The FWC has varied a large number of modern awards to clarify the manner in which overtime penalties for casual employees are to be calculated under each award.

The awards have generally been varied to implement one of the following three approaches:

  1. Awards where overtime penalty rates are paid in substitution for the casual loading;
  2. Awards where the casual loading and the overtime penalty rate are added separately to the minimum hourly rate (the cumulative approach); and
  3. Awards where the overtime penalty rate is applied to an ordinary hourly rate consisting of the minimum hourly rate and the casual loading (the compounding approach).

In addition to clarifying the above issue in numerous awards, some variations have been made to particular awards to clarify other aspects of the overtime entitlements for casuals, and to address related matters.

With the exception of the variations to the Aged Care Award 2010, the award variations were operative from the first full pay period that started on or after 20 November 2020. The variations to the Aged Care Award 2010 are operative from the first full pay period that starts on or after 1 March 2021.

In a related decision, on 13 January 2021 a Full Bench of the FWC handed down a decision clarifying the manner in which casuals are to be paid under the Nurses Award 2010 for overtime, ordinary hours worked on weekends, and ordinary hours worked on public holidays. The Full Bench has decided that the penalties apply on a compounding basis.

If you would like more information about award coverage, please contact Ai Group’s Workplace Advice Service on 1300 55 66 77.

Alternatively, if you would like advice and assistance regarding the payment of overtime for casual employees,please contact your local employment, workplace and industrial lawyer in Sydney, Newcastle, Wollongong, Adelaide, Melbourne or Brisbane or contact Ai Group Workplace Lawyers here.

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