3C.01Modern enterprise award or transitional arrangements resulting in reduction in take‑home pay

#### 3C.01 Modern enterprise award or transitional arrangements resulting in reduction in take‑home pay (1) This regulation is made for subitem 8(1) of Schedule 2 to the Act. (2) Item 2 of Schedule 2 to the Act is modified by: (a) replacing ‘subitem 11(2)’ in the definition of take‑home pay with ‘subitems 11(2) and 16AA(2)’; and (b) replacing ‘subitem 12(1)’ in the definition of take‑home pay order, with ‘subitems 12(1) and 16AB(1)’. (3) Schedule 6 to the Act is modified by inserting the following Division after Division 3 of Part 2. ‘Division 3A—Avoiding reductions in take‑home pay from modern enterprise award or transitional arrangements 16AA Modern enterprise award terms giving FWA power to make take‑home pay orders (1) A modern enterprise award may include terms that give FWA power to make an order (a take‑home pay order) remedying a reduction in take‑home pay suffered by an employee, or a class of employees, as a result of the making of a modern enterprise award or the operation of any transitional arrangements in relation to the award (whether or not the reduction in take‑home pay is a modernisation‑related reduction in take‑home pay). (2) An employee’s take‑home pay is the pay an employee actually receives: (a) including wages and incentive‑based payments, and additional amounts such as allowances and overtime; but (b) disregarding the effect of any deductions that are made as permitted by section 324 of the FW Act. > Note: Deductions permitted by section 324 of the FW Act may (for example) include deductions under salary sacrificing arrangements. (3) This Division applies to an employee, or a class of employees, to whom a modern enterprise award applies if the employee or employees are likely to suffer a reduction in take‑home pay attributable to the making of a modern enterprise award or the operation of any transitional arrangements in relation to the award. 16AB Orders remedying reductions in take‑home pay (1) If FWA makes a take‑home pay order under the terms of a modern enterprise award it must do so in accordance with this Division. (2) Without limiting the kind of take‑home pay order that may be made under the terms of a modern enterprise award, one or more of the following orders may be made: (a) an order compensating a reduction in take‑home pay that has already been suffered; (b) an order requiring the payment of an amount of take‑home pay; (c) an order preventing a reduction in take‑home pay from occurring. (3) FWA may make a take‑home pay order only on application by: (a) an employee who has suffered a reduction in take‑home pay; or (b) an organisation that is entitled to represent the industrial interests of such an employee; or (c) a person acting on behalf of a class of such employees. (4) If FWA is satisfied that an application for a take‑home pay order has already been made in relation to an employee or class of employees, FWA may dismiss any later application that is made in relation to the same employee or employees. 16AC Ensuring that take‑home pay orders are confined to the circumstances for which they are needed (1) FWA must not make a take‑home pay order in relation to an employee or class of employees if: (a) FWA considers that the reduction in take‑home pay is minor or insignificant; or (b) FWA is satisfied that the employee or employees have been adequately compensated in other ways for the reduction. (2) FWA must ensure that a take‑home pay order is expressed so that: (a) it does not apply to an employee unless the employee has actually suffered a reduction in take‑home pay; and (b) if the take‑home pay payable to the employee under the modern enterprise award increases after the order is made, there is a corresponding reduction in any amount payable to the employee under the order. 16AD Take‑home pay order continues to have effect so long as modern enterprise award continues to cover the employee or employees A take‑home pay order made in relation to an employee or class of employees to whom a particular modern enterprise award applies continues to have effect in relation to the employee or employees (subject to the terms of the order) for so long as the modern enterprise award continues to cover the employee or employees, even if it stops applying to the employee or employees because an enterprise agreement starts to apply. 16AE Describing classes of employees (1) Without limiting the way in which a class of employees mentioned in items 16AA to 16AD may be described for the purposes of those items, the class may be described by reference to one or more of the following: (a) a particular type of employment; (b) a particular classification, job level or grade; (c) a particular entitlement; (d) a particular employer. (2) To avoid doubt, the description of a class is not required to include the names of the employees, or the number of employees, included in the class. 16AF Inconsistency with modern enterprise awards and enterprise agreements A term of a modern enterprise award or enterprise agreement has no effect in relation to an employee to the extent that it is less beneficial to the employee than a term of a take‑home pay order that applies to the employee. 16AG Application of provisions of FW Act to take‑home pay orders The FW Act applies as if the following provisions of that Act included a reference to a take‑home pay order: (a) subsection 675(2); (b) subsection 706(2). > Note: For compliance with take‑home pay orders, see item 7 of Schedule 16.’