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Back pay claim
An important message for incorporated employers which existed prior to 27 March 2006 and who employed an apprentice any time since 1 January 2014.
Why some Queensland apprentices were not covered by the Modern Award commencement from 1 January 2010.
Modern awards commenced from 1 January 2010 and provide minimum award wages across Australia. The new awards replaced the old state award system in Queensland, except for the vast majority of apprentices. It was the policy of the Queensland government to ‘preserve’ the competency-based training and wages system unique to Queensland. This meant Queensland apprentices continued to be paid under the state award system, even though the state wages were less than Modern Awards. Apprentice wages were calculated by the Fair Work Ombudsman (FWO).
These ‘preserved’ state award wages only applied to apprentices engaged by Queensland employers which were incorporated prior to 27 March 2006. Employers incorporated after that date paid their apprentices under the modern awards.
Back pay from 1 January 2014
The Fair Work Commission and Federal Court on appeal in 2017 both determined that the ‘preserved' Queensland wages ceased on 31 December 2013 and the higher Modern Award wages applied from 1 January 2014.
In other words, the underpayments may extend back to 1 January 2014.
Prior to these decisions, the Queensland and Federal Governments had both indicated the preserved wage system for apprentices would apply at least until a reasonable transition to the modern award was identified.
Why the delay?
Master Builders committed considerable resources in supporting the two appeals and since early 2017 has lobbied the federal and state governments to provide a financial package to help employers cover some of the shortfall in wages (as it was not the employers' fault apprentices were underpaid). Up to November 2018 Master Builders believed this assistance was still possible. Unfortunately, neither the federal or state government will make a commitment to give assistance.
Master Builders now formally concludes the process.
It is therefore our advice, (if it’s not yet done) to calculate and provide back pay.
It's important to note the FWO acknowledges it provided incorrect wages advice. It will not prosecute employers to recover back pay for apprentices for time worked prior to 7 February 2017. (This is the date of the first appeal decision by Fair Work Commission).
However, it will provide assistance to employers and apprentices in resolving claims.
Master Builders has historical award wages information for members to calculate whether they have an obligation to adjust back pay. We will also assist with any information or explanation for your apprentices. For example, a draft letter is available for members to consult apprentices.
We can also talk to you about options for a repayment plan if the wages adjustment impose a financial stress on your business.