Please note: This article is intended to be brief information only and should not be relied or acted upon as legal advice. You should always seek legal advice tailored to your own individual circumstances. Please also note that this article is current as at the date of publication and the law may have subsequently changed since.

National vs State system employers

This article addresses issues concerning the employment of employees in the horticulture industry in Western Australia by “national system employers” under the Fair Work Act 2009 (Cth) (Act).

Please be aware that some employees in Western Australia (ordinarily those employed by sole traders, partnerships and non-trading corporations) are employed by “state system employers”, being employers covered by the state industrial relations system under the Industrial Relations Act 1979 (WA).

If you are not sure whether an entity is a national or state system employer, you should seek legal advice.

What are “pieceworkers”?

Pieceworkers are employees who are paid a “piece rate”. A “piece rate” is where an employee gets paid by piece of work they do (such as a fixed rate for each piece of fruit picked), rather than based on the amount of time they work (i.e. an hourly or weekly pay rate).

An employee can be paid piece rates when:

• an applicable industrial instrument, such as a modern award or enterprise agreement, allows for piece rates to be paid; or
• the employee isn’t covered by an industrial instrument and they get a pay rate based on how much work they do.

Pieceworkers are most commonly found in the horticulture industry, where fruit and vegetable pickers are often paid a fixed rate per item picked. Such an arrangement is enabled by the Horticulture Award 2020 (Horticulture Award).

Horticulture Award

Under the Horticulture Award, an employer and a full-time, part-time or casual employee may enter into an agreement for the employee to be paid a piecework rate (clause 15.2(a) of the Horticulture Award).

In respect of such agreement for an employee to be paid a piecework rate:

• The employer and the individual employee must have genuinely made the piecework agreement without coercion or duress (clause 15.2(f));
  
• The piecework agreement between the employer and the individual employee must be in writing and signed by the employer and the employee (clause 15.2(g));
  
• The employer must give the individual employee a copy of the piecework agreement and keep it as a time and wages record (clause 15.2(h)); and
  
• The piecework rate fixed by agreement between the employer and the employee must enable the average competent employee to earn at least 15% more per hour than the minimum hourly rate prescribed in this award for the type of employment and the classification level of the employee. The piecework rate agreed is to be paid for all work performed in accordance with the piecework agreement. (clause 15.2(b)).

Where an agreement is made, in accordance with clause 15.2, for the employee to be paid a piecework rate, the piecework rate will be paid instead of the minimum rates specified in clause 15 (clause 15.2(d)).

If an employer breaches a relevant provision of the Horticulture Award, they may be liable for a breach of a civil remedy provision.

Whilst the Horticulture Award does not guarantee an employee on a piecework rate, pursuant to an agreement, will earn at least the minimum ordinary time weekly rate or hourly rate otherwise provided by an award, an employee who is an award/agreement-free employee will need to receive at least the national minimum wage.

Minimum wage

Even where piece rates are used, employers must ensure that pieceworkers who are award/agreement-free employees receive at least the national minimum wage.

Accordingly, where an award/agreement-free employee’s piece rates equate to less than the national minimum wage for a period of work, the employer will be required to make a “top up” payment to ensure that the employer does not contravene a term of an applicable national minimum wage order.

At the time of this article, the current national minimum wage order is the National Minimum Wage Order 2020 (Order), which came into operation on 1 July 2020.

Clause 4.3 of the Order provides that an employer of an employee to whom the national minimum wage applies must pay the employee a base rate of pay that at least equals the national minimum wage. Clause 4.1 of the Order stipulates that the national minimum wage is $753.80 per week, calculated on the basis of a week of 38 ordinary hours, or $19.84 per hour.

Furthermore, clause 4.2 of the Order provides that the national minimum wage applies to an award/agreement free employee other than (with corresponding meanings under the Act):
(a) a junior employee;
(b) an employee to whom a training arrangement applies; or
(c) an employee with a disability.

The Order also requires a casual loading of 25% be paid for award/agreement free casual employees (see clause 5).

Section 293 of the Act, being a civil remedy provision, provides that an employer must not contravene a term of a national minimum wage order.

Entitlements

For permanent horticulture employees covered by the Horticulture Award, their entitlements to annual leave, personal/carer’s leave, redundancy pay and payment in lieu of notice, under the National Employment Standards, are ordinarily calculated with reference to either their base or full rates of pay.

Under the Horticulture Award, the base rate of pay and full rate of pay for a pieceworker have their definitions as per the National Employment Standards.

Additionally, notwithstanding that an employee may be designated by their employer as a “casual”, whether they are actually permanent or casual will depend on all the relevant circumstances, including whether they have a firm advance commitment to ongoing work.

Further information

If you require advice or assistance, please do not hesitate to contact us.