Australia’s Award Maze Is Officially Broken When Even Canberra Cannot Pay People Correctly
Awards are about humans, not industries
An award is meant to do one thing well. It should define the minimum pay and working conditions for a given job type. It does not care whether that job sits in a hospital, a warehouse, a retail chain, or a tech start-up. The human being is the constant.
Yet our legal architecture is still built on industry labels from another era. Retail, fast food, general clerical, manufacturing, call centres, horticulture, education, health and dozens of niche sectors each have their own modern award.
Most medium and large businesses straddle multiple awards every day:
- A single logistics company may juggle road transport, clerks, professional engineers and IT staff.
- A university must deal with academic, general staff, childcare, cleaning and hospitality conditions.
- A health provider may span nurses, allied health, community services, admin staff and support workers.
Payroll teams do not experience “industry awards”. They experience a tangled web of human roles sitting inside one organisation. Every cycle, they decode dozens of classifications and penalty tables to determine what one person should be paid for a single shift.
From that perspective, a simplified award system that follows the person rather than the industry is common sense. A person’s minimum pay should be based on:
- The level of skill or qualification required
- Whether the role is licensed or regulated
- The nature of the hours and the risk profile
This is the human factor of doing business. It is about the job, not the industry lobby that happened to be strongest when the award was written.
A simplified award system starts there. It recognises that the barista who moves from a café to a hospital kiosk, or the payroll officer who moves from a bank to a university, should not suddenly fall under a totally different structural instrument just because the logo on the payslip changed.
What the current system looks like in practice
To understand why a simplified award system is essential, consider how the current system behaves in the real world.
How much of each dollar reaches the frontline
There is a persistent claim that too much money never reaches the frontline. The sector-wide figures tell a different story. Most charity spending goes on people and direct operating inputs. Staff costs are the largest line because care is human work. Vehicles, clinical supplies, food, utilities and outreach are the work as well. Administration and governance are necessary but remain a smaller share. For regulated services, safe staffing and sound oversight are not overhead in the pejorative sense. They are the preconditions for safe, effective care.
This matters for trust. When the bulk of spending in charities and not-for-profits is people and program inputs, donors and taxpayers can be confident that funds support real outcomes rather than paperwork.
Why the government cannot do everything directly
Public systems must set consistent rules and manage fiscal risk across decades. They share responsibilities across levels of government. They also fund schools, hospitals, defence, infrastructure and pensions at the same time. Long-run budget pressures are real. Health, aged care, the NDIS, defence and interest costs will drive public spending for many years. Even if growth holds, those demands limit how far the government can extend direct delivery.
This is where community organisations step in. NFPs can start a small pilot quickly, shift hours and locations, and weave multiple supports together without waiting for a new budget line. They reach people who do not trust large systems. They can redirect staff and volunteers within hours when fire, flood or a public health event strikes. Government funds the base. Charities and not-for-profits extend that base, innovate at the edges and deal with needs that do not fit neatly into program rules.
A national map of the sector
The charity footprint is spread across every jurisdiction. New South Wales hosts the largest share of registered entities, followed by Victoria and Queensland. Western Australia, South Australia and Tasmania each carry smaller but important shares. The Australian Capital Territory and the Northern Territory host fewer organisations by count, yet they often manage high-cost remote and specialist work. Average revenue per entity varies by state, reflecting service mix, cost structures and the presence of very large providers in some locations.
While there is no single table that cleanly totals “state grants to charities” for all jurisdictions, two public sources sketch the picture. The national charity dataset shows where organisations operate and how they earn and spend. The Report on Government Services shows, by state and territory, what the government spends on programs that are largely delivered by community partners under contract. Together, they point to the same conclusion. The sector is woven through every state economy and holds up critical parts of everyday life.
What grants cover, in percentage terms, and what remains unfunded
Using the national totals, government revenue accounts for roughly half of charity income. The other half comes from fundraising, bequests, philanthropy and fees for goods and services. That split is not a rounding error. It is the sector’s operating model. Grants and contracts pay for core, regulated services. Community organisations find the rest to keep doors open, extend hours, respond to local shocks and try new approaches.
The practical impact is visible. When donations fall or trading income dips, outreach vans skip nights, caseworkers carry heavier loads, and waiting lists grow. When philanthropy rises, pilot programs scale and more people get help sooner. The reliance on mixed income is a strength in terms of responsiveness, and a risk when the economy stutters.
Too many awards, too many rates
When the Fair Work Act introduced modern awards in 2010, thousands of legacy awards were consolidated into 122 instruments. That consolidation was meant to simplify the landscape. More than a decade later, even the government, peak bodies, and award specialists now concede that the system remains excessively complex.
For example, the General Retail Industry Award has been described by the Australian Retailers Association as containing 994 separate pay rates across 96 pages. That is one award. It is not an outlier. Retail is simply one of the few sectors where someone has publicly counted.
A payroll system that must track nearly 1,000 rates under a single modern award is not a sensible design. It is an accident of history. A simplified award system would deliberately avoid that kind of fragmentation by building a clean, national set of skill-based levels that apply across industries.
Compliance failures are systemic, not isolated
Recent years have seen a steady flow of high-profile underpayments:
- Supermarket chains underpaying tens of thousands of salaried managers when salaries failed to keep pace with award entitlements.
- Universities repaying tens or hundreds of millions of dollars to casual academics and professional staff after years of incorrect classifications and missed loadings.
- Major banks remediating millions of dollars in unpaid allowances, loadings and overtime.
- Large employers signing Enforceable Undertakings with the Fair Work Ombudsman after finding that flat rates for casuals did not actually meet award minima or penalty rates.
These are not small businesses guessing in the dark. They are large enterprises with internal HR teams, national payroll software, and external advisors. If they keep tripping over the same awards, then the absence of a simplified award system is a design flaw, not just an operational one.
When even the government struggles to pay correctly
If any group should be able to navigate the award landscape, it is the Australian Public Service and the agencies that administer the Fair Work system. Yet even here, the record is uncomfortable.
The Australian Public Service Commission has issued repeated circulars on correcting underpayments of wages and entitlements for Commonwealth employees. These circulars provide step-by-step guidance to agencies on identifying errors, recalculating entitlements, and remediating staff. They exist because underpayments have occurred often enough to require centralised instructions.
Similarly, Queensland Health has faced ongoing payroll issues, including tens of millions of dollars in overpayments tied to complex rosters and layered industrial instruments. Audit reports highlight the challenge of managing 24-hour rosters, overtime and multiple classification structures at scale.
The Fair Work Ombudsman has now issued a detailed Payroll Remediation Program guide for employers, explicitly aimed at large-scale underpayments. It builds on years of investigations in which the agency has recovered hundreds of millions of dollars in unpaid wages each year, a large share of which comes from big employers and public institutions.
In other words, the system has reached a point where the rulemaker has had to issue a handbook to untangle the rulebook. That should be a mirror moment. When even government agencies and regulators need specialised guidance to correct their own mistakes, it is hard to avoid the conclusion that the current model is, at a structural level, bordering on stupid.
A simplified award system would not remove all human error. It would, however, reduce the number of places where an error can hide. If the Australian Public Service still needed remediation after that change, at least everyone would know it was not because the rules themselves had become unreadable.
Why industry-based awards are past their use-by date
The persistence of industry-based awards has less to do with modern workforce logic and more to do with institutional history. Each industry, and often each union, has built its own architecture over decades.
From an economic and human perspective, this now causes more harm than good.
- People change industries more often than they change professions.
- Multi-site and multi-industry employers are the norm, not the exception.
- Global competition means Australian organisations need to focus management effort on innovation, customers and productivity, not decoding which of 122 awards applies to a roster.
Yet the system rewards fragmentation. Every separate instrument gives an industry group or union a platform to assert its distinct importance. It keeps the bargaining theatre alive. But it does this at the cost of clarity for workers and employers.
A simplified award system cuts across that logic. It accepts that the fundamental distinctions that matter for pay are:
- Unqualified or entry-level roles
- Trades and technical roles that require non-tertiary qualifications
- Professional roles that require tertiary qualifications or similar knowledge
- Specialised workforce groups like health, emergency services and educators
Add a small number of genuinely special regimes, such as aviation, maritime, and high-hazard resource work, and the rest is detail. That detail can live in schedules rather than in separate award universes.
Right now, the industry labels mainly preserve structures that allow narrow interests to prove their relevance. A simplified award system re-centres the conversation on the people actually doing the work.
Design principles for a simplified award system
A credible, simplified award system cannot be just a slogan. It needs a clear structure that protects workers, supports compliance and reflects how enterprises of every size operate.
A practical design could include five core awards:
- Australian Workers Award
- Covers roles where no formal qualification is required to perform the job.
- Many retail, hospitality, call centre, basic admin, warehousing and entry-level care roles would sit here.
- Australian Trades and Technical Award
- Covers roles requiring apprenticeships, TAFE level qualifications or technical licences.
- Electricians, plumbers, mechanics, drivers with heavy vehicle licences and technical operators would sit here.
- Australian Professional Workers Award
- Covers tertiary qualified roles and recognised professions outside health and education.
- Engineers, lawyers, accountants, scientists, IT professionals and senior managers fall into this group.
- Australian Health and Emergency Services Award
- Covers health professionals and support workers, ambulance and emergency services, and related operational staff.
- Australian Educators Award
- Covers childcare through to tertiary education, teaching and non-teaching streams, and relevant support roles.
Alongside these, a simplified award system would include a small number of tightly defined special-regime awards where international regulation, safety, or work patterns are genuinely unique. Aviation, maritime and seagoing work, and high-hazard resource operations such as underground coal mining are obvious candidates.
The key is that each award is built around one unified classification framework based on:
- Skill or qualification level
- Licence or registration requirements
- Responsibility and supervision
- Typical hours and risk profile
Within each award, industry-specific issues would be handled through schedules. For example, a retail schedule in the Australian Workers’ Award, or a construction schedule in the Australian Trades and Technical Award.
By anchoring everything to these five logical categories, a simplified award system would give employers and employees a clear starting point rather than forcing them to click through a long A-to-Z list and decode dense coverage clauses.
How a simplified award system would work day to day
To understand the value of a simplified award system, imagine how it would change daily payroll decisions.
One worker, one core framework
Instead of asking “Which industry award applies to this person today?”, a payroll officer would ask:
- Is this an unqualified role, a trade or a professional role?
- Is there a health, emergency or educator component that would shift them into a specialist award?
- Does any special regime like aviation or maritime apply?
Once the right core award is identified, the employee’s level is set once, at engagement, using a national classification scale. The organisation then selects the relevant industry schedule within that award.
If a retail worker moves into a call centre role within the same business, they remain covered by the Australian Workers’ Award. Only the industry schedule and the classification level may change. The logic is transparent. The simplified award system follows the person across roles.
Cleaner digital tools and payroll systems
Modern payroll platforms attempt to model each award separately. Every variation in penalty rate, minimum engagement, overtime rule and allowance adds another branch in the logic. Over time, this creates a sprawling tree of conditions that is difficult to audit and expensive to maintain.
A simplified award system would let software designers build one deep, well-tested engine for each core award, then layer industry schedules on top. Testing can focus on a small number of core patterns rather than more than 100 separate structures.
That is crucial for small business. A café in regional Queensland, a manufacturer in Western Sydney and a professional services firm in Melbourne could all use the same underlying engine in their payroll tools. They would turn on the relevant schedules, not attempt to interpret a different award every time they hire a new type of worker.
Less noise, more accountability
By cutting down the number of instruments, a simplified award system would also sharpen enforcement. It is easier for the Fair Work Ombudsman to explain and enforce eight awards than 122. It is easier to educate workers about their minimum entitlements when the rules are stable and coherent.
When mistakes still happen, it will be clearer whether they stem from genuine oversight or from deliberate evasion. Complexity would no longer provide cover.
Impact on employers of every size
A simplified award system has different benefits at different scales, but the same underlying logic.
Small businesses
Small business owners often wear the roles of HR manager, payroll officer and operations leader at the same time. They try to do the right thing, but they do not have an enterprise industrial relations team.
The Small Business and Family Enterprise Ombudsman has already noted that even big corporates with specialist staff have struggled with award changes and interpretation. If the system is beating the giants, it is not realistic to expect sole traders and micro businesses to sail through unscathed.
With a simplified award system, a small business would:
- Only need to understand one core award, plus one or two schedules.
- Use simpler digital tools that do not hide hundreds of rates in the background.
- Have fewer grey areas when classifying staff.
That reduces risk under the new wage theft laws, which now treat intentional and reckless underpayments as potential criminal offences. It also reduces the mental load that stops founders from focusing on their customers and strategy.
Medium and large enterprises
Mid-tier organisations and large corporates would benefit in different ways:
- Easier internal training for HR and line managers.
- More accurate, all-inclusive salary modelling, because the underlying minima are easier to track.
- Simpler enterprise bargaining, built on stable, transparent minima that workers and managers both understand.
Many of the large remediation programs in recent years have involved years of going back through rosters, recalculating award entitlements and comparing them to actual payments. A simplified award system would still require remediation where errors occur, but the calculation logic would be far more consistent across business units and time.
What this means for unions and industry groups
A move to a simplified award system would inevitably change the way unions and employer associations operate. It would not abolish them, but it would shift the terrain.
Today, each industry-based award is a distinct arena where organisations argue for their own set of conditions. Some industries have historically secured higher minima and more favourable loadings than others with similar skill profiles, primarily because they had stronger representation and more bargaining leverage at key moments.
A simplified award system would flatten that landscape. It would:
- Make relative pay more transparent across industries for similar skills.
- Push unions to collaborate across broader worker categories, such as all trades or all professionals.
- Encourage employer associations to work together on common standards for compliance and flexibility.
Industry-specific differences would still exist through schedules and enterprise bargaining. However, the core floor would be tied to qualifications, licences and work value, not to who sat at which table in which year.
For unions and industry groups that see their role as promoting fairness and sustainable employment, a simplified award system is an opportunity. It lets them focus on improving conditions above a consistent floor, rather than defending complex structures that few members can explain and that many members now distrust.
Global context and competitiveness
Australia is not operating in a vacuum. Capital, skills and digital services move easily across borders. Employers compete for talent with organisations that often operate under simpler labour standards.
Many comparable economies rely more heavily on a small set of statutory minima and sectoral agreements, rather than a large number of overlapping awards. Others set clear national minimums for skill bands and allow enterprise-level bargaining to handle the rest.
Australia’s detailed approach has strengths. It has helped protect vulnerable workers in sectors with weak bargaining power. But when the Fair Work Ombudsman recovers hundreds of millions of dollars each year and notes that most of those funds come from large employers, the protective benefit of complexity starts to look questionable.
Global investors now routinely assess regulatory risk and compliance overhead when choosing where to expand. A confusing award structure is rarely the deciding factor, but it adds friction. A simplified award system would send a clear signal that Australia takes both fairness and practical compliance seriously.
Making the shift: a practical roadmap
Shifting from 122 awards to a simplified award system will not happen overnight. It needs a careful, staged process that protects workers while delivering real simplification.
A realistic roadmap could include:
- Set the policy objective
- The federal government and the Fair Work Commission clearly state that consolidation into a simplified award system is a medium-term goal.
- Develop a unified classification framework
- Build a national scale that links each level to clear criteria and to the Australian Qualifications Framework.
- Define standard licence or registration premiums for roles that carry additional ongoing cost and risk.
- Map existing awards into the new structure
- For each current award, map every classification to the new framework.
- Identify workers whose minimums would fall under a direct translation and design red circling or transitional arrangements to prevent any reduction.
- Draft the five core awards and specialist regimes
- Prepare exposure drafts for the Australian Workers, Trades and Technical, Professional Workers, Health and Emergency Services, and Educators awards, alongside the limited number of special regime awards.
- Consult widely, but with a clear boundary
- Invite unions, employer bodies, small business organisations and community advocates to review the drafts.
- Make it clear that the question is not whether to create a simplified award system, but how best to implement it without harming vulnerable workers.
- Digitise from the start
- Publish the new awards in formats that are easily consumed by payroll systems and digital tools.
- Provide open, tested reference logic for key calculations.
- Phase in and monitor
- Introduce the simplified award system in stages, perhaps by cluster, while running targeted education campaigns.
- Use Fair Work Ombudsman data to track underpayment trends and adjust where genuine issues emerge.
Done well, this process would result in a simplified award system that delivers absolute clarity within a defined time frame, rather than adding another layer of complexity on top of the existing fog.
Where to from here?
The evidence is now overwhelming. A fragmented, industry-based award structure is no longer fit for a modern, dynamic economy. It is failing workers through persistent underpayments. It is failing employers through confusing obligations and the constant fear of getting it wrong. It is failing regulators and the Australian Public Service, which have had to create their own remediation manuals to cope.
A simplified award system is not a silver bullet. However, it is a necessary foundation if Australia wants a genuinely fair, comprehensible and enforceable framework for pay and conditions.
For many organisations, the idea of redesigning their approach to awards can feel daunting. That is where SBAAS can help. Our team works with enterprises of all sizes, from start-ups to major institutions, to untangle existing arrangements and design practical roadmaps toward simpler, more robust systems that still protect every worker.
If you want to explore what a simplified award system could look like inside your organisation, you can book an appointment with SBAAS or learn more about our approach and experience at our About Us page.
Sources
Fair Work Ombudsman, “List of awards”
https://www.fairwork.gov.au/employment-conditions/awards/list-of-awards
Yellow Canary, “7 reasons why Modern Awards are so complex to interpret”
https://www.yellowcanary.com.au/resources/blogs/7-reasons-why-modern-awards-are-so-complex-to-interpret
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https://www.retail.org.au/media/ara-response-to-general-retail-industry-award-case
Australian Small Business and Family Enterprise Ombudsman, submission on award complexity
https://www.dewr.gov.au/system/files/documents/submission-file/2022-07/australian-small-business-and-family-enterprise-ombudsman-submission.pdf
Business Council of Australia, “Modern Awards Review 2023-24: Making Awards Easier to Use”
https://www.bca.com.au/wp-content/uploads/2024/11/282023-1229_FWC_Mod_Award_Review_Making_Awards_Easier_E28093_BCA_E28093_FINAL.pdf
Fair Work Commission, “Making awards easier to use – part of the Modern Awards Review 2023-24”
https://web-prd.fwc.gov.au/hearings-decisions/major-cases/modern-awards-review-2023-24/making-awards-easier-use-part-modern
ABC News, “Coles and Woolworths underpayments could cost more than $1 billion and have flow-on effects”
https://www.abc.net.au/news/2025-09-08/coles-woolworths-underpayment-court-judgement-fallout/105747578
Russell Kennedy Lawyers, “Set-off clauses in the spotlight: Federal Court cautions employers to avoid all-inclusive salary arrangements”
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https://www.fairwork.gov.au/newsroom/media-releases/2020-media-releases/june-2020/2020619-abc-eu-media-release
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Eric Allgood is the Managing Director of SBAAS and brings over two decades of experience in corporate guidance, with a focus on governance and risk, crisis management, industrial relations, and sustainability.
He founded SBAAS in 2019 to extend his corporate strategies to small businesses, quickly becoming a vital support. His background in IR, governance and risk management, combined with his crisis management skills, has enabled businesses to navigate challenges effectively.
Eric’s commitment to sustainability shapes his approach to fostering inclusive and ethical practices within organisations. His strategic acumen and dedication to sustainable growth have positioned SBAAS as a leader in supporting small businesses through integrity and resilience.
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