A legislative bungle around award rates has led to employers facing the prospect of backpaying employees as much as $70 million, following a decision by the industrial relations umpire.
The Fair Work Commission has dismissed an appeal by All Trades Queensland against a ruling last year, which found that the Queensland state award for apprentices should not have taken precedent over the national award.
The national modern award pays almost $4 an hour – or 44 per cent – more than the relevant Queensland award.
According to All Trades Queensland’s website, it is the largest commercial employer of apprentices and trainees in Australia.
“We have proudly contributed to over 20,000 career commencements and career enhancement opportunities in over 8,000 Queensland businesses,” it states.
Workplace relations advisory Employsure said the verdict has far-reaching consequences for businesses and industries, not just in Queensland but for all those relying on the awards system as a guide for how to remunerate workers.
“This is equally unfair for employers who were paying in line with the state award. If the regulator got it right from the start, small business operators wouldn’t have to potentially dig deep before Christmas. Small business operators don’t have buckets of cash for back payments,” said Josh Vikis, senior employment relations adviser at Employsure.
“This can spell disaster for small businesses affected in Queensland.
“If the ATO said your tax bracket was set at a certain amount then decided years later that they made an error, why should you be expected to back pay? Why should small business operators be required to rectify an error that was out of their control?”
Mr Vikis added that “every Queensland employer with apprentices in their business has been led to get it wrong,” and this situation clearly highlights the difficulties employers face in navigating Australia’s industrial relations system.
“The complexity of the system makes it unworkable. You have teams of lawyers and unions arguing over workplace law – and even they don’t understand,” he said.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.