In the Fast Food sector, the payment of wages and entitlements is governed by the “Fast Food Industry Award”. Known as a “modern award” this set of binding rules covers businesses and their employees. Compliance with the award and getting it right is not only the law, it is smart business practice.
For employers and employees, the modern award system plays an important role in setting out the basic obligations and entitlements of employees in the work context. The modern award system is meant to provide businesses with guard rails for how they deal with and pay their staff in return for the services those employees provide to their business.
What Is A Modern Award
- Rates of pay (ordinarily set out by skill level);
- Overtime and penalty rates;
- Hours of work and rostering;
- Industry allowances;
- Leave; and
- Breaks.
The Fast Food Industry Award
The Fast Food Industry Award 2020 (“Award”) covers employers in the fast food industry which broadly encompasses those business taking orders for, preparing, selling and delivering fast food (mainly take-away). Under the Award, the concept of fast foods means meals, snacks and beverages:
- To be consumed away from the point of sale;
- Packaged in a way that customers can choose to take them somewhere else to consume;
- Sold in food courts, shopping centres and retail complexes; and
- Prepared and sold by the business and delivered by a third party.
The types of employees covered by the Fast Food Award include:
- Employees taking orders (including via an app), cooking and selling fast food;
- Baristas (in fast food shops or take-away cafes);
- Delivery drivers;
- Supervisors of these employees;
- Employees in charge of a fast food / take-away shop or outlet; and
- Cafes where the main food or drink is sold (and packaged) for take-away.
Key Issues in the Fast Food Sector
The Fast Food Industry Award is complex and lengthy which can make it challenging for an employer to understand what their obligations are. One of the most difficult things to get right is an employee’s wages and entitlements.
The Fast Food Industry Award sets out various classifications of employment, some with different levels within that classification. Each classification has a different minimum hourly rate and typically depends upon the qualifications and nature of the work undertaken by the employee. Details of these are described in a schedule at the end of the Award. The minimum wage for each classification ordinarily increases each financial year.
In addition to wages, employees may be entitled to payment of various allowances. There are a number of allowances which may apply. These may be payable hourly, weekly or only in circumstances where and employee conducts certain work or takes on certain responsibilities.
The Fast Food Industry Award
It is essential that both employees and employers know which Modern Award applies to their employees and keep up to date with any changes to the applicable Modern Award, for example to ensure minimum wage requirements are being met and ensuring casual employees are offered casual conversion.
Failure to comply with a Modern Award can result in substantial penalties for the employer and their key management as well as a liability to their employee (for example payment of back pay for underpayment of wages).
Given that the cost of an investigation and potential for penalties for non compliance can be extensive, employers are encouraged to obtain advice on their Modern Award and assistance in ensuring compliance. Investing in proper advice and assistance early in the piece can save time, resources and money in the future.