Transitional arrangements, the NES and employment entitlements

Analysis

Transitional arrangements, the NES and employment entitlements

With the introduction of the National Employment Standards from 1 January 2010, employers may be unsure of the impact the new arrangements will have where an employee has already availed themselves of an employment entitlement, or is about to apply for an entitlement covered by the NES.

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With the introduction of the National Employment Standards (NES) from 1 January 2010, employers may be unsure of the impact the new arrangements will have where an employee has already availed themselves of an employment entitlement, or is about to apply for an entitlement covered by the NES.
 
This is particularly the case for those entitlements where there is a process required to be undertaken by an employee to qualify for the entitlement, eg parental leave. Similarly, the effect of the NES requires clarification when a more beneficial entitlement comes into effect and an employee is already absent on leave (such as parental leave) when the NES is introduced.
 
This article explains the effect the transitional arrangements will have on existing entitlements and arrangements.
 
Workplace Relations Act continues
 
Although one of the features of the Fair Work Act is the introduction of the NES, the NES does not become operative until 1 January 2010. Because of this hiatus, the Fair Work (Transitional and Consequential Amendments) Act 2009 (TA Act) provides that certain provisions prescribed by the Workplace Relations Act will continue to apply until the introduction of the NES.
 
This includes the minimum entitlements prescribed under the Australian Pay and Conditions Standard, ie annual leave, personal/carer’s leave (including compassionate leave), parental leave, and maximum weekly number of hours, while the entitlements to minimum periods of notice of termination of employment by the employer, public holidays, meal breaks, and parental leave to state-based employers will also continue to apply until 1 January 2010.
 
The provisions of the Standard will continue to be part of the ‘no-disadvantage test’ for the purposes of certifying a collective agreement under the Fair Work Act, until the introduction of the applicable modern award and the NES.
 
Parental leave — a special case
 
While most of the transitional arrangements detailed in the TA Act do not result in any change to current employment provisions, the transitional arrangements with respect to parental leave may be significant for some employers and employees.
 
From 1 January 2010, an employee will be able to request an adjustment to the period of parental leave up to a maximum of 24 months. This applies to employees who may already be absent on unpaid parental leave. Schedule 4 Item 7 of the TA Act states that if an employee … continues on leave under the NES, the employee is entitled to adjust any of the following consistent with the NES:
  • the amount of leave the employee is taking or will take
  • the time at which the leave is taken
  • the arrangements for taking leave.
 
This means that an employee, from 1 January 2010, will be able to request an adjustment to the amount of parental leave up to a maximum of 24 months (currently 12 months under the Standard).
 
This will affect those employers whose employees are employed under an industrial instrument that does not contain ‘family provisions’, which usually provides a period of parental leave of up to 24 months. ‘Family provisions’ are common in many pre-reform federal awards and are prescribed in all NSW NAPSAs.
 
The NES does allow an employer to refuse an employee’s request for additional parental leave where there are ‘reasonable business grounds’ for doing so.
 
Transitional arrangements and the NES — points to note
 
Here are some points to note on the impact of the NES in relation to employee entitlements that exist under transitional arrangements and entitlements that do not commence until 1 January 2010:
 
No double entitlement: If, before the NES commencement day, the employee has already had the benefit of an entitlement, the amount of which was calculated by reference to a period of service, this does not result in that period of service being counted again when calculating the employee’s entitlements of that kind under the NES. For example, an employee employed under a federal award that provides for long service leave would not be required to work an initial qualifying period of service for long service leave.
 
Non-accruing entitlements — service prior to NES: An employee’s service with the employer before the Fair Work safety net provisions commencement day counts as service for the purpose of determining the employee’s entitlements under the NES, other than entitlements to annual leave and personal/carer’s leave.
 
Accruing entitlements: The NES provides minimum conditions of employment that are based on an employee’s continuous service with their employer, either with respect to the accrual of leave or service that qualifies an employee for a form of leave. These employment conditions include annual leave, personal/carer’s leave, parental leave, redundancy pay, and notice of termination of employment by the employer. Generally, service with an employer prior to the commencement of the NES and modern awards will be recognised for the purposes of total service after 1 January 2010.
 
Community service leave: An employee may, on or after 1 January 2010, be absent from his or her employment on community service leave even if the period of absence began before that day.
 
Notice of termination: The notice of termination provisions under the NES only apply to terminations of employment occurring on or after 1 January 2010. A termination that takes place prior to 1 January 2010 is subject to the notice provisions provided under the Workplace Relations Act Standard.
 
Redundancy pay: The redundancy pay provisions of the NES only apply to terminations of employment that occur on or after 1 January 2010, even if notice of the termination was given before that day.
 
Transfer of employment: References to a transfer of employment in provisions of the NES do not cover a situation where the employee became employed by the second employer at a time before 1 January 2010.
 
Fair Work Information Statement: The obligation under the NES for an employer to give an employee the Fair Work Information Statement only applies to an employee who starts employment with the employer on or after 1 January 2010.
 
Source: Paul Munro, IR Consultant.
 
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