Page 8 Page 9 FOCUS HR | IR July Update 2026 FOCUS HR | IR July Update 2026 SUPERANNUATION CLAUSE REVIEW JUNIOR RATES REVIEW When – 23 January 2026 Following its review of superannuation clauses in modern awards, the Fair Work Commission issued determinations varying 125 modern awards in order to standardise superannuation provisions and modernise references to default superannuation funds. The review forms part of the Commission’s broader “making awards easier to use” and award simplification agenda aimed at improving consistency, readability and usability across the modern award system. The review followed earlier provisional views expressed by the Commission regarding inconsistencies that had developed across modern award superannuation clauses over time. These inconsistencies included differences in drafting style, terminology, contribution obligations and references to default superannuation funds that no longer reflected current industry or legislative arrangements. The changes take effect from the first full pay period on or after 23 January 2026. The variations do not fundamentally alter employers’ core statutory superannuation obligations under the Superannuation Guarantee system. Rather, the changes are primarily directed toward improving consistency and clarity within modern awards by: • standardising superannuation clause wording across awards • updating and modernising default fund references • consolidating and simplifying drafting approaches and • improving alignment between award clauses and broader legislative superannuation obligations When – 1 March 2026 The Fair Work Commission made a final decision regarding the Children’s Services Award 2020 [MA000120] as part of its gender-based undervaluation review. Employees covered by the Award received wage increases from the first pay period on or after 1 March 2026, with further increases phased in through to 2028 and 2029 depending on classification level. The Commission also introduced: • a simplified classification structure • a translation schedule for classification movement • updated provisions regarding cooks working “on the floor” and • amended allowance calculations for broken shift and first aid allowances. When – 1 December 2026 The Fair Work Commission published a significant decision regarding the Shop, Distributive and Allied Employees’ Association’s (SDA) application to vary junior wage provisions contained within the General Retail Industry Award 2020 [MA000004], Fast Food Industry Award 2020 [MA000003] and Pharmacy Industry Award 2020 [MA000012]. The proceedings form part of the Commission’s broader focus on modern award fairness, workforce equity and whether junior rates remain appropriate for 18 to 20 year olds performing substantially the same work as adult employees. The SDA sought to remove junior rates for employees aged 18 years and over and argued that the existing structure no longer reflected contemporary workplace realities, particularly where junior employees were undertaking the same duties and responsibilities as adult workers while receiving significantly lower rates of pay. The Fair Work Commission ultimately determined that employees aged 18 years and over who have more than six months’ service with their employer should receive adult rates of pay under the three awards. However, the Commission stopped short of removing all junior rates entirely. Employees aged between 18 and 20 years with less than six months’ service with their employer will continue to receive junior percentages, and employees under 18 years of age remain subject to the existing junior rate structure. Importantly, the Commission recognised that while age and experience may continue to justify some differentiation in wage rates for younger employees, there comes a point where continued payment of junior rates is no longer appropriate where the employee is performing work equivalent to adult employees and has gained sufficient workplace experience. The implementation is a phased approach from Practical Implications for Employers Employers should consider: • reviewing applicable modern awards and amended superannuation clauses • ensuring payroll systems align with updated award wording • confirming default fund references remain accurate • reviewing onboarding documentation and superannuation nomination processes and • assessing any enterprise agreements or employment contracts that reference superseded award provisions Practical Implications for Employers Employers operating within the affected industries should consider: • reviewing workforce demographics and identifying employees who may transition to adult rates • modelling future labour cost impacts associated with implementation • reviewing rostering and workforce planning practices and • ensuring payroll systems can accommodate future transitional arrangements Observation For employers operating across several industries or multiple award-covered workforces, the standardisation process is likely to reduce some administrative complexity and assist with improving payroll and compliance consistency. However, employers will still need to carefully review the amended clauses applicable to their workforce to ensure payroll systems, default fund arrangements and employment documentation remain compliant. Observation This decision is significant because it reshapes workforce cost structures within industries heavily reliant on junior labour, particularly retail, hospitality- adjacent fast food operations and pharmacy sectors. Employers operating within these industries may experience substantial increases in labour costs associated with younger adult workers who historically remained on junior rates for extended periods. The decision signals continuing Fair Work Commission scrutiny regarding junior wage structures, workforce equity and whether age-based wage differentiation remains justified where junior employees are undertaking substantially the same work as adult employees. It also reflects a broader regulatory and societal focus on fairness and modernisation within the award system. Observation The decision represents one of the most significant wage and structural changes within the early childhood sector in recent years. 1 December 2026 with a gradual increase in the percentage rates for employees aged 18 to 20 over a two and a half year period. FIRST PAY PERIOD AFTER GENERAL RETAIL, FAST FOOD & PHARMACY - INDUSTRY AWARDS Age 18 (and employed by the employer for more than 6 months) 19 (and employed by the employer for more than 6 months) 20 (and employed by the employer for more than 6 months) Present Percentages 70 80 90 1-Dec-26 75 85 95 1-July-27 80 90 Full adult rate 1-Dec-27 85 95 1-July-28 90 Full adult rate 1-Dec-28 95 1-July-29 Full adult rate CHILDREN’S SERVICES AWARD CHANGES
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