The concept of Ordinary Pay is one that causes some confusion in its application.  This is because there is not one single definition in workplace relations for the term.  ACAPMA members are reminded that application of Ordinary Pay must be appropriate to the situation, instrument and legislation.

Fair Work Act (FWA) and the National Employment Standards (NES)

Ordinary Pay

Under the Fair Work Act the concept of Ordinary Pay refers to the Base Rate of:

  • Amount due for a period of paid leave (National Employment Standards); and
  • Rate on which penalties are calculated (s16 of the Fair Work Act).

Base Rate

Under the FWA and the NES the Base Rate does NOT include:

  • Allowances
  • Overtime
  • Penalty Rates
  • Loading
  • Bonuses

Full Rate

Confusion can be caused by the use of Full Rate, which while sounding very similar, has a very different meaning under the FWA and the NES. Unlike Base Rate, Full Rate is defined by Section 18 of the FWA as: “The amount the employee would have received if they had have been working in their standard role”.

Full Rate includes; allowances, overtime, penalty rates, loading and other bonuses as well as Superannuation.

The Full Rate is used primarily when calculating the amount to be paid to the employee in lieu of notice.

Modern Awards

The definition of Ordinary Pay can differ under each Modern Award. For the Three main downstream petroleum Awards different types of Leave attract different definitions of Ordinary:

AWARDLEAVE TYPE  ORDINARY PAY
Road Transport and Distribution Award
  • Annual Leave
  • Payment in Lieu of Leave
  • Base Rate + Leave Loading (17.5%) or the shift allowance/penalty rate that would have applied, whichever was the greater, but not both
  • Leave due to shutdown Personal and Carers leave (sick leave)
  • Community Service  Leave
  • Base Rate
  • Public Holidays
  • Base Rate + penalty rate
Vehicle Manufacturing, Repair Services and Retail Award
  • Annual Leave
  • Payment in Lieu of Leave
  • Full Rate + Leave Loading (17.5%) or the shift allowance that would have applied, whichever was the greater, but not both
  • Leave due to shutdown Personal and Carers leave (sick leave)
  • Community Service  Leave
  • Base Rate
  • Public Holidays
  • Base Rate + penalty rate
Clerks Private Sector Award
  • Annual Leave
  • Payment in Lieu of Leave
  • Base Rate + Leave Loading (17.5%) or the shift allowance/penalty rate that would have applied, whichever was the greater, but not both
  • Leave due to shutdown Personal and Carers leave (sick leave)
  • Community Service  Leave
  • Base Rate
  • Public Holidays
  • Base Rate + penalty rate

Superannuation Guarantee

The definition of Ordinary also impacts on superannuation payments.  Next weeks HR Highlight will explore this element in more detail.

Here to Help

ACAPMA members are reminded that the ACAPMAlliance Workplace Relations Professionals are available to assist with all employment matters. For more information just call 1300 160 270.

HR Highlights are things to consider, implement and watch out for in your business. They are provided as general advice and you should seek further advice on your situation by calling 1300 160 270 and speaking to one of the ACAPMA Workplace Relations Professionals its free for members. ACAPMA membership is affordable at only $550 per year for a single site and valuable with sites gaining HR advice support and representation as well as a raft of other benefits and discounts. Click here to learn more about ACAPMA membership.

Elisha Radwanowski BCom (HRM & IR)
ACAPMA Workplace Services Manager

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