NES summary

The National Employment Standards (NES) provide minimum conditions for the majority of Australian workers from 1 January 2010. The NES applies to all employees employed by an incorporated commercial trading business (i.e. a constitutional corporation). The minimum entitlements under the NES are summarised here.

The National Employment Standards (NES) provide minimum conditions for the majority of Australian workers from 1 January 2010. The NES applies to all employees employed by an incorporated commercial trading business (i.e. a constitutional corporation).
 
The NES conditions override any provisions in an existing agreement or modern award that prescribe a less beneficial entitlement than the NES. The NES operates in conjunction with modern awards and enterprise agreements and cannot be excluded from those industrial instruments. Modern awards and enterprise agreements are allowed to include terms that are ancillary or incidental to the application of the NES, or supplement the NES, provided the terms are not detrimental to an employee compared to the NES.
 
The NES apply to all employees of national system employers. There is no ‘high income’ exclusion in this respect.
 
NES minimum entitlements
 
The NES are made up of 10 minimum employment conditions. Some aspects of the NES are comparable to the minimum standards under the previous legislation (eg annual leave). However, the NES expand the range of employer obligations towards employees. Notable among these new standards are those concerned with redundancy pay, parental leave and the right of working parents to request flexible working arrangements.
 
The NES are minimum provisions that may be bettered by provisions in modern awards. The NES should be read in conjunction with the applicable modern award.
 
Detailed explanations of the NES are contained in the Employment Topics A-Z
 
The minimum entitlements under the NES are:
 
1. Hours of work the maximum weekly hours which a full-time employee can be required to work is 38 plus reasonable additional hours. An employer and an award/agreement-free employee also may agree in writing to averaging hours of work over a maximum period of 26 weeks. Modern awards and enterprise agreements may also include terms regarding averaging hours of work over a specified period.
 
2. Requests for flexible working arrangements an employee who has responsibility for a child under school age may request a change in working arrangements to assist the employee to care for the child. This entitlement only applies to an employee with at least 12 months continuous service with the employer or, in the case of casual employees, to long term casual employees who have a reasonable expectation of continued employment with the employer. An employer is entitled to refuse an employee’s request for flexible working arrangements on reasonable business grounds but must provide written reasons for such a refusal.
 
3. Parental leave An employee is entitled to 12 months unpaid parental leave, i.e. maternity, paternity or adoption leave, provided the employee has completed at least 12 months continuous service with the employer. An employee may also extend the leave period by an additional 12 months unpaid parental leave (total of 24 months) under certain circumstances. Such extension may only be refused on reasonable business grounds.
 
Note that paid parental leave is a governement funded benefit and relevant conditions differ in certain respects from those relating to unpaid parental leave.
 
4. Annual leave A permanent employee (full-time or part-time) is entitled to the equivalent of 4 weeks paid annual leave for each completed year of service with the employer. Leave effectively accrues on a month to month basis and can be taken once accrued, as agreed with the employer.

Continuous shift workers are entitled to 5 weeks annual leave each year (pro rata for an incomplete year).
 
A part-time employee is entitled to a proportionate amount of leave based on their ordinary hours, while there is no entitlement to annual leave for casual employees. Annual leave accrues month to month and accumulates if it is not taken. An employee does not have to wait 12 months before being able to take any accrued annual leave.
 
The NES allows an ‘award/agreement-free’ employee to enter into an agreement to cash out a portion of their annual leave. The employee will need to have at least 4 weeks annual leave remaining after the cashing out of leave has occurred. [space]An employee is to be paid at their ‘base rate of pay’ for the period of annual leave, but modern awards often provide for ‘ordinary pay’ and the award provision would prevail..
 
Cashing out The applicable modern award or enterprise agreement may contain a term that allows cashing out of annual leave, but if there is no award/agreement provision, cashing out is not permissible. Any cashing out provisions in a pre-Fair Work agreement continue subject to the provisions of the NES.
 
Under s.94 of the FWAct, an employer and an award/agreement-free employee may agree to the employee cashing out a particular amount of the employee’s accrued annual leave. The employee must have a minimum credit of 4 weeks annual leave after the cashing out has occurred. Each agreement to cash out must be a separate agreement in writing.
 
5. Personal/carer’s leave and compassionate leave a full-time employee is entitled to 10 days paid personal/carer’s leave for each year of continuous service with the employer and up to 2 days paid compassionate leave for each occasion where a member of an employee’s immediate family or household dies or has an illness or injury that poses a serious threat to his or her life. Personal leave accrues on the basis of the employee’s ordinary hours of work and can be taken at any time subject to the employee providing reasonable evidence to the employer, on the employer’s request.
 
In addition, all employees (including casual employees) have an entitlement to take two days unpaid carer’s leave when a member of an employee’s family or household (as specified in the legislation) requires care or support because of illness, injury or unexpected emergency.
 
6. Community service leave (including jury service) an employee is entitled to take unpaid leave to engage in designated community service activities, such as a voluntary emergency management activity. In addition, permanent employees who take leave to provide jury service will be entitled to “make up pay” for a period of up to 10 days. The make up pay represents the difference between the amount an employee receives for attending jury duty and the base rate of pay for his/her ordinary hours of work.
 
7. Public holidays an employee is entitled to a paid day off when a designated public holiday falls on a day the employee is ordinarily required to work. An employee can 'reasonably refuse' to work on a public holiday. Penalty rates for work on a public holiday are determined by the applicable modern award or agreement.
 
The prescribed public holidays under the NES are: 1 January (New Year’s Day), 26 January (Australia Day), Good Friday, Easter Monday, Anzac Day, the Queen’s Birthday holiday (as determined by the relevant state or territory government), 25 December (Christmas Day) and 26 December (Boxing Day), plus any other day or part-day proclaimed as a holiday by a state or territory government for the state or territory or a region.
 
8. Termination of employment
 
Notice of termination the employer must give a minimum period of notice of termination, based on the employee’s period of continuous service with the employer. The maximum period of notice is 5 weeks, for employees who have completed 5 years service or more and who are aged over 45 years.
 
All employees in Australia are entitled to this minimum period of notice - whether covered in other respects by Fair Work legisaltion or not.
 
Redundancy pay the NES also provides an entitlement of up to 16 weeks redundancy pay, based on the length of the employee’s continuous service with the employer. The redundancy pay obligations do not apply to an employer who employs less than 15 employees at the time a redundancy occurs. An employer can apply to vary the amount of redundancy pay if it unable to pay the amount (and this is established to the satisfaction of the Fair Work Commission) or if it obtains other acceptable alternative employment for the employee.
 
9. Long service leave in most cases, long service leave will continue to be provided by the relevant state or territory long service leave legislation. This is a transitional arrangement until a national long service leave standard is developed. State or territory law does not apply to an employee whose entitlement to long service leave is derived from a pre-Fair Work award or agreement that continues under transitional arrangements.
 
10. Fair Work Information Statement — employers are required to issue a Fair Work Information Statement to all new employees as soon as practicable after commencing employment. The Statement includes information about the NES, modern awards and agreement-making under the Fair Work Act and is published by Fair Work Australia. The Statement does not need to be provided to existing employees employed prior to 1 January 2010.

 

 

 

 

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