Restaurant Industry Award – The Effects of a Significant Decision

A full bench of the Fair Work Commission has endorsed a proposal from Restaurant and Catering Industrial to streamline the award classification structure within the Restaurant Industry Award 2020, introduce an all-in allowance and introduce an exemption rate for higher-paid employees.

These significant award variations follow months of lobbying by the Industry’s peak body and have been warmly welcomed by restaurant employers across the country. However, the long-term future of the variations remains unclear.

The new award terms will come into effect from 11 August 2021 for an initial 12-month period. They are designed as a mechanism to assist the industry in COVID-19 pandemic recovery. The FWC has committed to a review of the scheme after nine months to assess the effectiveness of the provisions.

The Exemption Rate

The exemption rate, operating similarly to the existing annualised salary provisions, allows senior employees and their employers to agree to a ‘loaded’ weekly rate. If agreed to the loaded rate, which must be at least 170% higher than the prescribed minimum weekly base rate of pay, excludes a range of allowances, penalty rates, overtime rates and meal break penalties from applying in relation to that employee for all hours up to an including 57 hours per week. Additional remuneration arrangements apply for any work beyond 57 hours.

The exemption rate can only apply to employees classified at the Level 5 or Level 6 classifications.

The Substitution Allowance

The Substitution allowance can be agreed to either on an individual level (by mutual agreement), or enterprise-wide level (by a vote of all eligible employees with at least 75% support).

Once agreed, the affected employee/s will be entitled to receive an additional amount on top of their ordinary hourly rate of pay, in substitution for

(a) clauses 16.5 and 16.6 (meal break);

(b) clause 21.2 (meal allowance);

(c) clause 21.3 (split shift allowance);

(d) clause 21.4 (tool and equipment allowance);

(e) clause 21.5 (special clothing allowance); and

(f) clause 21.6 (distance work allowance).

New Classification Structure

At the employer’s discretion the business may transition to the new classification structure under Schedule AA of the Award.

This new classification structure provides for a simplified two stream system of classification. Namely, a Restaurant and Café Worker stream and a Chef steam.

The Restaurant and Café Worker stream applies to all front of house employees, bar staff, kitchen hands, and unqualified cooks. Whilst the Chef Stream applies to trade qualified chefs.

The Schedule AA classification definitions are as follows:

AA.2 Restaurant/Café Worker Grade 1

AA.2.1 Means an employee who is engaged in any of the following:

(a) picking up glasses; or

(b) providing general assistance to food and beverage attendants of a higher classification not including service to customers; or

(c) removing food plates; or

(d) setting or wiping down tables; or

(e) cleaning and tidying associated areas; or

(f) receiving money; or

(g) cooking breakfasts and snacks, baking, pastry cooking or butchering; or

(h) general cleaning duties within a kitchen or food preparation area and scullery, including cleaning cooking and general utensils used in a kitchen and restaurant; or

(i) assisting employees who are cooking; or

(j) assembling and preparing ingredients for cooking; or

(k) general pantry duties.

AA.2.2 In addition to the duties set out in AA.2.1, means an employee who has not achieved the appropriate level of training and who is engaged in any of the following:

(a) supplying, dispensing or mixing liquor; or

(b) assisting in the cellar; or

(c) undertaking general waiting duties for food or beverages, including cleaning tables; or

(d) receiving money; or

(e) attending a snack bar; or

(f) performing delivery duties; or

(g) taking reservations and greeting and seating guests.

AA.2.3 In addition to the duties set out in AA.2.1 and AA.2.2, means an employee who has the appropriate level of training, and who is engaged in specialised non-cooking duties in a kitchen or food preparation area.

AA.3 Restaurant/Café Worker Grade 2

AA.3.1 Means an employee who has the appropriate level of training and is engaged in any of the following:

(a) supplying, dispensing or mixing liquor; or

(b) assisting in the cellar; or

(c) undertaking general waiting duties for both food and liquor, including cleaning tables; or

(d) receiving money; or

(e) assisting in the training and supervision of food and beverage attendants of a lower classification; or

(f) delivery duties; or

(g) taking reservations and greeting and seating guests; or 

(h) cooking duties such as baking, pastry cooking or butchering.

AA.3.2 In addition to the duties set out in AA.3.1, means an employee who has the appropriate level of training, which may include a supervisory course, and who has responsibility for the supervision, training and co-ordination of kitchen attendants of a lower classification.

AA.4 Restaurant/Café Worker Grade 3

AA.4.1 Means an employee who has the appropriate level of training, which can include a supervisory course, who:

(a) carries out specialised skilled duties in a fine dining room or a restaurant; or

(b) has responsibility for the supervision, training and co-ordination of food and beverage staff or for stock control for one or more bars.

NOTE: To avoid any doubt, an employee classified in one of the classifications set out in this Schedule shall perform all the duties of the classification as required by the employer.

AA.5 Chef stream

AA.5.1 Chef grade 1 (tradesperson) means a commi chef or equivalent who has completed an apprenticeship or passed the appropriate trade test or who has the appropriate level of training, and who is engaged in cooking, baking, pastry cooking or butchering duties.

AA.5.2 Chef grade 2 (tradesperson) means a demi chef or equivalent who has completed an apprenticeship or passed the appropriate trade test or who has the appropriate level of training and who is engaged to perform general or specialised cooking, butchering, baking or pastry cooking duties or supervises and trains other cooks and kitchen employees.

AA.5.3 Chef grade 3 (tradesperson) means a chef de partie or equivalent who has completed an apprenticeship or passed the appropriate trade test or who has the appropriate level of training in cooking, butchering or pastry cooking and who performs any of the following:

(a) general and specialised duties, including supervision or training of kitchen employees; or

(b) ordering and stock control; or

(c) supervising other cooks and kitchen employees in a single kitchen establishment.

The new classification streams will correspond to existing wage levels as follows:

Other than the new classification structure contained in Schedule AA, the remaining variations are contained in the new Schedule R of the Award. The key provisions are provided below:

Schedule R (operative from 11 August 2021 until 10 August 2022)

R.3 Exemption Rate

R.3.1 An employer and a full time employee (paid at the Level 5 or Level 6 rate of pay) may enter into an agreement to pay the employee no less than 170% of their relevant Level rate of pay each week as set out in clause 18—Minimum Rates of this award (the Exemption Rate).

R.3.2 Where an agreement to pay the Exemption Rate has been made, the following clauses of this award shall not apply:

(a) clauses 16.5 and 16.6 (meal break);

(b) clause 21 (allowances);

(c) clause 23 (overtime rates) but not clause 23.2; and

(d) clause 24 (penalty rates).

R.3.3 Where an agreement has been made to pay an employee the Exemption Rate the employee must be paid the Exemption Rate for each hour worked up to and including 57 hours in a week and for hours worked in excess of 57 hours in a week the employee must be paid:

(a) 150% of the Exemption Rate for the first two hours in excess of 57 hours in the week; and then

(b) 200% of the Exemption Rate thereafter in the week.

R.3.4 The Exemption Rate shall be the rate for the purposes of calculating:

(a) personal leave; and

(b) annual leave.

R.3.5 Clause R.3 does not apply to employees classified under the administrative and general stream (Schedule A.4).

R.4 Classification Structure and Definitions

R.4 Classification Structure and Definitions

R.4.1 Subject to clause R.4.2 an employer may elect to classify all relevant employees in accordance with the classifications set out in Schedule AA in substitution for classifying the employee in accordance with Schedule A.

R.4.2 An employee who is classified in accordance with Schedule AA shall be paid the minimum rate for the relevant classification in Schedule AA as set out in the table below in substitution for the minimum rates set out in clause 18—Minimum Rates of the award that would otherwise apply:

R.5 Substitution Allowance

Subject to this clause:

R.5.1 an employer and an employee may enter into an agreement to pay the employee a substitute allowance as below (the Substitute Allowance):

R.5.2 an employer and at least 75% of the employees in the workplace concerned may agree to pay all of the employees in the workplace a Substitute Allowance as below:

R.5.3 Where an agreement to pay the Substitute Allowance has been made in accordance with clause R.5, the following clauses of this award shall not apply:

(a) clauses 16.5 and 16.6 (meal break);

(b) clause 21.2 (meal allowance);

(c) clause 21.3 (split shift allowance);

(d) clause 21.4 (tool and equipment allowance);

(e) clause 21.5 (special clothing allowance); and

(f) clause 21.6 (distance work allowance).

R.5.4 The Substitute Allowance shall be paid for all purposes of this award.

R.5.5 The Substitute Allowance is adjusted in accordance with increases to wages.

In addition to the above, Schedule R also importantly requires that employers consult with affected employees prior to enacting any of the above provisions. It further requires any agreements to be recorded in writing; and provides for a termination of any such agreements on the provision of four weeks’ notice.

For advice on how to implement any of the above award conditions contact Clyde Industrial