Minimum terms and conditions of employment

A. Introduction

It is important to remember that the common law employment relationship is subject to the requirements of fair work legislation and applicable industrial awards. The relationship may also be affected by enterprise agreements (which have the power under legislation to modify particular award provisions which would otherwise apply).

Minimum terms and conditions of employment for virtually all private sector employees are now contained in the Fair Work Act. All employment agreements (whether written or unwritten) are subject to the safety net of minimum conditions contained in the National Employment Standards which are part of the Fair Work Act.

The National Employment Standards include general employment conditions such as ordinary hours of work, annual leave, personal leave and parental leave. These basic entitlements cannot be overridden by any form of agreement.

Modern industrial awards play an important role in the workplace relations system and common law contracts must also be read subject to any applicable modern award.

Minimum terms and conditions can vary depending on the type of employment. Employees can be engaged on a full-time basis, part-time basis or casual basis. It is necessary to appropriately identify and monitor the nature of the relationship because there can be important variations in entitlements and conditions (such as overtime, leave and loadings).

CASE EXAMPLE

CASUAL EMPLOYMENT – ROOSTERS CANNOT BE CALLED DUCKS

Yasmin S.B. Cetin AND Ripon Pty Ltd t/as Parkview Hotel,Australian Industrial Relations Commission

The Full Bench said that the words “casual employee” have no settled meaning and need to be considered in light of the facts of each case. Informality, uncertainty and irregularity of an engagement are indicative of casual employment. Conversely, regular and systematic engagements with a reasonable expectation of continuing employment are not. Here, the applicant was working 4 shifts per week regularly, she was expected to turn up on each of these shifts and she was obliged to give notice if she could not work. Minor fluctuations in her hours were due to fluctuations in the restaurant’s closing time. The Full Bench said that the nature of a position attributed by an award and adopted by the parties was not conclusive evidence but depended on the facts. The Full Bench adopted the statement in a prior case that the parties cannot create something which has every feature of a rooster, but call it a duck and insist that everybody else recognise it as a duck. The Full Bench allowed the appeal, ruled that the applicant was not denied from claiming unfair dismissal and referred the matter for conciliation.

So, it is firstly necessary to consider the basis on which a worker is employed in considering minimum terms and conditions.

B. Minimum terms and conditions

The National Employment Standards contain rules about:

  • Maximum weekly hours;
  • Parental leave;
  • Flexible work;
  • Annual leave;
  • Personal/carers/compassionate leave;
  • Community service leave;
  • Public holidays;
  • Termination/redundancy;
  • Long service leave; and
  • Provision of Fair Work statements to new employees.

Maximum weekly hours

Under the NES, maximum ordinary weekly hours are 38 hours plus reasonable additional hours. Ordinary hours can be averaged over a period of up to 26 weeks. The criteria for determining the reasonableness of additional hours include:

  • Workplace health and safety;
  • Family responsibilities;
  • Needs of the workplace;
  • Notice of the additional hours; and
  • Level of responsibility of the employee.

Parental leave

The basic rules are that:

  • There is up to one year of unpaid leave for each parent;
  • One parent may request an additional one year of unpaid leave;
  • The employer can only refuse requests for additional leave on reasonable business grounds;
  • A pregnant employee has a right to request a transfer to a safe job, or be paid “no safe job” leave; and
  • There is a “return to work guarantee” to return to the same position held prior to parental leave.

Employers should also note that a paid parental leave scheme commenced on 1 January 2011 which providesa government funded scheme for employees to take 18 weeks paid parental leave at the federal minimum wage rate.

Requests for flexible working arrangements

Under this standard, an employee can request a change in working arrangements if they require flexibility because they:

a. are the parent, or have responsibility for the care of, a child who is of school age or younger;

b. are a carer (as defined by legislation);

c. have a disability;

d. are 55 or older;

e. are experiencing violence from a member of their family; or

f. provide care or support to a member of their immediate family or household, who requires care or support because they are experiencing violence from their family.

If an employee is the parent of a child or has responsibility for the care of a child and is returning to work after taking parental or adoption leave, the employee may request to return to work on a part-time basis to help them care for the child.

Possible types of flexible working arrangements may include a temporary reduction in hours, non-standard start or finish times, working from home, working split shifts or job sharing arrangements.  Full time and part time employees are not entitled to mkae the request unless they have completed at least 12 months continuous service with the employer.  For casual employees to be entitled, they must be a long term casual employee (i.e. with at least 12 months service) and have a reasonable expectation of continuing systematic and regular employment.

Requests must be in writing and set out the details of the change sought and the reasons.  The employer must give a written response within 21 days with their decision on the request and if it is a refusal, must state the reasonable business grounds relied on.  The Fair Work Commission can resolve disputes between an employer and employee about a request but only where both parties consent or there is a specific provision in an employment agreement, enterprise agreement or award.  However, an unreasonable refusal may also lead to a claim of unlawful discrimination being made.

Annual leave

Full time employees are entitled to 4 weeks paid leave per year (pro rata for part timers) and shift workers are entitled to 5 weeks annual leave. There is no automatic leave loading and it is calculated at the employee’s base rate of pay.

In certain circumstances, an employee may “cash out” annual leave with their employer’s agreement subject to keeping a 4 week balance and having a written agreement for each occasion.

Personal/carers/compassionate leave

Full time and part time employees receive 10 days paid personal/carers leave per year. They also receive:

  • An additional 2 days unpaid carer’s leave where a member of their immediate family or household suffers an injury or illness; and
  • An additional 2 days paid compassionate leave for injury or illness causing a serious threat to the life of an immediate family or member of their household, or the death of an immediate family or household member.

Immediate family is defined to include a spouse and the parents, children, grandparents, grandchildren and siblings of an employee or the employee’s spouse. There is no real definition as to who is a household member.

Employees can be required to provide evidence but this is limited to “evidence that would satisfy a reasonable person”.

An employee may cash out personal/carer’s leave but only if it is allowed in an award or enterprise agreement. This is subject to the employee keeping a 15 day balance of personal/carer’s leave and there being a written agreement on each occasion.

Community service leave

A formal entitlement has been included to allow employees to take unpaid leave to participate in voluntary emergency management activities, including travel and rest time. There is also provision for paid leave for jury service, subject to certain conditions.

Public holiday entitlements have been included in the NES. Public holidays are to be paid at the employee’s base rate of pay. Employers may ask employees to work on a public holiday but an employee can refuse on reasonable grounds.

Notice of termination of employment

The standard sets out the minimum period of notice to be given to employees on termination of employment:

Period of employee’s serviceRequired period of notice
Not more than 1 yearAt least 1 week
More than 1 year but not more than 3 yearsAt least 2 weeks
More than 3 years but not more than 5 yearsAt least 3 weeks
More than 5 yearsAt least 4 weeks

PLUS 1 week if employee is over 45 years and has completed 2 years continuous service.

There are exemptions from this requirement for casual employees and in the event of serious misconduct. It is important to note that these are minimum requirements only and are subject to the employment contract/policies and unfair dismissal requirements.

Redundancy

For the first time, compulsory redundancy pay has been included as a basic condition for all employees from 1 January 2010.  Redundancy occurs when an employer no longer requires a particular job to be done. This means that all duties of a position cease or the duties are distributed amongst existing employees.

There is an entitlement to up to 12 weeks redundancy pay for all employees regardless of whether they are covered by an award or not.

There are exemptions for small business employers (basically those with less than 15 employees) and employees with less than 12 months service.

Long service leave

This standard simply refers to the existing entitlements to long service leave according to various state legislation. However, it is expected that uniform national long service leave legislation will be introduced in coming years.

In Queensland, full time employees become entitled to 8.6667 weeks of long service leave after 10 years of service. Part time and long term casual employees are also entitled to accrue a proportional long service leave entitlement, calculated on their actual hours of service. More information is available at www.justice.qld.gov.au/

If an employee’s employment is terminated after at least seven years service but before reaching 10 years service, they may be entitled to a pro rata long service leave payment if:

  • The employee’s service is terminated by their death;
  • The employee terminates their service because of their illness or incapacity or because of a domestic or other pressing necessity;
  • The employer dismissed the employee for a reason other than the employee’s conduct, capacity or performance; or
  • The employer unfairly dismisses the employee.

Information in the workplace

Lastly, there is a requirement for all new employees to be given a Fair Work Information Statement at the commencement of employment.

Further information about minimum entitlements can be obtained from www.fwc.gov.au or www.fairwork.gov.au