There exist certain minimum terms and conditions of employment for “federal system employees”, which comprises most private sector employees and federal government employees are contained in the Fair Work Act 2009 (Cth) (the FW Act). All employment agreements (whether written or verbal) and modern awards and enterprise agreements are subject to a safety net of minimum conditions. Those minimum conditions are set out in the National Employment Standards (NES), which are comprised in the FW Act and employment contracts cannot exclude or provide an entitlement less than the NES.
The minimum terms and conditions of an employment relationship can vary subject to the type of employment in which someone is engaged – specifically, on a fixed or permanent full-time or part-time basis, or on casual basis.
What are the 10 National Employment Standards (NES) entitlements?
The 10 NES entitlements are summarised as follows:
Maximum weekly hours of work - maximum ordinary weekly hours of work are 38 standard hours per week for full-time employees (which can be averaged over a 6 month period), unless any additional hours are reasonable.
Request for flexible working arrangements – this is an entitlement allowing certain employees to request a flexible working arrangement, for example, to assist with the care of children. Examples of flexible working arrangements can include a temporary reduction in hours, non-standard start of finish times, working split shifts or in a job-sharing arrangement, or working from home.
Parental leave and related entitlements - where full-time and part-time employees have completed at least 12 months continuous service, they are entitled to up to 12 months’ unpaid leave, plus a right to request an additional 12 months’ unpaid leave, plus other forms of maternity, paternity and adoption-related leave.
Annual leave – full-time and part-time employees are entitled to 4 weeks’ paid annual leave for each year of service, plus an additional week for certain shift workers. The entitlement to annual leave accrues progressively during each year, is cumulative and is paid out on termination, for any reasons.
Personal / carer’s leave and compassionate leave – 10 days’ paid personal/carer’s leave, two days unpaid carer’s leave as required, and two days compassionate leave (unpaid for casuals) as required.
Community Service Leave – employees are entitled to community service leave if taking part in an eligible community service activity. This includes jury service, a voluntary emergency management activity (for example, an activity for the SES, Country Fire Authority or the RSPCA), or an activity otherwise prescribed by regulation. However, employees absent on voluntary emergency management activities do not have to be paid by the employer.
Long Service Leave – permanent employees are entitled to accrue long service leave. Whilst there is a NES standard covering long service leave, no uniform national scheme exists and long service leave is covered by State law and certain entitlements vary from State to State. Some awards contain industry specific long service leave provisions and portable long service leave an apply in certain industries.
Public Holidays – employees are entitled to paid absence from work on public holidays. An employer can make a reasonable request for an employee to work on a public holiday but an employee can refuse on reasonable grounds. The FW Act sets out certain factors to be considered in determining what is reasonable.
Notice of Termination and Redundancy Pay – employees must be given the minimum notice of termination required under the NES or be paid in lieu for the period of notice. There are exceptions which relate to casual employees and where employment is terminated for serious misconduct. Employment contracts can provide entitlements for greater notice periods however the statutory requirement will override any lesser contractual notice provisions.
The minimum entitlements to notice of termination under the FW Act are identified in the table below:
Period of employer's continuous service | Minimum notice period |
1 year or less | 1 week |
At least 1 year but less than 3 years | 2 weeks |
At least 3 years but less than 5 years | 3 weeks |
More than 5 years | 4 weeks |
An employee who is over 45 years of age and has worked for the employer for at least two years is entitled to receive an additional weeks’ notice.
Where employment ends due to the redundancy of the employee’s position, the employee is entitled to redundancy pay in addition to notice or payment in lieu of notice. Redundancy occurs when an employer either decides they no longer need the employee’s job to be done by anyone, or the employer becomes insolvent or bankrupt and terminates the employment.
Redundancy pay is calculated having regard to the employee’s continuous period of service with their employer and is paid at the employee’s base pay rate for ordinary hours works (i.e. excluding bonuses, loadings, overtime or penalty rates and other separately identifiable amounts).
The scale of redundancy pay is identified in the table below:
Period of employee's continuous service | Redundancy Pay |
At least 1 year but less than 2 years | 4 weeks |
At least 2 year but less than 3 years | 6 weeks |
At least 3 year but less than 4 years | 7 weeks |
At least 4 year but less than 5 years | 8 weeks |
At least 5 year but less than 6 years | 10 weeks |
At least 6 year but less than 7 years | 11 weeks |
At least 7 year but less than 8 years | 13 weeks |
At least 8 year but less than 9 years | 14 weeks |
At least 9 year but less than 10 years | 16 weeks |
At least 10 years | 12 weeks |
However, some employees won’t be entitled to redundancy pay when their role is made redundant. For example, employees whose period of continuous service with the employer is less than 12 months, those who are employed for a fixed period of time, those who are fired by reason of serious misconduct, casual employees, certain trainees and apprentices and employees of small businesses (i.e. an employer who employers fewer than 15 employees at the time when notice is given).
10. Provision of a Fair Work Information Statement – this must be provided by employers to all new employees. The statement contains information about the NES, Modern awards, agreement-making, the right to freedom of association, individual flexibility arrangements, union rights of entry, transfer of business, termination of employment and the role of each of Fair Work Australia and the Fair Work Ombudsman. A copy of the statement can be accessed here.
Interplay with awards and registered agreements
Employers should also closely consider any award and registered agreements as these can detail how the NES work. As an example, they can set out details about:
(i) Averaging an employee’s ordinary hours of work.
(ii) Taking annual leave in advance or cashing it out.
(iii) Taking time off in lieu instead of payment for overtime.
(iv) When redundancy pay entitlements do not apply.
(v) Substituting public holidays.
Additionally, awards and registered agreements can also supplement the NES by providing entitlements that are more favourable for employees.
What about casual employees?
Casual employees only get certain NES entitlements. These are:
2 days unpaid carer’s leave and 2 days unpaid compassionate leave per occasion;
maximum weekly hours;
community service leave (excluding paid jury service);
to make a reasonable request for a day off on a public holiday; and
provision of the Casual Employment Information Statement, a copy of which can be accessed here.
Generally
Employers need to ensure that they do not contravene a provision of the NES. A contravention of a provision of the NES may result in penalties of to $13,320 per contravention for an individual and $66,000 per contravention for a corporation.
If you are concerned whether your business is obliged to comply or has not complied with the NES, or if you consider that one or more of the NES entitlements is not being made available to you, feel welcome to contact Victoria-Jane of BlackBay Lawyers to arrange a consultation.
