FAIR WORK ACT 2009
Australia has moved towards a national workplace relations system over the past decade. the Fair Work Act 2009 (Cth) (“FW Act”) now applies to almost all private sector businesses across the country, with the exception of unincorporated businesses located in the state of Western Australia (which remain covered by Western Australia’s state-based workplace relations system).
Importantly, the FW Act provides employees with ten minimum employment entitlements, known as the National Employment Standards, or “NES”. The NES provide employees with a range of guaranteed entitlements, such as paid annual leave, paid personal/carer’s (‘sick’) leave, and a maximum 38 ‘ordinary hours’ working week (plus reasonable additional hours). The NES are non-negotiable, and cannot be overridden by contract or mutual agreement between an employer and employee.
AWARDS AND ENTERPRISE AGREEMENTS
Historically, minimum terms and conditions of employment in Australian workplaces were established by the relevant tribunals via the making of ‘awards’. this unique award-based system continues to operate, and today there are over 120 different awards (now called ‘Modern Awards’) which contain additional minimum terms and conditions of employment for employees working in specific industries and occupations. Examples include the general retail industry Award and the professional employees Award. Businesses setting up shop in Australia should pay careful attention to the following three important points:
- Modern Awards apply as a matter of law and not choice or preference. employers are held legally-responsible for identifying – and complying with – any Modern Awards which apply to their employees. A failure to comply with applicable Modern Awards can result in significant penalties.
- Many ‘senior’ or ‘professional’ employees are covered by a Modern Award. It is a pervasive myth that Modern Awards only apply to ‘blue-collar’ workers, or to those paid an hourly wage as opposed to an annual salary.
- Modern Awards apply in addition to – not in place of – the NES. it is, accordingly, very important to become familiar with both the NES and any applicable Modern Awards.
In addition to Modern Awards, Australia has also adopted a system of workplace-level enterprise bargaining. this allows an employer to negotiate workplace wide collective employments with their employees, called ‘enterprise Agreements’. importantly, enterprise Agreements replace otherwise-applicable Modern Awards, must be approved by Australia’s workplace relations tribunal (the Fair Work Commission) and must not undercut the NES.
An Australian-based employee’s minimum wage will depend on whether they are covered by a Modern Award or an Enterprise Agreement or are, instead, ‘Award and Agreement-free’. Expert advice is strongly recommended.
EMPLOYMENT POLICIES AND TRAINING
Australian-based employers are not generally obliged to implement workplace policies or provide specific training to their employees. however, comprehensive policies and regular training will significantly reduce the risk of employment related claims and enhance the employer’s ability to take necessary disciplinary and performance-related action. As a minimum, we recommend all workplaces have policies in place covering:
- bullying and harassment (including sexual harassment);
- leave-related entitlements; and
- workplace health and safety.
Regular training which reinforces the rights and responsibilities associated with these topics is strongly-recommended. Australian employers routinely engage third parties to provide training.
While Australian law does not compel employers to issue employees with written employment agreements, this practice is nonetheless strongly recommended. in the absence of a comprehensive written employment agreement, an employee’s rights and entitlements will be derived from a combination of the FW Act (where applicable), any relevant Modern Award or enterprise Agreement, other state and federal statutes, and the common law. the common law may provide an employee with entitlements which are more generous than those which would otherwise apply had an employment agreement been executed.
It is important to note that employment agreements cannot impose terms and conditions which are less generous than those provided by both the NES and any applicable Modern Award or Enterprise Agreement. given the importance of ensuring agreements are compliant with all applicable laws, it has become increasingly common for Australian-based employers to engage employment lawyers to draft and review their contracts. indeed, this is one of the most common tasks undertaken here at Harmers Workplace Lawyers.