Minimum Working Conditions
Fair Work Act: The National Employment Standards (“the NES”)
The NES of the Fair Work Act 2009 (Cth) constitute a safety net for employees within the federal system. The NES are designed to complement the key industrial instruments under the Fair Work Act 2009 (Cth) – being modern awards and enterprise agreements.
As well as legislating minimum standards, the NES allow many issues to be addressed in awards and agreements. Modern awards provide for minimum wages, which explains their absence from the NES.
The NES establish minimum conditions in the following areas:
- maximum weekly hours of work;
- requests for flexible working arrangements;
- parental leave and related entitlements;
- unpaid family and domestic violence leave;
- annual leave;
- personal / carer’s leave and compassionate leave;
- community service leave;
- long service leave;
- public holidays;
- notice of termination and redundancy pay; and
- the Fair Work Information
The current national minimum wage in Australia is $19.84 per hour or $753.80 per 38-hour week, effective from 1 July 2020. Modern Award wages also increased by 1.75% from 1 July 2020 within certain industries, and will increase by 1.75% for all other industries on either of 1 November 2020 or 1 February 2021.
All Australian employers must also pay superannuation under the Superannuation Guarantee (Administration) Act 1992 (Cth). Employers pay a percentage of the ordinary time earnings of their employees (including part-time and casual employees) who are aged over 18, and who are generally paid at least $450 (before tax) a month, into a complying superannuation fund or retirement savings account.
The current Superannuation Guarantee rate is at 9.5% for the 2019/2020 financial year. Under current legislation the rate will remain at 9.5% until 30 June 2021, and will then increase to 10% from 1 July 2021, and then increase by 0.5% increments each year until it reaches 12% by 1 July 2025.
Maximum Working Week
The law provides that employees are entitled to a 38-hour week, subject to reasonable additional hours.
Assessment of whether additional hours are “reasonable” involves factors which include the employee’s remuneration, patterns of work in the industry, and the nature of the employee’s role. As previously mentioned, all employees covered by an Award, enterprise agreement or registered agreement may also be entitled to a higher pay rate and additional allowances when working on weekends, public holidays, overtime, early in the morning and/or late at night or in difficult or unpleasant circumstances.
Request for Flexible Working Arrangements
Recent amendments to the NES expand the categories of employees who may request flexible work arrangements to include:
- employees who are parents, or have responsibility for the care of a child who is of school age or younger;
- employees who are parents, or have responsibility for the care of a child who is disabled;
- employees who are carers within the meaning of the Carers Recognition Act 2010 (Cth), such as carers of people with medical conditions, disabilities, mental illnesses or the elderly, with the exception of people who are acting as carers under contracts of service, as volunteers, or as part of an education requirement;
- employees who have a disability;
- employees who are aged 55 years or older; and
- employees who are experiencing domestic violence or providing care or support to another member of their family/household who are experiencing domestic violence.
An employee returning to work after a period of leave in relation to the birth or adoption of a child may also request to work part-time.
An employee is not entitled to make such requests unless — in the case of a full-time and part-time employee — they have completed at least 12 months of continuous service, or — in the case of a casual employee — they have been employed as a casual on a regular and systematic basis during a period of at least 12 months and have a reasonable expectation of continuing employment on that basis.
The employer may refuse the request only on “reasonable business grounds”. “Reasonable business grounds” include:
- the excessive cost of accommodating the request;
- the incapacity to rearrange the working arrangements of other employees in order to accommodate the request;
- the impracticality of reorganising the working arrangements of other employees or recruiting new employees in order to accommodate the request; and
- the adverse impact of accommodating the request on efficiency, productivity or customer service.
An employer must provide an employee with details of the reasons for refusing any request.
Whilst a court order cannot be made in relation to an employer’s refusal of a request for flexible working arrangements, the FWC may, upon application by a party, deal with the issue if the parties have agreed in a contract of employment, enterprise agreement or other written agreement that the FWC can do so.
Notice of Termination and Redundancy Pay
Notice must be given in writing, on a date before that of the termination. Though minimum periods of notice to be given by the employer are set out in legislation and modern awards, enterprise agreements and contracts of employment may also include terms specifying periods of notice to be given by the employer.
The NES confers a statutory entitlement to redundancy pay on employees. An employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated:
- at the employer’s initiative, because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or
- because of the insolvency or bankruptcy of the
However, a person’s dismissal will not be considered to be a case of “genuine redundancy” if it would have been reasonable in all of the circumstances for the person to be redeployed within the employer’s enterprise or the enterprise of an associated entity of the employer. Whether redeployment of an employee is considered reasonable will depend on the circumstances that exist at the time of the dismissal, including the availability and nature of such a position, the qualifications required and the skills and qualifications of the employee, and the location of the job. The employee will be entitled to make an unfair dismissal claim it if is found on the balance of probabilities that it would have been reasonable in all the circumstances to redeploy the dismissed employee and the employee was made redundant instead.
The amount of redundancy pay is calculated using the employee’s base rate of pay and is a product of the number of years of continuous service that the employee has rendered to the employer. Employees may also have redundancy entitlements arising from their contracts of employment or specific redundancy entitlements outlined in their award.
Small business employers (those with fewer than 15 employees) are exempt from redundancy pay obligations, and a modern award may include terms specifying other exemptions.
Fair Work Information Statement
The NES requires employers to provide their employees with the “Fair Work Information Statement” prepared by the FWO. The Statement includes information on such matters as right of union entry, termination of employment and the NES themselves.
Modern Awards and Enterprise Agreements
An award is a legal instrument that operates with the force of legislation and imposes obligations on employers in relation to minimum wages and conditions of employment for employees in an industry or occupation. Awards cover conditions, which include rates of pay, penalty rates, overtime and allowances. Awards apply in addition to the NES (see paragraphs below).
In recent years, the award system in Australia has undergone a process of award modernisation. This resulted in the replacement of thousands of awards in Australia by a system of 122 modern awards, which came into effect on 1 January 2010.
Modern awards apply to most employees and employers in the federal workplace relations system. Each modern award covers an industry and/or occupation. Most employees, other than senior employees, who work in an award covered industry or occupation will be covered by that award.
In accordance with s 156 of the Fair Work Act 2009 (Cth), the FWC was required to review all modern awards every four years. In 2014, the FWC commenced its first review of modern awards. This review remains on foot, however, the FWC has already made some decisions, including on issues with respect to annual leave and, in particular, on terms dealing with (i) cashing out of annual leave; (ii) electronic funds transfer and paid annual leave; (iii) granting annual leave in advance; and (iv) excessive annual leave.
The FWC was due to commence its second review of modern awards in January 2018, however Parliament passed the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017, providing for the repeal of the requirement for the Commission to conduct 4 yearly reviews of modern awards. The Commission released a statement on 2 January 2018 confirming that it will not commence until the current review has been completed and parties have been given an opportunity to consider how the recently reviewed modern awards are operating in practice.
Enterprise agreements provide for the employment conditions between an employee or group of employees and an employer. Whereas modern awards provide for minimum conditions for an industry or occupation, enterprise agreements provide for specific conditions for one workplace, and are negotiated by the employer and its employees or union representatives directly. Once approved by the Commission, enterprise agreements are legally enforceable.
Where an enterprise agreement applies, it will override any otherwise applicable modern award. The enterprise agreement cannot, however, provide for a pay rate that is less than the pay rate in the applicable modern award.
Employer’s Obligation to Provide a Healthy and Safe Workplace
Employer’s Obligation to Provide a Healthy and Safe Workplace
Historically, occupational, health and safety laws have largely been a matter for each State and Territory. This split created difficulties for governments, businesses and individuals who operated in more than one state or territory.
Accordingly, there has been a move towards the national harmonisation of occupational health and safety laws. The harmonisation scheme comprises template legislation agreed to in consultation between adopting states (the Model Work Health and Safety Act (“Model Laws”)), regulations (the Model Work Health and Safety Regulations (“Model Regulations”)) and the Model Codes of Practice (“Codes”). It is intended that each jurisdiction adopt the Model Act, Model Regulations and Codes. With the exception of Victoria and Western Australia, the Commonwealth and all other states and territories have adopted the scheme.
Unfortunately, a number of the enacting states have departed from the original templates such that although the legislation operating in the different states and territories is similar, it is not uniform.
For example, in June 2020, the state of Queensland introduced the new criminal offence of “industrial manslaughter” into its version of the legislation. Such offences do not appear in the Model Laws and do not exist in New South Wales, South Australia, Western Australia, Tasmania, the Northern Territory and the Australian Capital Territory.
The scheme provides scope for some differences between jurisdictions. For example, under the scheme, each jurisdiction is responsible for enforcement and has its own occupational health and safety regulatory body.
The harmonised laws impose a primary duty of care on persons conducting a business or undertaking, in relation to the work being performed in that business or undertaking. This obligation reaches beyond employers, to a wider group of legal entities and individuals. The obligation also extends beyond employees to any person performing work.
The primary duty is to ensure, so far as is reasonably practicable, the health and safety of workers while the workers are at work in the business or undertaking. The primary duty is also to ensure, so far as is reasonably practicable, that the health and safety of other persons is not put at risk from work carried out as part of the conduct of the business or undertaking. The primary duty of care also contains some expressly listed key obligations, for example, the provision and maintenance of a work environment that is without risks to health and safety.
The harmonised laws also impose health and safety duties on officers, workers and other persons at the workplace. Officers have a duty to exercise due diligence to ensure that the person conducting the business or undertaking complies with its duties or obligations. Workers and other persons at the workplace have the duty to take reasonable care for their own health and safety and the health and safety of others from their own actions, and to cooperate with persons conducting the business or undertaking to comply with the laws.
To begin with, all workplace incidents must be recorded in a register of injuries and investigated within the workplace. The internal investigation, including the outcome, all work changes or risk controls put in place as a result, and communications to workers should be documented.
If confronted with a workplace health or safety issue or incident that is not effectively resolved within the workplace, a report should be made to the state WH&S body to assess the issue and commence an investigation, if need be.
If a serious incident occurs, the WH&S body should be contacted immediately, or penalties will apply under the Model Laws.
When a serious incident has occurred, the WH&S body may send inspectors to carry out investigations to determine exactly what caused the incident, the lessons learnt to improve workplace safety and prevent injuries and what action may be warranted. Under the Model Laws, the state WH&S body has the ability to undertake regular site inspections of a workplace, implement improvements, and enforce prohibitions, penalty notices and enforceable undertakings to ensure the health and safety of workers. Inspectors also have both general and specific powers to enter workplaces and require production of documents to inspect and examine, at any time.
WH&S bodies can also commence prosecutions under the Model Laws and the relevant state Criminal legislation against individuals, employers or businesses who have breached WHS laws. A person can specifically request a prosecution if they believe a serious offence under the Model Laws has occurred, and a prosecution has not yet occurred in the six months (but no later than 12 months) following the incident.