I provide my employees their National Employment Standards entitlements, that's it isn't it?

The National Employment Standards (NES) are 11 minimum employment entitlements that apply to all Australian employees. They provide the following standards:\

  1. Maximum weekly hours

  2. Requests for flexible working arrangements

  3. Offers and requests to convert from casual to permanent employment

  4. Parental leave and related entitlements

  5. Annual leave

  6. Personal/carer's leave, compassionate leave and unpaid family and domestic violence leave

  7. Community service leave

  8. Long service leave

  9. Public holidays

  10. Notice of termination and redundancy pay

  11. Fair Work Information Statement and Casual Employment Information Statement

(Note: casual employees are only entitled to some NES entitlements)

The NES cannot be amended, altered or ignored regardless of any employment contract or agreement otherwise.

However, for most employers simply ticking off the NES is not enough. The vast majority of employees are covered by on of the 100 plus modern awards ('award'), all of which came into effect on 1 January 2010. An award is a document which sets out the minimum terms and conditions of employment in accordance with industry or occupation, on top of the NES. Modern award provide additional entitlements such as:

  • pay

  • hours of work

  • rosters

  • breaks

  • allowances

  • penalty rates

  • overtime

Like the NES, there is no opting out of an award. A common misconception surrounding modern awards is the assumption that paying over-award rates will meet award obligations. This is not the case. Paying over-award rates to employees will not guarantee award compliance as there is more to awards than pay rates.

Despite this, there are a number of mechanisms available to businesses to vary or exclude the operation of modern awards, such as individual flexibility agreements, annualised salary arrangements, a high income guarantee of annual earnings or negotiating a collective agreement for the entire workplace. However, unless businesses have undertaken the laborious task of reviewing the applicable awards that may apply to their business, it is impossible to assess compliance or consider any means to vary or exclude awards.

For an employer, breaching award conditions can attract substantial civil penalties, regardless of whether the employer is an individual or a corporate employer. The further risk is that the likelihood of multiple breaches over an extended period is common. In addition to the risk of prosecution, continued breaches of award obligations can rapidly lead to serious back-pay liability for a business. Our business law team can assist you in identifying any applicable modern awards and ensuring your business is compliant and up to date.

Lachlan EdwardsO'Farrell Robertson McMahon