Contract offsets. Protect over Award payments you make.

Public news

Most employers in the automotive industry pay above award rates to maintain staff, especially with their tradespeople. Unfortunately, there is little or no documentation to underpin the terms and conditions of employment of staff including, these above award payments.

The MTA’s Workplace Relations Department has assisted many members over the past year in dealing with underpayment of wages claims. These claims generally flow from a lack of necessary documentation and could have been avoided with properly constructed employment contracts.

Employment contracts can be drafted and implemented to cover existing or new employees. They can provide protection for members while also providing clarity in remuneration and work conditions for staff.

One of the advantages in implementing an employment contract is to include an ‘off-setting’ clause to ensure that underpayment claims can be rebutted when employees are paid above award rates. Members should note that absorption of increases and other payments into over-award rates is a customary practice in the automotive industry. However, unless appropriate provisions are documented and agreed, it can leave an employer exposed to underpayment claims.

The MTA Workplace Relations department has employment contract templates available for members with this clause. They can also be found through the new members section of the MTA website, by clicking here. Members are encouraged to contact the MTA’s Workplace Relations team to discuss their Workplace Relations and Human Resources needs further. Click here to email the team.

Remember, it is better to be safe and to know that you have the appropriate documentation in place, than to rely on a simple and possibly false understanding that you are protected just because you are paying above-award wages.