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Employment Awards and Obligation – We Answer Your Most FAQ About Your Responsibility as an Employer

Employment Law

Running a business is a challenging and exciting endeavour. However, once you expand and begin to hire employees, your legal obligations can change in an instant. As an employment lawyer, I’ve come across hundreds of clients who aren’t aware of their basic legal obligations when it comes to employment Awards and standards.

Currently in Australia, if your business employees staff, you are bound by legislations under federal, state and territory laws, industrial Awards and agreements, tribunal decisions, and any employment contracts you have in place.

The Fair Work Act 2009 (Cth) (FWA) will cover most employees working in Australia (with the exception of local government employees in some jurisdictions). In addition to the FWA, you may also be bound by Modern Awards.

Today, we will look at your most frequently asked questions about your responsibilities as an employer, and what you need to do to remain compliant.

What does the Fair Work Act actually mean for employers?

The Fair Work system is Australia’s national workplace relations system and covers the minimum employment laws required by the government. It’s intended to act as a “safety net” of entitlements for employees, and your company can be heavily penalised if you breach any of these obligations.

Fair Work system covers four key areas:

  • 10 minimum National Employment Standards
  • Awards that apply nationally for specific industries and occupations
  • The national minimum wage
  • Protection from unfair dismissal

What are the National Employment Standards?

All employees in Australia, regardless of whether they are covered by any Awards or agreements, are entitled to minimum standards that are set out in the National Employment Standards. Furthermore, Fair Work explicitly states that:

“An award, employment contract, enterprise agreement or other registered agreement can’t provide for conditions that are less than the national minimum wage or the NES.”

The 10 minimum entitlements of the NES are:

  • Maximum of 38 hours of work per week (plus reasonable additional hours)
  • Requests for flexible working arrangements
  • Parental leave and related entitlements (up to 12 months unpaid leave and the right to ask for an extra 12 months unpaid leave)
  • Four weeks paid leave per year, plus an additional week for some shift workers.
  • 10 days paid personal/carer’s leave, two days unpaid carer’s leave as required, two days compassionate leave as required and five days unpaid family and domestic violence leave (in a 12-month period)
  • Unpaid leave for voluntary emergency activities and leave for jury service, with an entitlement to be paid for up to 10 days for jury service.
  • Long service leave
  • Paid day off on a public holiday (unpaid for casuals), except where reasonably requested to work
  • Up to 5 weeks notice of termination and up to 16 weeks redundancy pay, both based on length of service
  • Provision of the Fair Work Information Statement

Furthermore, Fair Work explicitly states that:

“An award, employment contract, enterprise agreement or other registered agreement can’t provide for conditions that are less than the national minimum wage or the NES.”

For example, this means that even if your employee signs a contract agreeing to two weeks of paid annual leave, which are forfeited if not used in that year, they are still entitled to the minimum standards as set out by the NES – regardless of what they signed.

For more details on your responsibilities under the NES, speak with your lawyer or visit the Fair Work website.

What is a Modern Award?

Depending on your industry, your employees may be covered by Modern Awards. These are industry/occupation-based minimum employment standards that you must adhere to, in addition to the NES. Depending on the jobs your employees do, you may be covered by more than one award.

You can find out more about your specific obligations for your industry on the Fair Work website, but generally, Awards will provide entitlements for areas such as:

  • Pay
  • Hours of Work
  • Rosters
  • Breaks
  • Allowances
  • Penalty Rates
  • Overtime

Can the terms of an Award be varied?

If both you and your employee agree to do so, the terms of the Award can be varied. However, only certain provisions can be altered. This includes:

  • Overtime and penalty rates
  • Allowances
  • Leave loading
  • Required working hours

Furthermore, the varied conditions must leave the employee in a better position than they were under the Award, and must pass the “Better Off Overall” Test.

Are those the only obligations I need to meet?

No. As an employer, depending on which industrial relations system your business falls under, you will also be subject to equal employment laws, WHS obligations, tax and superannuation requirements, payment conditions, anti-harassment laws, and more.

More information on your obligations can be found at the Department of Industry, Innovation and Science, but we highly recommend speaking to a legal firm to ensure you are compliant in all areas.

What happens if I don’t meet my obligations as an employer?

If you fail to meet your responsibilities as an employer, you may leave yourself open to legal action from private parties and government bodies.

Most breaches of the Fair Work Act are civil issues, which means you may be penalised by the court if you have broken a workplace law. Depending on the situation, penalties may vary, but serious contraventions attract fines of up to $126,000 per contravention for an individual and $630,000 per contravention for companies.

As a business owner, it is crucial that you are aware of your legal obligations as an employer. Depending on your industry, this may become complex, so get in touch with our team today to arrange a free consultation.