Comparing National Employment Standards and WorkChoices

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Comparing National Employment Standards and WorkChoices

The changes to employment conditions that will be effected by the new National Employment Standards (NES) from 2010 are noteworthy.

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The changes to employment conditions that will be effected by the new National Employment Standards (NES) from 2010 are noteworthy. Current conditions are little changed from the WorkChoices regime introduced by the previous Government, but they will change from 2010.

The writings below compare the NES to the current WorkChoices provisions. There are necessarily areas of conjecture because critical legislation will not be introduced until later this year.

Background

After consideration of submissions from trade unions, employer groups, businesses, community organisations and individuals, the Federal Government recently announced the detail of the employment conditions that will form part of legislation to be introduced to Parliament later this year.

The legislation will also include other aspects of workplace relations that relate to the NES including compliance, interaction with agreement making and future reviews.

The Government proposes that these new Standards will be operative from 1 January 2010, not from the date the legislation is introduced (late 2008).

More detail about the NES may become available later this year when the Government introduces legislation relating to the NES and other reforms that form part of the Government’s 'Forward with Fairness' workplace policies.

The writings below identify those conditions that will change from the current provisions and areas that may still require clarification before the legislation is implemented.

The NES

The ten conditions identified in the draft discussion paper remained unchanged. These are:

  • maximum weekly hours of work

  • request for flexible working arrangements

  • parental leave and related entitlements

  • annual leave

  • personal/carer’s leave and compassionate leave

  • community service leave (including jury service)

  • long-service leave

  • public holidays

  • notice of termination and redundancy pay

  • Fair Work Information Statement

Also, here will be the facility to provide for more flexible work arrangements through the relevant modernised award.

Who is covered?

As is currently the case with the minimum employment conditions under the Workplace Relations Act, all employees of incorporated employer’s throughout Australia will be covered by the NES, including non-award employees, such as managerial and professional employees. This represents approximately 85 per cent of the Australian workforce.

Differences from WorkChoices Standard

The employment conditions under the NES that were not previously covered under the Workplace Relations Act are: request for flexible working arrangements; community service leave (including jury service); redundancy pay; and the Fair Work Information Statement.

The WorkChoices Standard covers minimum entitlements relating to: maximum weekly hours of work; annual leave; parental leave; personal/carer’s leave (including compassionate leave); public holidays; and minimum periods of notice of termination by the employer.

Long-service leave remains a condition provided primarily by the relevant State or Territory long-service leave legislation or the applicable pre-reform federal award that prescribes long-service leave.

Other provisions currently provided under the Workplace Relations Act will no longer apply to all employees from 2010.

Changes from 2010

The following changes will occur if the legislation is passed as currently proposed by the Government.

Federal Minimum Wage

The Workplace Relations Act currently provides a federal minimum wage that applies to all employees under the Act, including non-award employees. Under the new system, awards will be the source for minimum rates. This flows from the Minister of Employment and Workplace Relations issuing a variation to the award modernisation request to the Australian Industrial Relations Commission (AIRC) directing the Commission to create a modern award to cover employees who are not covered by another modern award and who perform work of a similar nature to that which has historically been regulated by awards. Therefore, minimum wages will only be provided through awards, meaning non-award employees will no longer be subject to a statutory minimum wage.

Maximum weekly hours of work

Main provisions remain unchanged, although averaging of weekly hours may only occur through a provision in an award.

The NES has added new criteria to be considered when determining whether any request by an employee for additional hours to be worked by an employee was reasonable - including the nature of the employee’s role and level of responsibility, and the usual patterns of work in the industry, although it is anticipated averaging of ordinary hours of work will be available through a collective agreement.

The situation with non-award employees appears unclear because an award seems to be the only instrument at this stage through which averaging of ordinary weekly hours can occur.

Request for flexible working arrangements

An employee who is a parent or who has responsibility for the care of a child under school age may request the employer to change the employee’s working arrangements.

Examples of working arrangements include changes in hours of work, changes in patterns of work and changes in location of work.

A full-time or part-time employee cannot make such a request to their employer unless 12 months continuous service has been completed. In the case of a casual employee, the employee has been engaged on a regular and systematic basis during a period of at least 12 months prior to the request and has a reasonable expectation of continued employment. The employer may refuse the request only on reasonable business grounds. The request must be in writing and the employer must respond within 21 days, stating whether the request has been granted or refused.

Annual leave

Annual leave remains at four weeks per year (an award can prescribe five weeks per year for shift workers), although the NES does not prescribed a formula for the calculation of pro rata annual leave on termination of employment.

Annual leave does not accrue during a period of workers compensation (unless provided for by the applicable State or Territory workers compensation legislation).

Payment for annual leave is at the employee’s base rate of pay, ie his or her ordinary pay excluding incentive-based payments or bonuses, loadings, monetary allowances, overtime or penalty rates or any other separately identifiable amounts.

Any period of other leave (personal/carer’s leave, public holidays, compassionate leave, community service leave (including jury service)) that occurs during a period of annual leave is not counted as annual leave, and does not come out of the employee’s annual leave credit.

Cashing out of annual leave may be done through an award, although no ‘cap’ on the maximum amount of leave that may be cashed out has been determined.

Also, under an award, an employee may take twice the period of annual leave on half pay. However, the NES does not appear to provide such arrangements to be available to non-award employees.

Annual leave does not apply to casual employees.

Personal/carer’s leave

The annual quantum of 10 days paid personal/carer’s leave and two days compassionate leave for each permissible occasion will remain unchanged.

However, an important change is that an employee will be paid personal/carer’s leave at his or her ‘base rate of pay’, ie ordinary pay excluding incentive-based payments or bonuses, loadings, monetary allowances, overtime or penalty rates or any other separately identifiable amounts.

Cashing out of personal/carer’s leave will be permitted under an award, although a ‘cap’ on the maximum amount that can be cashed out has not yet been determined. There are no specific requirements in relation to the type of evidence that is reasonable proof of an employee’s illness or injury.

The NES states that an award may include provisions in relation to the kind of evidence that an employee must provide to be entitled to personal/carer’s leave, compassionate leave or unpaid carer’s leave. If a period of annual leave includes a period of any other leave (other than unpaid parental leave) the employee is deemed not to be on paid annual leave for the period of that other leave.

An employee is not paid personal/carer’s leave where a public holiday or part-day holiday falls during such paid leave.

Paid personal/carer’s leave (including compassionate leave) does not apply to casual employees, although casuals have an entitlement to up to two day’s unpaid carer’s leave on each permissible occasion.

Parental leave

The NES has adopted the conditions of the ‘family provisions’ test case handed down by the AIRC in 2005, which allows an employee to extend unpaid parental leave (subject to proper notice) up to a total of 104 week.

A maximum period of three weeks may only be taken concurrently with a spouse or partner who is also absent on unpaid parental leave.

The NES has included notice provisions for situations where an employee wants to extend a period of parental leave of up to 12 months.

The NES also enables an employer to require the production of a medical certificate if an employee alleges that she needed to be transferred to a ‘safe job’ during pregnancy.

The definition of de facto under the NES now includes same-sex couples.

Parental leave applies to certain casual employees.

Community service leave (including jury service)

Community service leave comprises two types of leave, unpaid leave of absence related to an employee engaging in a voluntary emergency management activity and payment for jury service.

Previously, jury service was a condition mainly provided in industrial instruments and State legislation. The jury service payment is a ‘make-up’ pay, meaning the employer is obliged to pay the difference between the jury service payment from the court (excluding expense-related allowances) and the employee’s actual rate of pay.

This means the amount of ‘make-up’ pay required to be paid by an employer will differ depending on the jury payment fees under the relevant State or Territory law. An employee cannot claim community service leave when taking unpaid parental leave. The jury service provisions do not apply to casual employees.

Redundancy pay

Currently, this employment condition is only available under a provision of an industrial instrument.

The NES redundancy scale of payments will apply to all employers under the Workplace Relations Act who employ 15 employees (including casual employees with more than 12 months service and non-award employees) or more. The scale is as follows:

  • under 12 months continuous service - nil

  • at least one year but less than two years continuous service - four weeks pay

  • at least two years but less than three years continuous service - six weeks pay

  • at least three years but less than four years continuous service - seven weeks pay

  • at least four years but less than five years continuous service - eight weeks pay

  • at least five years but less than six years continuous service - 10 weeks pay

  • at least six years but less than seven years continuous service - 11 weeks pay

  • at least seven years but less than eight years continuous service - 13 weeks pay

  • at least eight years but less than nine years continuous service - 14 weeks pay

  • at least nine years but less than 10 years continuous service - 16 weeks pay

  • at least 10 years continuous service - 12 weeks pay

Those employees not entitled to redundancy pay include casual employees, apprentices, employees covered by an award that includes an industry-specific redundancy scheme.

Notice of termination

The minimum periods of notice of termination required to be given by an employer remain unchanged. However, an employer must give written notice of the day the employee is to be terminated (unless termination is due to the employee’s misconduct).

Notice may be given by delivering it personally, or leaving it at the employee’s last known address, or sending it by pre-paid post to the employee’s last known address.

As is currently the case under most industrial instruments, an award may provide for periods of notice required to be given by an employee to the employer.

The minimum periods of notice of termination do not apply to the following employees:

  • an employee employed for a specified task or specified period of time

  • an employee serving a period of probation or a qualifying period of employment, determined in advance

  • an employee terminated because of serious misconduct

  • a casual employee

  • a seasonal employee

  • a trainee (other than an apprentice) to whom a training arrangement applies

  • a daily hire employee in the building and construction industry

  • a daily hire employee involved in the slaughter of livestock in the meat industry

  • an employee employed in the meat industry employed whose termination is solely determined by seasonal factors.

Public holidays

The NES has added Queen’s Birthday holiday as a public holiday, and now includes any part-day holiday declared by a State or Territory Government.

In some jurisdictions, the recognition of ‘part-day’ holidays may add considerably to the number of public holidays to be observed in a workplace.

If an employee does not have ordinary hours of work on the public holiday, there is no entitlement to payment. For example, no payment is applicable to a casual employee who is not rostered to work on the public holiday, or a part-time employee whose hours of work do not include the day of the week on which the public holiday occurs.

Payment for the day (or part-day) is at the employee’s ‘base rate of pay’, ie the ordinary day’s pay excluding incentive-based payments or bonuses, loadings, monetary allowances, overtime or penalty rates or any other separately identifiable amounts.

A public holiday is paid for any public holiday that falls during a period of annual leave or personal/carer’s leave, meaning the day is not regarded as a day of annual leave or personal/carer’s leave.

An award will be able to substitute for any of the specified public holidays under the NES.

Workers compensation

The NES provides that an employee is not entitled to take or accrue any leave or absence (whether paid or unpaid) when absent on workers compensation, unless permitted by the relevant State or Territory compensation law or the applicable award. However, an employee can take unpaid parental leave during a period of workers compensation.

Meal breaks

As is currently the case with most industrial instruments, meal breaks will be an award provision rather than a statutory entitlement under the Workplace Relations Act.

Fair Work Information Statement

The Fair Work Information Statement (FWIS) is to be published by Fair Work Australia and must contain the following information:

  • the National Employment Standards

  • modern awards

  • agreement-making under the Workplace Relations Act

  • the right to freedom of information

  • the role of Fair Work Australia

The employer must give each new employee the FWIS as soon as practicable after commencing employment. An employer is not required to be give the FWIS to an employee more than once in any 12 months.

NES workplace agreements

The government has yet to clarify the interaction of the NES with the making of new workplace agreements, ie ITEAs and employee collective agreements, under the Workplace Relations Act, although it has indicated this will be addressed in the substantive legislative workplace reforms to be introduced by legislation later this year.


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