The Ultimate Fast Food Industry Award Summary (MA000003)

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Everything you need to know about the Fast Food Industry Award (MA000003), without the jargon.

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The Fast Food Industry Award is a complex and ever-evolving Modern Award focused in several sectors and has a broad coverage in one of the country's biggest industries.

You can read also read our article that covers the 7 conditions commonly missed in the fast food industry award.

In addition, you can download a FREE copy of our Fast Food Industry Award eBook that covers everything you need to know about the award, without the jargon which comes with a BONUS payroll processing checklist. 

This summary provides will provide you a comprehensive understanding of everything you need to know about the Fast Food Industry Award to ensure you have maximum Fair Work compliance.

Disclaimer:
Please note that every effort has been made to ensure that the information provided in this guide is accurate. You should note, however, that the information is intended as a guide only, providing an overview of general information available. This guide is not intended to be an exhaustive source of information and should not be seen to constitute legal or tax advice. You should, where necessary, seek a second professional opinion for any legal or tax issues raised in your business affairs.

The Fast Food Industry Award also covers:

  • on-hire employees - who are employees that are supplied to the employer’s client to work under them; and 
  • employers who provide group training services for apprentices and trainees engaged in the fast food industry.   
  •  

However, the Fast Food Industry Award does NOT cover employers in:

 

If an employer or an employee is covered by more than one modern award, they are covered by the modern award that contains a classification that is the most appropriate to the work that they are doing:

  • If, however, the employee can’t be classified in the Fast Food Industry Award, it’s possible that the employer and employee are covered by an award with occupational coverage.

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  • Full-time
  • Part-time; or
  • Casual

 

Full-time Employees

To be classified as a full-time employee, they must work an average of 38 hours per week.

Part-time Employees

To be classified a part-time employee, they must:

  • work less than 38 hours per week; and
  • have reasonable predictability in terms of the hours they work.

 

Regular Pattern of Work Agreement

At the time of employment, the employer and employee must agree in writing on a regular pattern of work, detailing:

  • which days of the week the employee will work;
  • the total number of daily work hours;
  • the starting and finishing times of each workday;
  • the time and duration of mealtimes; and
  • that the employee will work at least 3 consecutive hours a day (so a minimum of 8 hours per week).

The employer must keep a copy of the agreement and provide a copy to the employee.

Any changes made to the agreement should be made in writing (including electronic communication such as a text message). Any record of these changes should be added to the original agreement:

  • if there is no record kept of changes to the regular pattern of work, the employee is entitled to receive overtime rates for any hours worked beyond hours contained in the original agreement.

 

Casual Employees

If an employee does not meet the definition of a part-time employee and who is not a full-time employee, they will be considered as a casual employee.

Please note, as a result of the lack of annual leave and personal/carer’s leave, sick leave, redundancy benefits and other entitlements that full- and part-time employees receive, casual workers are paid an additional 25% casual loading on top of their base rate of pay.

A casual employee must work a minimum of 3 hours per day.

 

Right to Request Casual Conversion

A regular casual employee is someone who is employed casually on a regular basis for at least 12 months.

In some cases, a casual employee can apply to have their employment contract changed into a part-time or full-time contract depending on the number of hours they regularly work:

  • An employee that works an average of 38 or more hours a week over 12 months may elect to change over to a full-time contract
  • An employee that works an average of fewer than 38 hours a week over 12 months may elect to change over to a part-time contract

The employer has full discretion to accept, in writing, or refuse the request. However, if the employer chooses to deny the request, it needs to be based on reasonable grounds, such as:

  • to fulfil the requirements of the new employment type, there is a significant change to the number of work hours;
  • the casual position may not exist in the next 12 months;
  • the casual position may have reduced working hours within the next 12 months; or
  • there is likely to be significant changes in the casual employee’s workdays and times within the next 12 months that doesn’t suit the employee’s availability.

All grounds of refusal should be known or reasonably foreseeable.

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Notice of Termination by an Employee

An employee must give their employer notice of termination as below:

Employee’s period of continuous service with the employer at the end of the day the notice is given

Period of notice

Not more than 1 year

1 week

More than 1 year but not more than 3 years

2 weeks

More than 3 years but not more than 5 years

3 weeks

More than 5 years

4 weeks

 

The notice that an employee is required to give is the same required of an employer, except the employee does not have to provide additional notice based on their age.

If an employee who is at least 18 years old does not give the period of notice required, then the employer can deduct from wages due to the employee. However, no more than one week’s wages should be deducted.

Please note, however, if the employer has agreed to a shorter period of notice, then no deduction can be made.

 

Job Search Entitlement

When an employer has given notice of termination to an employee, the employee must be allocated paid time up to one day, so that they can search for new employment elsewhere.

The allocated time should be taken when convenient to the employee and after consultation with the employer.

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Transfer to Lower Paid Duties on Redundancy

This section applies to employees that are transferred to new duties on a lower rate of pay, due to redundancy.

The employer may:

  • Give the employee notice of the transfer at least the same length as if it were a notice of termination; or
  • Transfer the employee to the new duties without giving notice of transfer, providing the employer pays the employee as per the terms below:
    • The employee is entitled to an amount equal to the difference between the ordinary rate of pay of the employee for the hours of work the employee would have worked in the first role and the ordinary rate of pay of the employee in the second role for the period for which notice was not given.

 

Employee Leaving During Redundancy Notice Period

If an employee is given notice of redundancy, they may elect rather to terminate their employment during the minimum period of notice.

The employee is entitled to receive the benefits and payments they would have received had they remained in employment until the expiry of the notice.

 

Job Search Entitlement

When an employer has given notice of redundancy to an employee, the employee must be allocated paid time up to one day, so that they can search for new employment elsewhere.

The allocated time should be taken when convenient to the employee and after consultation with the employer.

If requested by the employer, the employee must produce proof of attendance at an interview.

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Please note, you can also refer to the minimum rates for different classifications here.

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  1. Meal allowance - If your employee is required to work more than 1 hour overtime with less than 24 hours notice
  2. Special clothing allowance - if your employees are required to wear or launder any specialised clothing or protective items outside of a regular uniform.
  3. Excess travelling costs - if an employee temporarily moves from one branch or shop to another.
  4. Travelling time reimbursement - where an employee is required to work at a place away from their usual place of employment, they will be paid travelling time.
  5. Transfer of employee reimbursement - where an employer transfers an employee from one town or city to another, the employer will be responsible for paying all moving expenses.
  6. Transport allowance for no n-delivery drivers - where an employer requests an employee to use their own car to carry out employment duties.
  7. Transport allowance for delivery drivers - where an employer requests an employee who primarily performs delivery duties, to use their own car
  8. Transport of employee - where an employee needs to arrange alternative transport due to having to start work before 7 am or finishing after 10 pm, the full taxi fare will be reimbursed.
  9. Cold work disability allowance - If your employee’s primary duties require them to enter cold chambers and/or to stock refrigerated storage.
  10. Broken hill allowance - for the urgent demand of working in Broken Hill (County of Yancowinna, NSW)

Search our database for relevant allowances for the various modern awards.

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The Fast Food Industry Award has entitlements to accident pay for employees on workers compensation.

Accident pay is the difference between what an employee would normally get paid and the amount they get paid from workers compensation and it's paid by the employer.

For casual employees, this is calculated by averaging their hours over the 12 months before the day they started getting workers compensation payments.

If an employee returns to work on less hours or modified duties, their accident pay is reduced by how much they get paid for that work.

Example:

Larry works 34 hours a week at $22 an hour, totalling $748 per week.

Unfortunately, Larry was injured at work and had to rely on workers compensation. He received $420 a week in workers compensation payments, so his employer had to pay him $328 a week in accident pay. After a 6 week recovery period, Larry could return to work.

However, his duties had to be modified. He worked 18 hours a week for $17 per hour, totalling to $306 per week.

So, Larry’s accident pay is reduced by $306, meaning that he will get only receive an additional $22 in accident pay per week

Under the Fast Food Award, employees are entitled to accident pay for up to 26 weeks, however:

  • accident pay is not paid for the first 7 days (including days off) of the 26 weeks;
  • if the injury occurs in the first 2 weeks of employment, the employee only gets accident pay if the incapacity lasts for more than 2 weeks; and
  • If an employee gets a lump sum instead of weekly payments from workers compensation, their employer doesn't have to pay accident pay.
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Please note, a rate of 9.5% of an employee’s ordinary earnings must be contributed to a nominated fund.

  • The amount to be paid may be reduced by any amount that the apprentice was eligible to receive for travel costs to attend block release training under a Government apprentice assistance scheme
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  • 38 hours per week over a period of no more than 4 weeks; and
  • 11 hours per day.

 

Penalty Rates

Penalty rates are higher rates that need to be paid for working outside of ordinary hours.

The table below outlines the penalty rates that are to be paid at different times and on different days:

Time of ordinary hours worked

Full-time and part-time employees
(% of ordinary hourly rate)

Casual employees
% of the ordinary hourly rate
(inclusive of casual loading)

Monday to Friday
10.00pm - midnight

110%

125%

Monday to Friday
midnight - 6.00am

115%

125% 

Saturday

125%

150%

Sunday
Level 1 employees

125%

150%

Sunday
Level 2 & 3 employees

150%

175%

 

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  • the ordinary weekly hours of work are exceeded;
  • the employee is required to begin work before the ordinary start time;
  • the employee is required to end work after the ordinary start time; and
  • the part-time employee works more hours than originally agreed upon and there is no written record of the change.

A casual employee is entitled to overtime when:

  • the ordinary weekly hours of work in terms of the roster are exceeded/

Overtime Rates

The table below outlines the rates that need to be paid to full- and part-time employees:

For overtime worked on

Overtime rate
(% of ordinary hourly rate)

Monday to Friday
first 2 hours

150%

Monday to Friday
after 2 hours

200%

Sunday 

200%

Public Holiday

250%

 

The table below outlines the rates that need to be paid to casual employees:

For overtime worked on

Overtime rate
(% of ordinary hourly rate inclusive of casual loading)

Monday to Friday
first 2 hours

175%

Monday to Friday
after 2 hours

225%

Sunday 

225%

Public Holiday

275%

 

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Time Off Instead of Payment for Overtime

It is possible for an employer and employee to agree (in writing) to taking time off for their overtime, instead of getting paid the overtime rates.

Employees are entitled to take time off based on what their overtime payment would have been.

For example, if a casual employee worked 2 hours overtime, they are entitled to 3 hours time off (2 x 150%).

If, however, the employee requests it, the employer must pay the employee for overtime covered by the agreement but not taken as time off; and any payment must be made in the next pay period following the request.

Employers may not exercise undue influence or pressure employees to take time off instead of payment for overtime.

Time off must be taken:

  • within 6 months after the overtime is worked; and
  • at a time within that 6 month period that is agreed on by both the employee and employer

Should the employee not take the time-off within the 6 month period, the employer must pay the employee as per the overtime rates.

If on termination of the employee’s employment, the employer must pay the employee for the overtime worked at the applicable overtime rate.

Example:
Lilly, an employee at a local fast food restaurant worked 3.5 hours overtime on a Tuesday night.

She had agreed with her employer to receive time off as opposed to getting paid for her overtime hours.

According to the overtime rates, she is entitled to receive 225% of her ordinary hourly rate. So, her time off calculation will be as follows:

3.5 hours x 225% overtime rate = 7.8 hours time off

However, this time off needs to be taken within six months of the worked overtime and at a time that is agreed on by both the employer and employee

 

Reasonable Overtime

An employer may require an employee to work reasonable overtime hours at overtime rates. However, an employee can refuse to work overtime hours if they are unreasonable.

When determining whether overtime hours are reasonable, the following must be taken into account:

  • any risk to employee health and safety from working the additional hours;
  • the employee's personal circumstances, including family responsibilities;
  • workplace needs;
  • whether the employee is entitled to receive overtime payments, penalty rates or other compensation for working additional hours;
  • if notice is given by the employer when requesting the additional hours;
  • if notice is given by the employee of refusal to work additional hours;
  • the usual patterns of work in the industry;
  • the nature of the employee's role and the employee's level of responsibility; and
  • any other relevant matters.
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Hours worked per shift

Paid rest break

Unpaid meal break

Less than 4 hours

None

None

Between 4 and 5 hours

1 x 10-minute break

None

Between 5 and 9 hours

1 x 10-minute break

1 x break between 30 and 60 minutes

9 hours or more

1 x 10-minute rest break if there are 2 x meal breaks; or 


2 x 10-minute rest breaks if there is only 1 x meal break :

  • 1 x break should be taken in the first half of the work hours; and 
  • 1 x break should be taken in the second half of the work hours

1 or 2 x breaks between 30 and 60 minutes

 

An employee should not take or be requested to take a rest break combined with a meal break.

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The National Employment Standards  also includes minimum entitlements to: 

  • personal/carer's leave; 
  • compassionate leave; 
  • unpaid family and domestic violence leave; 
  • community service leave; and 
  • long service leave. 

Payment for Annual Leave Loading

Under the Food Industry Award, if an employee would’ve worked on a certain day but has taken paid leave, they are entitled to a 17.5% annual leave or the relevant weekend penalty rate, whichever is the higher of the two amounts.

 

Annual Leave for Shiftworkers

For the purposes of the NES, shiftworkers are employees who work on either of the 7 days and are regularly rostered to work on Sundays and public holidays in a business that operates 24/7.

Under the Food Industry Award, if a shiftworker would’ve worked on a certain shift but has taken paid leave, they are entitled to a 17.5% annual leave or the relevant weekend penalty rate, whichever is the higher of the two amounts.

 

Alternative Leave Arrangements:

  1. Leave in advance: employers and employees may agree in writing to the employee taking a period of paid annual leave before the employee has accrued the leave.
  2. Cashing out annual leave: employers and employees may agree in writing to cashing out a particular amount of an employee’s accrued paid annual leave.
  3. Excessive leave accruals: employers and employees may agree in writing on how to reduce or eliminate excessive leave accrual. An excessive leave accrual is defined as having accrued more than 8 weeks paid annual leave, or 10 weeks for a shiftworker.

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Work on public holidays must be compensated by payment at the rate of 225% or 250% for casual employees (inclusive of casual loading).

Employees that need to work on public holidays may substitute an alternative day off provided that it’s been agreed in writing between the employer and employee.

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You can also download a FREE copy of our Fast Food Industry Award eBook with a BONUS payroll processing checklist to ensure you maximise your Fair Work payroll compliance.

If this is all too much trouble and you'd rather automate the process like many of our clients, you can make the shift over to KeyPay cloud payroll by engaging us to help you to transition from a manual to a cloud system seamlessly.

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