Why Award Changes Matter More Than Ever
Modern Awards shape the minimum pay and conditions for millions of Australian workers. Yet many business owners remain unsure which award applies, how classifications work, or what their obligations really are. As the Fair Work Commission continues its multi-year review of gender-based undervaluation across a number of key awards, employers should expect substantial changes over the next 12–24 months — including revised classification structures and significant wage increases.
These changes aren’t simply administrative. They affect workforce planning, budgeting, compliance, pricing, funding arrangements, and employee engagement. Preparing early is essential to avoid costly errors and ensure smooth transitions across your teams.
Many business owners we speak to are surprised to learn they’re even covered by a Modern Award – let alone facing wage increases of up to 35% over the next few years.
This article summarises what’s changing, which awards are affected, and practical steps every employer should take now.
Note on timing:
Several of the Fair Work Commission’s proposed commencement dates have now passed without final determinations. This is common in large-scale award reviews. Employers should expect delays, revised dates, and progressive announcements as decisions are finalised. For this reason, it’s important to monitor updates closely and prepare for implementation well in advance once operative dates are confirmed.
1. What Is a Modern Award — and Why Does It Matter?
Awards are legally enforceable documents that set the minimum terms and conditions for specific industries and occupations, including:
- Minimum pay rates
- Penalty rates
- Allowances
- Overtime and rest breaks
- Rostering rules
- Classification levels
Awards also sit above the National Minimum Wage.
WA Has Two Parallel Systems: National Awards and State Awards
Western Australia is unique. It is the only state with a significant, ongoing dual award system, meaning:
- The National Modern Awards (Fair Work System) apply to most private-sector businesses.
- The WA State Awards (State Industrial Relations System) apply only to certain businesses that are not constitutional corporations.
There are 122 National Modern Awards in Australia and WA has 43 State Awards, covering industries and occupations that fall under the WA state system.
Which businesses are covered by national awards?
In WA (and across all other Australian states and territories), businesses fall under the national Fair Work system if they are a constitutional corporation, meaning they are typically:
- Pty Ltd companies
- Incorporated organisations
- Trusts where the trustee is a company
- Most not-for-profits that are incorporated
- Medium and large employers (almost always)
- Any business that operates as a trading, financial or foreign corporation
Most WA SMEs are constitutional corporations, which means a National Modern Award is likely to apply unless every employee is:
- Genuinely award-free (e.g. many senior managers, senior professionals, or specialist roles).
Which businesses are covered by the WA State Award system?
The WA industrial relations system only covers non-constitutional corporations, such as:
- Sole traders
- Partnerships
- Some unincorporated associations
- Some charities or community organisations that are not incorporated
- Family businesses operating under individual names
These employers may be covered by one of WA’s 43 State Awards or the WA Minimum Conditions of Employment Act.
What about the rest of Australia?
All other states and territories (NSW, VIC, QLD, SA, TAS, ACT, NT) operate almost entirely under the National Fair Work system. The only exceptions are:
- A very small number of NSW/QLD state public sector awards (government only).
- No other state has a dual private-sector state award system like WA.
2. How to Know Which Award Applies (Simple Three-Step Method)
Misclassification is one of the most common causes of underpayment. If you are unsure, or if your workplace has a mix of roles (common in community services, health, and Aboriginal organisations), getting professional support is recommended.
For SMEs, navigating this system can feel overwhelming — especially when multiple awards apply across the business. But getting award coverage or classification wrong can lead to:
- Underpayments
- Back-payments
- Penalties and fines
- Employee claims
- Reputational damage
Understanding which system you fall under — national or WA state — is the first step in staying compliant and protecting your business.
Award coverage is determined by:
Step 1: Industry coverage first
Each award begins by defining the industry or sector it covers.
Example: The Hospitality Industry (General) Award covers businesses whose predominant activity is hospitality.
Step 2: Then by the duties performed
Within each award, job classifications depend on the actual work performed — not job titles or what the contract says.
Step 3: Match the position to the correct classification level
Classification levels define the skills, qualifications, responsibilities, and experience expected for each level.
Helpful Tools
Employers can also use Fair Work tools for National Award cover to guide assessment, including the Award Finder, pay guides, and classification summaries.
Employers covered by WA State Awards can visit the WA Government’s WA award summaries page.
These tools don’t replace a full HR review, but they provide a useful starting point — especially for employers who are unsure where to begin.
Strategic HR supports employers across all these stages — from reviewing award coverage and mapping classifications to preparing contracts, modelling costs, and communicating changes with staff.
3. Key National Award Changes Employers Must Prepare for (2025–2027)
The Fair Work Commission is reviewing several key national awards as part of the gender-based undervaluation process. These reviews aim to ensure pay and classification structures appropriately value work typically performed by women. Several changes will have significant financial and operational impacts.
A summary of the latest confirmed and proposed changes appears below (accurate as of November 2025, see timing note above).
A. Pharmacy Industry Award 2020
What’s changing:
- A 14.1% increase for pharmacists, applied in three equal instalments of 4.7% each.
Timing:
- 30 June 2025
- 30 June 2026
- 30 June 2027
Employer impact:
- Update payroll each year
- Factor increases into budgets, pricing, and funding
- Communicate staged increases early
B. Children’s Services Award 2010
What’s changing:
- A significant overhaul of classification structures for Children’s Services Employees
- Alignment to the Caring Skills benchmark
- Up to 23% wage increases, starting with a proposed 5% from 1 August 2025
Timing:
- Proposed five-year phased implementation from August 2025
Employer impact:
- Reclassification and translation to new structure
- Workforce planning implications for day care , long day care, and OSHC services
- Communication strategy required for staff
C. Health Professionals and Support Services Award 2020 (HPSS)
What’s changing:
- New classification structure linked to AQF levels
- Wage increases of 8–31%, depending on qualification level
Status:
- Provisional — hearings concluding late 2025
Employer impact:
- Begin mapping current classifications to proposed AQF levels
- Prepare for payroll modelling and cost forecasting
D. SCHADS Award (Social, Community, Home Care and Disability Services Industry Award 2010)
What’s changing:
- Proposal to merge five separate streams into a single classification structure
- Once implemented, the existing Equal Remuneration Order (ERO) will be revoked
Status:
- Final hearings was scheduled October 2025
Employer impact:
- Major reclassification across the sector
- Possible wage increases consistent with the Caring Skills benchmark (potentially up to 20%)
- Review job descriptions and prepare for workforce consultation
E. Aboriginal and Torres Strait Islander Health Workers and Practitioners & ACCHS Award 2020
What’s changing:
- Dental Assistants to move into Health Worker Levels 2–4
- New Oral/Dental Therapist structure aligned with AQF7 Health Professional classification
- Possible increases of 10–35% depending on role
Timing:
- Likely implementation in 2026
Employer impact:
- Reclassification for DA and oral therapy roles
- Engagement with Boards and funding partners essential
- Likely wage modelling and contract updates
4. What Employers Should Do Now
These changes are significant across community services, health, child care, pharmacy, and Aboriginal-controlled organisations. Businesses should begin preparing now to avoid compliance issues, funding gaps, or employee dissatisfaction.
1. Review Award Coverage and Classifications
Ensure every role is correctly classified under the current national award before the new structures are implemented. Use the Find my award tool on the Fair Work Ombudsman website.
2. Model Financial Impacts
Many sectors will face multi-year wage increases.
To help understand the full financial impact over the 2025–2027 period, include:
-
-
- on-costs (superannuation, leave loading, payroll tax, relevant allowances)
- CPI adjustments
- funding arrangements
- pricing implications
-
3. Update Contracts and Position Descriptions
Classification shifts almost always require updated documentation.
4. Engage with Stakeholders Early
This includes boards, funding bodies, NDIS clients, or state/territory agencies.
5. Monitor Fair Work Updates
Final determinations may adjust timing, classification detail, or wage percentages.
6. Seek Professional Guidance
Misclassification is one of the most common award-related errors we see — and one of the most costly.
5. Common Mistakes Employers Make During Award Transitions
Awareness of risk areas prevents unnecessary issues:
- Relying on job titles instead of duties
- Using outdated contract templates
- Assuming only one award applies across the business
- Not factoring superannuation, leave loading and penalties into cost modelling
- Failing to communicate changes clearly to staff
- Letting payroll systems remain unconfigured
6. The Risks of Getting Award Classifications Wrong
While it’s important to approach these changes calmly, employers should be aware of the consequences of incorrect award coverage or misclassification.
Under the Fair Work Act, businesses can be liable for up to six years of backpay, including:
- underpaid wages
- penalty rates
- overtime
- allowances
- leave loading
- superannuation
For many organisations — particularly in community services and health — these amounts can be substantial and may threaten financial viability if left unaddressed.
The aim is not to alarm employers, but to highlight why early preparation matters. Getting classifications right now reduces risk, protects cash flow, and avoids the stress of retrospective corrections.
Conclusion
Award changes are becoming more frequent and more substantial, particularly in care and support sectors. For businesses already managing tight margins and limited HR capacity, early preparation is essential.
Understanding coverage, mapping roles, modelling costs, and communicating with staff will help ensure a smooth transition — and reduce the risk of compliance breaches.
Need clarity on how these changes affect your organisation?
Contact Strategic HR Australia for practical, plain-English support to help you review awards, update classifications, and stay compliant with evolving employment law.
