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The National Employment Standards

Since 1 January 2010 the Fair Work Act 2009 (Cth) (the Act) has been in operation. This Act applies to the majority of Australian workplaces and regulates the employer/employee relationship. Contained within this legislation are the National Employment Standards (NES). The NES are the 10 minimum employment entitlements that must be provided to all employees by employers. The NES cover the following:

  • maximum weekly hours of work;
  • entitlements to leave and public holiday pay;
  • flexible working arrangements;
  • the provision of a Fair Work Information Statement; and
  • notice of termination and redundancy pay.

The NES provide a safety net for employees and guarantee the minimum standards of work conditions and employee work entitlements, whether an employee is employed on a full time, casual or part-time basis. However, only certain NES entitlements apply to casual employees.

If an employer does not comply with the NES and does not provide the minimum conditions of employment, they may be penalised for breaching the NES. An employer may have to pay a penalty of up to $12,600 (for individuals) or $63,000 (for corporations).

The NES and Contracts of Employment

The minimum rights and entitlements of employees in Australia, as set out in the NES, are not extinguished due to a contract of employment entered into by an employee and an employer. If an entitlement in a contract is less than the NES or excludes the NES, that term has no effect. To put it simply, the NES can not be contracted out of as the NES are statutory rights. For example, if a full-time employee agrees in their contract of employment to only receive five days personal/carer’s leave per year, that employee (despite what the contract says) is still entitled to 10 days paid personal/carer’s leave. This is because the NES state that a full-time employee is entitled to 10 days of paid personal/carer’s leave per year. However, if the contract of employment provides entitlements or terms that are of more benefit or favourable to an employee, those terms and entitlements are enforceable as they are above the minimum benchmark set by the NES.

The Rights of Full-Time Employees

Full-time employees are employed on a permanent basis under an ongoing contract of employment. Under the NES, permanent full-time employees are entitled to the following minimum conditions of employment:

  • to work a maximum of 38 hours per week. However, an employer can request or require that an employee work additional hours, but only if the additional hours are considered reasonable;
  • the right to request a flexible working arrangement if the full-time employee meets the eligibility requirements, and are either a parent or a person responsible for the care of young children, a carer, have a disability, are 55 years of age or older or experiencing violence from a family member (or providing care or support to immediate family or a member of their household experiencing violence);
  • paid annual leave of four weeks per year;
  • unpaid parental leave of up to 12 months and the right to request unpaid parental leave for another 12 months. To be eligible, a full-time employee must have completed 12 months service with their employer and have or will have the responsibility of a child;
  • paid personal/carer’s leave of up to 10 days per year, two days unpaid carer’s leave and two days of compassionate leave as required;
  • written notice of the day of termination, in the event an employee’s employment is ended by their employer. However, if an exception applies, such as the employee’s employment was terminated due to the employee’s serious misconduct, an employer is not obligated to provide the employee with notice. Under the NES, an employer is also required to give an employee a certain amount of notice or pay a notice payment in lieu of the employee working out the applicable notice period. The amount of notice depends on how long the employee has worked for the employer. For example, if an employee’s service with their employer amounts to one year, the employee is entitled to a minimum of one week’s notice from their employer or a payment of one week’s pay instead of the employer giving the employee the notice. The NES also provides that if an employee has completed two years continuous service with their employer and they are aged 45 years or over, they are entitled to an additional week of notice. It is important to note that if an employee’s contract of employment sets out notice arrangements that are more beneficial than the minimum provided by the NES, then those arrangements will usually apply;
  • in the event an employer makes an employee’s position of employment redundant, a full-time employee may also be entitled to redundancy pay under the NES. The NES provides for up to 16 weeks of redundancy pay is payable depending on the length of their service with their employer. However, redundancy pay is not payable in all circumstances under the NES. For example, if an employee works for a Small Business Employer, then they are not entitled to redundancy pay under the NES. Though, it is important to also check an employee’s contract of employment for any entitlements in relation to redundancy pay; and
  • on the commencement of their employment with an employer, an employee must be provided with a copy of the Fair Work Information Statement. The statement contains information about the NES, modern awards, agreement making, the rights and benefits of employees, and the roles of the Fair Work Commission and the Fair Work Ombudsman.

The Rights of Part-Time Employees

Part-time employees are also employed on a permanent basis, but they work less than 38 ordinary hours per week. Part-time employees are entitled to the same terms and conditions of employment as a full-time employee, however, their entitlements are generally pro-rated to how many hours of work they perform each week.

For example, a part-time employee is still entitled to four weeks of annual leave per year under the NES, but this entitlement is calculated on how many hours the part-time employee works each week. This means that if a part-time employee works 20 hours per week, their annual leave payment is calculated on a 20 hour week (and not a 38 hour week).

The Rights of Casual Employees

Casual employees do not have guaranteed hours of work, are employed on a per shift basis, do not receive paid leave entitlements for time away from work, notice of termination and any associated payments or redundancy pay.

Casuals employees are paid for each hour they work and their pay is based on the number of hours worked each week. However, a casual employee is not guaranteed a set amount of hours of work per week like an employee employed on a permanent basis is.

In light of the nature of casual employment, casual employees are paid a higher hourly rate of pay, called a casual loading. This loading is in lieu of some benefits that full-time and part-time employees receive from the employer, such as paid annual and personal/carer’s leave, notice of termination and to compensate for the lack of security of their employment.

This means that casual employees are paid a higher hourly rate of pay compared to permanent full-time and part-time employees performing the same role. The hourly rate of pay paid to casual employees is equivalent to a permanent employee’s hourly rate of pay plus a loading – which is generally 25%. Usually, the rate of pay and the applicable loading is specified by the award or agreement that covers the casual employee’s role. Some awards or agreements have different percentage casual loadings depending on the day or time a casual employee may work. If a casual employee is an award or agreement free employee, the National Minimum Wage Order provides that a casual employee is entitled to a minimum 25% casual loading on the applicable base rate of pay.

Under the NES, casual employees are entitled to the following minimum conditions of employment:

  • to work less than 38 hours per week and only work reasonable additional hours if it is reasonable;
  • two days unpaid carer’s leave and two days unpaid compassionate leave for each occasion that this type of leave is requested;
  • unpaid community service leave;
  • to be absent from work on a public holiday. However, unless a casual employee works the public holiday they will receive no payment for this day off; and
  • unpaid parental leave entitlements and the right to request flexible working arrangements if they have been employed with their employer for 12 months or more on a regular and systematic basis with an expectation of ongoing employment.

Other Workplace Protections

The Act also provides for other fair conditions of work and protections for all employees. Employees are:

  • protected from unfair dismissal;
  • protected from general workplace protections. General workplace protections include protection from an employer taking adverse action against an employee by dismissing them or altering their position of employment to their detriment due to the employee (for example) having a right under a workplace law or being part of a union;
  • protected from discrimination in the work place. It is unlawful for an employer to take action against an employee because of their race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin;
  • protected from their employer coercing them into taking (or not taking) a particular action or placing undue influence or pressure on the employee to change their conditions of work or knowingly or recklessly misrepresenting a workplace right or obligations in relation to an industrial activity; and
  • protected from being bullied and harassed at work. The Act has anti-bullying provisions and employees can make an application to stop bullying if they are being bullied in the workplace.

Termination of Employment – Unfair Dismissal

As stated above, employees are protected from unfair dismissal under the Act.

If a permanent employee is of the view they have been unfairly dismissed they are eligible to make an unfair dismissal claim if they have worked for their employer for six months or if their employer is a Small Business Employer, a period of 12 months. A Small Business Employer is an employer who employs less than 15 employees.

In addition, employees must also:

  • earn less than the high income threshold (which is currently $142,000 until 30 June 2018); or
  • if the employee earns more than the high income threshold, their position of employment must be covered by a modern award or enterprise agreement.

A casual employee may also make a claim for unfair dismissal if they meet the above eligibility requirements and:

  • they were employed on a regular and systematic basis; and
  • had a reasonable expectation of continuing their employment with their employer.

Who Deals With Work Related Claims

The following independent bodies deal with workplace rights and obligations:

The Fair Work Commission

The Fair Work Commission (the Commission) is the national workplace relations tribunal created by the Act. The Commission’s main functions include:

  • the making, reviewing and varying of modern awards;
  • minimum wage fixation;
  • dispute resolution (including industrial disputes);
  • the approval of enterprise agreements; and
  • dealing with applications for unfair dismissal, general protections and bullying.

Timeframe for Lodging Unfair Dismissal and General Protections (Dismissals) Applications

Applications for unfair dismissal and general protections dismissals must be filed within 21 days from the date the dismissal took effect. Late filing may be accepted but only if the Commission finds there has been exceptional circumstances. If a dismissed employee is filing outside the 21 day period, they will need to provide an explanation of the exceptional circumstances that caused them to not file within the statutory time period.

Applications may be filed via email, fax, express post, delivered in person at any of the Commission’s State or Territory offices, filed electronically through the use of the Commission’s eFiling service, or by telephone.

The Fair Work Ombudsman

The Fair Work Ombudsman (FWO) is a statutory agency created by the Fair Work Act 2009 that provides information and advice in relation to workplace rights, entitlements and obligations. The service is free to Australian employees and employers. The office works closely with the Commission in order to provide integrated, timely and relevant services in relation to Australia’s workplace relations system.

The FWO is an independent body whose responsibilities include:

  • the promotion of harmonious, productive and cooperative workplace relations;
  • ensuring that employers and employees comply with Australian workplace laws;
  • educating people working in Australia about fair work practices, rights and obligations of employers and employees;
  • investigating complaints or suspected contraventions of workplace laws, awards and agreements;
  • litigating and enforcing workplace laws; and
  • building strong and effective relationships with industry, unions and other stakeholders that are part of the national workplace relations system.

Should you have any concerns about your employment rights or entitlements or think you have been unfairly dismissed or treated adversely, you should seek legal advice from a legal employment lawyers by using the form below or contact the FWO or the Commission to discuss your circumstances.