See Fair Work Act 2009 s.206
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If an employee is covered by a modern award
The base rate of pay for an employee in an enterprise agreement that applies to the employee cannot be less than the base rate of pay the employee would receive under the modern award which covers the employee.
If the base rate of pay in the enterprise agreement is less than the employee would receive under the modern award that covers the employee, the enterprise agreement will have effect as if the agreement rate were equal to the award rate.[1]
Related information
Example (rate correct as at 1 July 2018)
The rate of pay for an employee engaged as a panel beater under the terms of an enterprise agreement is $827.28 per week.
Under the Vehicle Manufacturing, Repair, Services and Retail Award 2010 [MA000089] the comparable skill level for a panel beater is Vehicle industry RS&R – tradesperson or equivalent Level I R6 – the minimum weekly wage is $837.40.
Therefore, the employee must be paid the $837.40 minimum weekly wage from the modern award, even though the enterprise agreement says the employee should be paid only $827.28 per week.
If an employee is NOT covered by a modern award
If an employee:
- is not covered by a modern award, and
- the national minimum wage order would require the employer to pay the employee a base rate of pay that at least equals a national minimum wage set by the order;
the base rate of pay for the employee in an enterprise agreement that applies to the employee cannot be less than the base rate of pay set by the national minimum wage order.
If the base rate of pay in the enterprise agreement is less than the employee would receive under the national minimum wage order, the enterprise agreement will have effect as if the agreement rate were equal to the rate set out in the minimum wage order which covers the employee.[2]
The National Minimum Wage is available from the Fair Work Ombudsman's website.
References
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[1] Fair Work Act s.206(2); see also Ferrymen Pty Ltd v The Maritime Union of Australia [2013] FWCFB 8025 (Ross J, Booth DP, McKenna C, 17 December 2013) at para. 18.
[2] Fair Work Act s.206(4).