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Special counsel, Matthew Lilly, and lawyer, Kimberly Jones, from the HHG Legal Group Agribusiness team discuss the changes to the Horticulture Award.
Many employees in the horticulture industry are paid on a piece rate basis, which means that their pay is determined by the amount of produce harvested. The Horticulture Award establishes minimum pay rates, and other entitlements, but until last month, this Award did not require employees to be paid a minimum daily wage. Due to changes to the Award, pieceworkers are now guaranteed a minimum wage.
The Australian Workers' Union (AWU) filed an application with the Fair Work Commission in December 2020, seeking to amend the Horticulture Award 2020, to include a minimum wage guarantee. After numerous submissions from interested parties, the application was heard in July 2021.
According to the AWU's submissions to the Commission, there was evidence of widespread violations of the piece rate provisions, such as setting rates too low (which violated the Horticulture Award).
The AWU also submitted:
The submissions, listed above, show problems with the current piece rate system's implementation, rather than the system itself.
Opponents of the changes, including the Australian Fresh Produce Alliance (AFPA) and the National Farmers' Federation (NFF), argued that:
Despite industry opposition, the Commission decided to make changes to the Award in accordance with the AWU's application, including a minimum wage floor, and associated time recording provisions.
The changes continue to allow high-performing workers to be incentivised by the piece rate, while also attempting to ensure that workers earn at least the minimum wage.
An employee covered by the Horticulture Award may be paid:
Employees who are paid on a piece rate, whether full-time, part-time, or casual, now have a minimum wage guarantee.
The worker must be paid at least the 'hourly rate for the pieceworker' multiplied by the number of hours worked on that day for each day that he or she works. The applicable hourly rate is specified in the Award. Casual employees are subject to a 25% casual loading.
If a pieceworker earns more than the minimum wage guarantee for a day's work under the piece rate, they must be paid the difference.
Because of the changes, producers who use piece rates may need to rethink their hiring, supervision, performance, and termination procedures. This should be done while keeping the Award and other Fair Work Act provisions in mind.
The Award was also changed to make the record-keeping requirements more stringent. Piecework records replaced the previous 'piecework agreements' under the Award, as of 28 April 2022. Piecework records must include the following information:
The Horticulture Showcase provides information and resources, including record keeping templates, to assist employers and workers in the industry: https://horticulture.fairwork.gov.au/pay-and-piece-rates#minimum-wage
If you have any questions and require assistance regarding the changes to the Award, please do not hesitate to contact our Employment or Agribusiness lawyers on (08) 9322 1966 or email reception@hhg.com.au.
By Kimberly Jones, Lawyer and Matthew Lilly, Special Counsel
This is branded content for HHG Legal Group.