Trialling someone in a more senior role sounds like a good idea. It’s a low-pressure way to test if they’re ready, right?
Maybe — but only if it’s structured properly.
In Australian workplaces, there’s a tool built for this exact purpose: the higher duties allowance.
Used well, it gives you flexibility, protects your business, and rewards employees for stepping up — without triggering the legal headaches of a full-blown promotion or contract variation.
So why don’t more businesses use it?
What Is a Higher Duties Allowance?
A higher duties allowance is a temporary additional payment made when an employee performs duties at a higher classification level than their usual role.
It can apply:
- When someone steps into a more senior role during leave
- When you want to test capability before a promotion
- When a restructure is underway but not finalised
- When someone takes on extra responsibility for a set period
The allowance reflects the difference in pay rate between their usual role and the higher-level role — and can be partial or full, depending on duties performed.
Why This Matters Legally
Many businesses let employees “act” in more senior roles without formally adjusting their pay or title. This creates risk.
Under Australian employment law and many modern awards:
- Employees must be compensated if they regularly perform higher duties
- Failing to pay can breach minimum standards
- Employees may later claim reclassification, back pay, or misrepresentation
A properly structured higher duties allowance helps you stay compliant with the Fair Work Act and transparent with your team.
The Hidden Advantages for Employers
- It sets clear expectations
A higher duties allowance is a formal mechanism — not a favour. This ensures both parties are aligned on scope, pay, and duration. - It avoids permanent reclassification
By clearly documenting the temporary nature, you avoid the risk of the role becoming permanent by default. - It creates a trial period
You get to see how someone performs without committing to a permanent promotion or title change. - It signals opportunity
Employees often feel valued when formally asked to step up — especially if it’s accompanied by fair pay and recognition. - It limits underpayment claims
If someone later challenges their classification or duties, the record of higher duties payment offers strong evidence of good faith.
When to Use a Higher Duties Allowance
- Someone is covering for a manager on leave
- A restructure is underway, and roles are still being defined
- You want to assess if a team member is ready for promotion
- A short-term project requires leadership not part of their usual role
- You need agility — not bureaucracy
What to Include in a Higher Duties Agreement
Keep it tight and clear. You don’t need a new employment contract — a formal letter or addendum will do.
Include:
- Start and end dates (or review date)
- Duties to be performed
- Amount of the allowance (e.g. $XX per hour or flat weekly rate)
- Reference to applicable award clause or policy
- Statement clarifying that it is temporary and non-permanent
Tip: Always get the employee’s signature acknowledging the arrangement.
Award-Specific Considerations
Most Australian modern awards (and some enterprise agreements) include specific clauses around higher duties.
For example:
- The Clerks – Private Sector Award 2020 requires payment when employees perform higher duties for more than 5 consecutive days.
- The Hospitality Industry (General) Award includes allowances and clear thresholds for duty substitution.
Check the award relevant to your industry — or work with an external HR provider like Hack Your HR, who can interpret the exact entitlements and draft compliant agreements on your behalf.
What NOT to Do
❌ Verbal arrangements only — “Just help out for a while” sounds harmless, but without documentation, it creates legal ambiguity.
❌ No pay adjustment — Even if the employee accepts it temporarily, you may still be breaching minimum standards if the duties are substantially different.
❌ Excessive scope creep — Ensure the person isn’t covering a second full-time job without support or clarity.
What If You Want to Promote Them After the Trial?
A successful higher duties stint often becomes the precursor to permanent promotion.
Once you’re confident:
- Issue a new position description
- Update the contract with title and pay
- Adjust award classification
- Clarify any changes to reporting lines or responsibilities
You can also use the data from the trial (KPIs hit, feedback gathered, manager endorsement) to justify the promotion to senior leadership or board members.
Can This Backfire?
Yes — but only if you:
- Leave the trial open-ended
- Don’t reward the employee fairly
- Promise promotion and don’t follow through
- Fail to reset expectations if the trial ends
Honest, proactive communication matters. Let the employee know the purpose is developmental, and that performance will be reviewed at a specific date.
Final Word: Make Promotions a Process, Not a Gamble
Too often, promotions are emotional or rushed. Someone leaves, and the closest capable person is elevated with no real structure.
A higher duties allowance is a smarter approach. It gives:
- Legal coverage
- Business continuity
- Recognition and opportunity
- A data-based trial period
Most importantly, it protects both sides.
If you’re not already using higher duties mechanisms — especially in award-covered workplaces — it’s time to start. It’s not just smart HR. It’s good business.