Modern awards have a number of aims.  One of the main aims was to rationalise the old confusing and complex (federal and state) award system so that employers in Australia do not have to juggle with multiple numbers of complex awards for calculating the pay and conditions of their employees.  Conversely, employees should be better placed to know their proper pay and entitlements.

The second aim is that the terms of modern awards have been made less ambiguous so that there is less room for disagreement and dispute over the meaning and particular clauses. That is not to say that all ambiguity has gone, but it has been reduced substantially.

Modern awards are the industrial instruments that set out the minimum wage rates for employees.  Together with the NES, they also cover the minimum employment standards.  This way, modern awards and the NES form the safety net of wages and conditions of employment, which apply to all national system employers and employees.

National system employers and employees are:

• Trading, financial and foreign corporations and their employees (constitutional corporations);
• Employed in Victoria, the Northern Territory or the Australian Capital Territory
• Employees of the Commonwealth and Territory Governments including its authorities;
• Waterside, maritime and flight crew employed in connection with interstate and overseas trade.
• All other employees in all other States (other than Western Australia)