Proposed National Employment Standards - an overview

Analysis

Proposed National Employment Standards - an overview

The Federal Government recently issued a discussion paper on the ten matters that will be referred to as the National Employment Standards (NES). Here is an overview of the proposed standards.

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The Federal Government recently issued a discussion paper on the ten matters that will be referred to as the National Employment Standards (NES). Here is an overview of the proposed standards.

The Government has created a Business Advisory Group and a Small Business Working Group that will work with the Government on the drafting of the substantive workplace relations legislation to be introduced later this year.

The discussion paper provides details about the ten conditions of the NES. The current draft proposals for the NES are subject to change; however, it is expected the majority of the provisions will eventually become law.

The Government will consider the submissions received and may make amendments to the NES or address any unintended consequences arising from the draft proposal.

The finalised NES will be provided to the Australian Industrial Relations Commission (AIRC) to assist it with the preparation of new awards.

This article looks at the specific matters covered under the NES and its scope. Future articles will summarise the detail of each of the matters under the NES.

All federal employees covered

The proposed NES comprise minimum conditions applicable to all employees covered by the federal system when the NES commences on 1 January 2010.

The extent of coverage of the NES will be finalised in the context of the Government’s workplace relations reforms.

The NES will be legislated minimum entitlements that cannot be excluded or modified to the detriment of an employee by a contract of employment or another industrial instrument (such as an award or workplace agreement).

Safety net - employment conditions

The proposed safety net of employment conditions will be in two parts:

  1. ten National Employment Standards (NES) in legislation - which will apply to all employees

  2. awards that may provide industry-relevant detail and conditions greater than the NES, and may contain up to a further ten minimum standards that can be tailored to the industries and occupations to which they apply.

The NES

The proposed NES will provide minimum entitlements for all employees in the new system. This means the minimum entitlements cannot be excluded or modified to the detriment of an employee by a contract of employment or another industrial instrument (such as an award or workplace agreement). It is open for an employer to offer an employee, by way of contract or agreement, entitlements that are more generous than those contained in the NES.

The matters dealt with by the NES are:

  • maximum weekly hours of work
  • requests for flexible working arrangements
  • parental leave (and related entitlements)
  • annual leave
  • personal/carer’s leave and compassionate leave
  • community leave
  • long service leave
  • public holidays
  • notice of termination and redundancy pay
  • fair work information statement.

Minimum wages will be protected by awards and in a manner that ensures all employees have the benefit of a minimum wage.

Interaction with new awards

New awards will be created by the AIRC over the period leading up to 1 January 2010. These new awards will commence operation on 1 January 2010 at the same time as the NES. New awards are intended to compliment the NES.

They will contain minimum terms and conditions of employment for particular industries and occupations in relation to ten matters including minimum wages, penalty rates, overtime and allowances.

These new awards may also contain terms that relate to matters contained in the NES. An award may contain machinery on how NES entitlements can operate, eg a rule that enables an employee to take double the period of annual leave at half pay by agreement with the employer.

More beneficial entitlements

A new award may provide entitlements greater than the NES, eg 15 days personal/carer’s leave (ten days proposed under the NES).

A new award may also deal with a matter that could otherwise be seen as modifying or excluding an employee’s NES entitlement, eg a provision about the cashing out of annual leave or directing employees to take annual leave in particular circumstances (such as a Christmas close-down period).

Not permitted

A new award may also cross-reference the provisions of the NES but the AIRC must not include a term in an award where the substance of the matter is dealt with under the proposed NES, eg there would be no scope for the AIRC to include recreation leave in an award because paid annual leave is already included in the NES. The AIRC could only build on the annual leave entitlement as a term of the award, eg six weeks annual leave.

Non-award employees

Certain types of employees may not be covered by an award on and from 1 January 2010. Those not covered by awards include:

  1. employees, such as managerial employees who, because of the nature or seniority of their role, have traditionally been award-free

  2. high income employees (proposed to be over $100,000 pa) who negotiate with their employer about their terms and conditions of employment under the new workplace relations system

  3. employees who, because they work in an emerging industry or occupation, do not fall within the scope of an award but who perform work of a similar nature to work that has historically been regulated by awards in Australia.

Application of NES to non-award employees

Consideration needs to be given to the best way of ensuring that the proposed NES operate effectively for those employees under (a) and (b). One approach proposed may be to have a set of specific ‘default’ rules included in the legislation for these employees. Employees under category (c) may be covered under a ‘catch-all’ award made by the AIRC. That award would have interim operation until a new award was made.

WorkChoices Standard, etc

Currently, the WorkChoices Standard and other minimum entitlements under the Workplace Relations Act provide minimum entitlements to non-award employees on the following matters:

  • federal minimum wage
  • maximum weekly working hours
  • annual leave
  • personal/carer’s leave including compassionate leave
  • parental leave
  • minimum periods of notice of termination by the employer and public holidays.


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