & EVP APAC, Sage
  • Mark Jones, Chief Storyteller & CEO, Filtered Media (Host)
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