The base rate of pay in an enterprise agreement can't be less than the base rate of pay in an award that covers an employee.

If the agreement base rate of pay is less than the award base rate of pay, the agreement has effect in relation to an employee as if the agreement rate was the same as the award rate.

When this occurs, all other terms in the agreement continue to apply.

If an employee is not covered by an award, the relevant comparison is the base rate of pay set by the national minimum wage order.

Example

Wardell works for an aged care facility as a cook. He's covered by an enterprise agreement, and his base rate of pay is $27 per hour during ordinary hours.

Wardell looks at the Aged Care Award and finds that a cook is classified as an Aged care employee - general - level 3. He knows that pay rates in the award changed on 1 January 2025.

In February 2025 he uses the Pay Calculator to check what the base rate of pay for a Level 3 employee is, and finds that it's $27.66 per hour.

This means that from 1 January 2025 the base rate of pay in Wardell's enterprise agreement was lower than the base rate of pay in the award.

Wardell is entitled to the higher base rate of pay in the award from 1 January 2025.

What does the base rate of pay mean? Does it include the casual loading?

The base rate of pay is the rate payable to an employee for their ordinary hours of work. It doesn't include:

• incentive-based payments and bonuses
• loadings
• monetary allowances
• overtime or penalty rates
• any other separately identifiable amounts.

This means the base rate of pay doesn't include casual loading.

It's important to check the terms of each agreement, as some agreements include a definition of what's included in the base rate of pay.

What if the base rate in an agreement can't be identified?

Sometimes it's not clear what the base rate in an agreement is. For example, some agreements include higher loaded rates of pay that are paid to employees for all hours worked. The loaded rate may include penalties, loadings and allowances.

If the agreement provides a loaded rate and the base rate can't be separately identified, then the loaded rate will be used as the base rate of pay for comparison.

The FWC's Online Learning Portal has more information about enterprise agreements and employee pay and entitlements.

Are the base rates in an agreement subject to any increases?

No, unless there are increases provided in the agreement.

If the agreement base rate falls below the relevant award or national minimum wage order base rate of pay, the award or order rate will replace the agreement rate.

The Annual Wage Review doesn't automatically apply to agreements.