As an employer, it is important to be aware that all employees are entitled to minimum entitlements as set out in the National Employment Standards (NES). Additionally, a modern award may apply to your employees and set out the minimum terms and conditions of employment. There are also enterprise agreements made between employers and employees about the terms and conditions of employment.

The NES, modern awards and enterprise agreements are a form of base entitlements. There are many different entitlements, all of which are important for you to understand. This article provides an overview of the industrial system in Australia, so you can understand which employee entitlements relate to your business.

National Employment Standards

The NES consists of 10 minimum entitlements which must be provided to all employees. 

Entitlement

Details

1. Maximum Weekly Hours

The maximum weekly hours of work are:

  •  38 hours for a full-time employee; and
  •  less than 38 hours for a part-time employee.

This is unless the additional hours worked are reasonable.

2. Requests for Flexible Working Arrangements

Some employees who have worked for the same employer for at least 12 months can request flexible working arrangements. This includes changes to hours, patterns of work or locations of work.

3. Parental Leave

Employees can get parental leave when a child is born or adopted. Employees are entitled to 12 months of unpaid parental leave. They can also request an additional 12 months of unpaid leave.

4. Annual Leave

Full-time employees are entitled to four weeks of annual leave per year. 

Part-time employees are entitled to four weeks of annual leave per year on a pro rata basis, according to the number of hours they work.

Shift Workers may get up to five weeks annual leave per year.

5. Personal Leave

Permanent employees are entitled to 10 days of sick and carer’s leave for each year of employment.

All employees, including casual employees, are entitled to two days of unpaid carer’s leave.

Employees are also entitled to two days of compassionate leave each time an immediate family or household member dies or suffers a life-threatening illness or injury.

All employees are entitled to five days of unpaid family, and domestic violence leave each year.

6. Community Service Leave

Employees, including casual employees, can take community service leave for certain activities such as:

  • voluntary emergency management activities; and
  • jury duty (including attendance for jury selection).

There is no limit on the amount of community service leave an employee can take.

7. Long Service Leave

An employee obtains long service leave after a long period of working for the same employer. 

Most employees’ entitlement to long service leave comes from specific laws in each state or territory.

8. Public Holidays

It is important to know when public holidays are because employees can get different entitlements on these days.

9. Notice of Termination and Redundancy Pay

A notice period is the length of time that an employee or employer has to provide to end employment. To end an employee’s employment (also known as firing or terminating employment), an employer has to give them written notice of their last day of employment.

There are specific requirements around redundancy. The employee’s dismissal must be a genuine redundancy, so the employee is not able to make an unfair dismissal claim.

10. Fair Work Information Statement

Every worker in Australia needs to be provided with a copy of the Fair Work Information Statement when they start a new job.

Modern Awards

Moderns awards came into effect on 1 January 2010 and provide entitlements such as:

  • minimum rates of pay;
  • hours of work;
  • rosters;
  • breaks; 
  • allowances;
  • penalty rates; and
  • overtime rates.

There are currently 122 modern awards. The entitlements in each modern award vary, so you should not expect the entitlements to be uniform across all awards.

Who is Covered?

Modern awards apply to all employees covered by the national workplace relations system. They are industry or occupation-based and apply to employers and employees who perform work covered by the award. Employees will fall under a modern award if they: 

  • work in an industry or occupation that has an applicable award; or
  • are performing duties covered within the relevant modern award’s classifications.

Managers or higher-income employees may not be covered by a modern award, even if one applies to the industry in which they work. You can use the Fair Work’s find my award tool to locate the applicable award for your employees. You can also use Fair Work’s Pay and Conditions Tool (PACT) to calculate:

  • pay;
  • leave;
  • notice; and 
  • redundancy.

When Modern Awards Do Not Apply

If a registered agreement covers the business, the conditions of a modern award are usually no longer relevant. 

For example, this may be if an enterprise agreement is in place.

However, if the base rates of pay in an agreement are lower than those in the relevant modern award, the base rates of pay in the modern award will apply.

An award or a registered agreement will not cover some employers and employees. When an award or agreement does not cover an employee, they are considered to be award and agreement free. In these situations, the NES will form the minimum terms and conditions of employment.

Award Classification

There is a set of award classifications for each modern award. These are a set of criteria that determine which employees each respective award covers. These include the employees:

  • duties;
  • responsibilities;
  • qualifications; and
  • experience.

Furthermore, each award could contain several levels of classification. This means the minimum wages payable to your employees may vary depending on their classification level. This can be quite complicated for employers to navigate, especially when you have employees spread across different classification levels.

Enterprise Agreements

Enterprise agreements are specific to each business and can be tailored to meet the needs of the business.

Some occupations may require certain arrangements, like different work hours or weekend work, that the relevant modern award does not provide for. Enterprise agreements allow employers to vary entitlements like:

  • work hours;
  • overtime; and
  • penalty rates.

This is as long as it leaves an employee ‘better off overall‘ in comparison to the relevant award’ entitlements. This means the employee’s rights must be greater under the agreement than the applicable award. 

For example, your business does not want to provide penalty rates or overtime as per the relevant award. As such, you will need to provide another entitlement to compensate for this. This ensures the employee is better off overall. You could compensate the employee by increasing the hourly rate for ordinary hours worked by the employee.

It is important to remember that pay rates in awards are reviewed each year. You should check to see if there has been an increase on 1 July, then review your enterprise agreement to ensure your rates remain above the award and that the employee is better off overall. If the increase in rates in the award go above the rates in your enterprise agreement, the relevant award will then apply.

Contracts of Employment

Employment contracts can add additional entitlements on top of the employees base entitlements. They cannot make employees worse off than their minimum entitlements, whether that is under:

  • the NES;
  • the relevant award; or
  • an enterprise agreement. 

Employment contracts typically contain provisions outlining:

  • hours of work;
  • the probation period;
  • leave entitlements;
  • restraint of trade or non-compete;
  • notice of termination; and
  • rules on confidentiality and intellectual property.

Key Takeaways

As employees can be entitled to a range of differing entitlements, it can be quite complicated to navigate the system to ensure your employees are receiving all their entitlements. You must understand the entitlements of each employee so that you do not face any penalties from the FairWork Ombudsman. If you have any questions about understanding employee entitlements for your business, contact LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.

COVID-19 Business Survey
LegalVision is conducting a survey on the impact of COVID-19 for businesses across Australia. The survey takes 2 minutes to complete and all responses are anonymous. We would appreciate your input. Take the survey now.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. For just $199 per month, membership unlocks unlimited lawyer consultations, faster turnaround times, free legal templates and members-only discounts.

Learn more about LVConnect

Rowan ONeill
Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • By submitting this form, you agree to receive emails from LegalVision and can unsubscribe at any time. See our full Privacy Policy.
  • This field is for validation purposes and should be left unchanged.
Our Awards
  • 2019 Top 25 Startups - LinkedIn 2019 Top 25 Startups - LinkedIn
  • 2019 NewLaw Firm of the Year - Australian Law Awards 2019 NewLaw Firm of the Year - Australian Law Awards
  • 2020 Fastest Growing Law Firm - Financial Times APAC 500 2020 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards 2020 Law Firm of the Year Finalist - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer
Privacy Policy Snapshot

We collect and store information about you. Let us explain why we do this.

What information do you collect?

We collect a range of data about you, including your contact details, legal issues and data on how you use our website.

How do you collect information?

We collect information over the phone, by email and through our website.

What do you do with this information?

We store and use your information to deliver you better legal services. This mostly involves communicating with you, marketing to you and occasionally sharing your information with our partners.

How do I contact you?

You can always see what data you’ve stored with us.

Questions, comments or complaints? Reach out on 1300 544 755 or email us at info@legalvision.com.au

View Privacy Policy