National Employment Standards – The Ten Commandments

The National Employment Standards (‘NES’), contained in the Fair Work Act 2009, comprise 10 national minimum employment entitlements which will apply to all national system employees. National system employees are defined as employees of constitutional corporations, flight crew officers, maritime and waterside workers employed within Australia and all employees in the territories.

The NES will take effect on 1 January 2010 and will apply to all national system employees, including those on workplace agreements entered into prior to 1 January 2010 that do not provide for more favourable entitlements.  Accordingly, it is vital that all employers view the NES as their 10 Commandments.

Commandment 1 – Maximum Weekly Hours

The maximum working hours for a full time employee shall continue to be 38 hours per week. An employer must not request an employee to work more than 38 hours, unless the additional hours are ‘reasonable’.

In determining whether any additional hours are reasonable, consideration must be directed toward a number of specified factors including: the employee’s health and safety, personal/family circumstances, the needs of the workplace, compensation or overtime entitlements, industry averages and the employee’s position/level of responsibility. If the hours are unreasonable, the employee is entitled to refuse to work them.

Commandment 2 – Requests for Flexible Working Arrangements

An employee who is a parent or carer for a child under school age, or who is under 18 and has a disability, shall be entitled to request an alteration in their working arrangements to assist them in caring for the child. Flexible working arrangements may include a variation of hours or change of location.

Only employees with over 12 months’ continuous service may make such a request. The application must be made in writing and detail the reasons for the requested changes. The employer may only refuse such a request on ‘reasonable business grounds’.

Commandment 3 – Parental Leave & Related Entitlements

An employee with over 12 months’ continuous service is entitled to a period of 12 continuous months of unpaid parental leave for the birth of their child or adoption of a child for whose care they are responsible. Employee couples are also entitled to 12 months of unpaid parental leave each; however only up to 3 weeks may be taken concurrently (the remainder is to be taken consecutively).

In addition, an employee who takes unpaid parental leave may request an extension for a further period of up to 12 months (i.e. up to a total period of 24 months). The employer may only refuse the request on reasonable business grounds.

At the conclusion of the leave period, the employee is entitled to return to their pre-parental leave position, or if that position no longer exists, an available position nearest in status and pay to their original position.

Commandment 4 – Annual Leave

Full time employees shall continue to be entitled to 4 weeks of paid annual leave (or 5 weeks in the case of a prescribed shiftworker).

Leave is accrued progressively throughout the year, and any leave not taken is carried over to the following year. An employer must not unreasonably refuse to allow an employee to take paid annual leave. Moreover, an employee is not considered to be on annual leave where the leave taken coincides with a public holiday.

Employees are entitled to ‘cash out’ annual leave entitlements in lieu of taking time off, provided an accrued balance of at least 4 weeks annual leave remains. Similarly, at the conclusion of employment, the employee is entitled to be paid for any untaken accrued annual leave.

The entitlement to cash out annual leave will, contrary to current legislation, enable employees covered by modern awards, as well as enterprise agreements, to cash out a portion of their annual leave.

Commandment 5 – Personal/Carer’s Leave & Compassionate Leave

An employee is entitled to 10 days per year of paid personal/carer’s leave. This leave may be taken if the employee is not fit for work due to personal injury/illness, or to care for a member of their immediate family/household because of an injury/illness or unexpected emergency.

In addition, where paid leave entitlements are exhausted, employees are entitled to 2 days of unpaid carer’s leave for each occasion that a member of their immediate family/household requires care for a personal injury/illness or unexpected emergency.

Further, an employee is entitled to 2 days of paid compassionate leave for each occasion a member of their immediate family/household develops/sustains a personal illness/injury that poses a serious threat to their life, or dies.

Commandment 6 – Community Service Leave

Employees engaging in an eligible community service shall be entitled to be absent from work, provided their absence is reasonable in the circumstances. Eligible community service activities include jury duty and defined voluntary emergency services (e.g. SES, CFA etc).

Community service leave is unpaid, except for employees on jury service, who shall be entitled to be paid for the first 10 days of their absence.

Commandment 7 – Long Service Leave

Employees are entitled to long service leave in accordance with their applicable award (currently regulated by state and territory legislation). However, the NES also serves to protect long service leave entitlements for employees on an eligible workplace agreement (including an AWA or ITEA), until a nationally uniform long service leave system is established.

Commandment 8 – Public Holidays

Employees are entitled to be absent from work on a prescribed public holiday and to be paid at the base rate for the ordinary hours they would have worked.

An employer may make a reasonable request of an employee to work on a public holiday, however, employees are entitled to refuse any such request. The reasonableness of the request shall be determined by reference to the nature and operational requirements of the workplace, the employee’s personal circumstances, entitlement to penalty rates or compensation, and the amount of notice given etc.

Commandment 9 – Notice of Termination & Redundancy Pay

An employer cannot terminate an employee’s employment unless they have provided prior written notice to the employee, advising of the day of termination.

The notice period, prescribed in the NES, increases with length of service. This ranges from 1 week for an employee who has worked for the employer for under a year, progressing to 4 weeks for an employee with more than 5 years service. An additional week of notice must be given to an employee aged over 45 with at least 2 years of service.

Employees are entitled to redundancy pay from their employer if their employment is terminated because their job/position becomes redundant, or the employer becomes insolvent/bankrupt. The length of redundancy payments is specified in the NES is reflective of the redundancy scale currently outlined in many federal awards.

However, an employer is not required to make redundancy payments if they are classified as a small business employer (i.e. less than 15 full time equivalent employees), or the employee has worked there under 1 year. Further, employers are not required to make redundancy payments to casual employees, or those employed on a fixed term or seasonal basis.

Commandment 10 – Fair Work Information Statement

The Fair Work Ombudsmen will publish a ‘Fair Work Information Statement’, which will explain the NES, as well provide information on awards and agreement making, right of entry, the right to freedom of association, and the role of the FWA and Fair Work Ombudsman.

Employers shall be required to provide new employees with a copy of the Statement upon commencement.

Click here for a Fair Work Information Statement.

Summary

The NES extend considerably upon the existing Australian Fair Pay and Conditions Standards (‘the Standards’). The NES also extends beyond the scope of the Standard in that it will apply to all employees, including those subject to pre-WorkChoices certified agreements. Accordingly, it is essential that all employers familiarise themselves with the ’10 Commandments’.

If you have any questions or concerns about how the NES will apply to your workforce, please contact one of our Workplace Relations lawyers.

Author: Katie Sweatman