Do modern awards override state and territory laws?


Do modern awards override state and territory laws?

Do the provisions contained in a modern award prevail over state or territory legislation? Paul Munro explains.


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Do the annual leave provisions contained in a modern award prevail over Northern Territory legislation?

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Q Our company has operations in most states, as well as a site in the Northern Territory.  Our question relates to an existing Northern Territory law – the Annual Leave Act [NT].

Some of our employees are covered by the Amusements, Events and Recreation Award 2010. This award doesn't prescribe an annual leave loading when an employee takes annual leave, however the Territory’s annual leave legislation provides a 17 ½ per cent annual leave loading. Does the more beneficial provision contained in the Northern Territory’s Annual Leave Act prevail over the annual leave provisions of the modern award?
A The provisions of the modern award would prevail over the Northern Territory annual leave legislation. The Fair Work Act (s26(2)(c)) specifically excludes a law of a state or territory that applies to employment generally and deals with leave (other than long service leave or leave for victims of crime). This means the minimum annual leave conditions under the National Employment Standards, and annual leave terms prescribed in the applicable modern award or enterprise agreement, apply to all employers in states and territories, including unincorporated businesses.

Note: an employer in Western Australia, whose business is unincorporated, such as a sole trader or a partnership, is not subject to the Fair Work Act. The relevant West Australian employment laws would apply, as well as any applicable state industrial instrument. 

Non-excluded State/territory industrial laws

The Fair Work Act (s27) identifies those matters prescribed by a state or a territory law that are NOT excluded by the Act and, consequently, continue to apply.

These matters are explained below.

Long service leave

While the National Employment Standards regulates long service leave terms previously provided by federal awards, the long service leave entitlements for most private sector employees are regulated by the relevant state or territory long service leave legislation. Specific entitlements to leave, such as the amount of leave and certain absences being counted as service, do differ depending on the relevant state or territory long service leave legislation. Note: the relevant state or territory long service leave legislation is considered in the better off overall test for the purpose of approval by Fair Work Australia of a proposed enterprise agreement. 

Public holidays

The National Employment Standards does not affect a state or territory public holiday law dealing with the declaration, prescription or substitution of public holidays, but excludes provisions in relation to the rights and obligations of an employee or an employer in relation to public holidays. 
This means a public holiday declared or substituted by a state or territory public holiday law is enforceable in conjunction with the provisions of the National Employment Standards. This would include any holiday or half-holiday declared for a specified region or area within a state or a territory.
A provision of a state or a territory public holiday law that provides a penalty rate for work performed on a public holiday, however, will not be valid.


Apart from the Fair Work Act, there are Commonwealth, state and territory anti-discrimination laws that prohibit discrimination, harassment, victimisation, bullying and (in some jurisdictions) vilification in various areas of public life, including the workplace. 
For example, an employee dismissed on the grounds of discrimination may seek a remedy before a Commonwealth, state or territory anti-discrimination tribunal rather than an adverse action claim to the Federal Magistrates Court. 
The laws concerning discrimination in employment are not all uniform, being scattered between Commonwealth, state and territory jurisdictions. There are two types of discrimination prohibited by legislation – direct and indirect.

Workers compensation

The Commonwealth, and each state and territory, has legislation relating to the provision of workers compensation when an employee suffers a workplace-related illness or an injury. 
While a workers compensation law regulates an employee’s entitlement to compensation and the administration of such a scheme, such a law may also prevent an injured worker’s dismissal where the reason is due to the employee’s absence on workers compensation.

A workers compensation law may also provide for the accrual of annual leave and long service leave, and the taking of public holidays that fall during an injured worker’s absence from work.

Jury service or emergency service duties

A state or a territory law that provides employee entitlements in relation to community service activities (eg jury service or volunteer emergency management activities) are not excluded and continue to apply where there is a more beneficial entitlement. 
For example, the Fair Work Act does not exclude a state or territory law that entitles a casual employee to be paid jury service pay or an entitlement to a higher level or a longer period of make-up payment from an employer when an employee is absent on jury service, for example Juries Act 2000 [Vic]. 

Work relating to essential or emergency services

While a similar provision exists under the Fair Work Act (s772(1)(h)), a state or territory law may also prohibit an employer victimising an employee in his/her employment if he/she engages in emergency service work. Examples of victimisation would include dismissal, demotion or changes to an employee’s position.

Some state emergency service laws may provide more beneficial entitlements than the National Employment Standards. For example, the respective emergency service laws in Queensland and Western Australia provide for payment by an employer of an employee’s ordinary wage for the period an employee is absent on emergency service work.

Right of entry relating to WHS, workers compensation or outworkers

Rights of entry under state or territory laws about work health and safety and outworkers continue to apply, while rights of entry under work health and safety operate subject to the requirements set out in Div 3 of Pt 3-4 of the Fair Work Act (Right of entry). 
Rights of entry under workers compensation laws are also preserved and not subject to the Act.

Child labour (employees under 18 years of age)

Child labour laws usually place restrictions on certain types of work being performed by young persons, times when a young person is prohibited from working and prohibition from employing young persons below a specified age in certain designated work. 
Such laws are usually based on principles similar to work health and safety laws. 
Child labour laws exist in the Australian Capital Territory, New South Wales, Queensland and Western Australia. 

Training arrangements

A ‘training arrangement’ means a combination of work and training that is subject to a training arrangement, or a training contract, that takes effect under a state or territory law relating to the training of employees. 
Examples of a training arrangement include an apprenticeship and a traineeship. 
Such laws usually regulate the application and approval of such an arrangement and ongoing monitoring of an employee’s progress to completing the training arrangement. 
The provisions of a state or territory training arrangement law that relate to terms and conditions of employment that are covered by the National Employment Standards, or may be included in a modern award or an enterprise agreement, do not apply and are overridden by the Fair Work Act. 

Leave for victims of crime

Legislation for victims of violent crime provides a right, to these employees, to unpaid leave to attend court proceedings in connection with the offence concerned. For example, Pt 4B of the Industrial Relations Act 1996. [NSW].

The crime may include a family member who has died as a direct result of a violent crime, or whose child or grandchild is a victim. An employee would normally be allowed to take other forms of paid leave in conjunction with this unpaid leave.

Workplace surveillance

Specific workplace surveillance legislation exists in New South Wales (Workplace Surveillance Act 2005 [NSW]) and in Victoria (Surveillance Devices (Workplace Privacy) Act 2006 [Vic]). In other states and territories, surveillance legislation is device-specific and applies more broadly than in the workplace, e.g. Listening Devices Act 1972 [SA], Surveillance Devices Act 1998 [WA] and Surveillance Devices Act 2007 [NT], so although this legislation is not workplace-specific, it would apply to many workplaces.

Business trading hours

State and territory laws exist which place restrictions on business trading hours. 
These laws usually apply to the trading hours (opening and closing times) of retail outlets, which may be state-based, or locality-based.

This means that while there are hours of work provisions under the relevant modern award, there may also be a statutory restriction on the hours during which an employer can operate for business.

Claims for enforcements of contracts, except unfair contract laws

This matter refers to claims relating to common law rights of an employee and an employer under a contract of employment. 
For example, the Fair Work Act would not prevent an employee from claiming a breach of a contract of employment before the relevant Commonwealth court, or a state or a territory Supreme Court. 
Unfair contract laws exist under several state industrial relations laws; however, a remedy cannot be pursued by an employee under these laws because they are excluded by the Fair Work Act. 

Matters relating to outworkers

State laws dealing with outworkers continue to apply. 
The term ‘outwork’ usually refers to work performed outside the employer’s premises, factory or established places of work. 
This type of work is particularly common in the clothing industry. 
The arrangements for outworkers are generally subject to the relevant state legislative regulation, in addition to the applicable modern award. State legislation regarding outworker arrangements exist in NSW, Queensland, South Australia, Tasmania and Victoria. These laws generally provide a code of ethics with respect to the employment of outworkers, although it is not normally intended to override the conditions of the relevant modern award where there is an inconsistency.

Other matters

The Fair Work Act (s27) also refers to state or territory superannuation laws, and laws regulating employee associations and employer associations.
The Fair Work Regulation 2009 also specifies those state or territory laws that are not excluded by the Act, such as:
  • a law dealing with the cancellation, suspension or termination of a training contract
  • a law dealing with the cancellation, suspension or termination of a contract of employment that is associated with a training contract and entered into as part of a training arrangement, and
  • a law dealing with a period of probation of an employee that is part of a training arrangement, but is not a period of probationary employment.
A law that provides protection for an employee who discloses information or makes a complaint under a law that deals with any of the following:
  • whistle blowers
  • environmental protection
  • health services
  • transport safety or operations
  • the supply of essential services
The Contracts Review Act 1980 [NSW] is excluded by the Fair Work Act to the extent to which it relates to contracts of employment.

The bottom line: Any employment condition regulated by the National Employment Standards or an applicable modern award or enterprise agreement would prevail over any state or territory law.

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