Home Information For EmployeesMinimum terms and conditions

Minimum terms and conditions of employment

 

A. Introduction

 

The common law employment relationship is subject to the requirements of fair work legislation and also to applicable modern awards/enterprise agreements.

 

Minimum terms and conditions of employment for federal system employees are contained in the Fair Work Act. All employment agreements (whether written or unwritten) and modern awards/enterprise agreements are subject to the safety net of minimum conditions contained in the National Employment Standards (“NES”) which are part of the Fair Work Act.

 

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, Vice President Ross, Senior Deputy President Duncan, Commissioner Roberts, Melbourne, 25 September 2003

The issue in this appeal was whether the employee had been engaged on a casual basis for a short period (defined as periods less than 12 months) and therefore excluded from the AIRC’s unfair dismissal jurisdiction (similar provisions exist under state legislation). The applicant was employed as a casual waitress, had worked for the employer for less than 12 months and was told that her employment was of a casual nature. The applicant initially worked behind the bar, her hours fluctuated and she had no reasonable expectation of continuing work. However, from 16 October 2002 she began working as a waitress in the hotel restaurant. She worked regular nights for between 4 and 5 hours each night due to fluctuations in the restaurant’s closing time. The applicant was paid as a casual and was never paid any annual leave, sick leave or for public holidays.

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 you have been employed in considering minimum terms and conditions.

 

B. Minimum terms and conditions

 

  1. maximum weekly hours of work;
  2. requests for flexible working arrangements for parents with children under school age or with a disability;
  3. parental leave and related entitlements;
  4. annual leave;
  5. personal/carer’s leave and compassionate leave;
  6. community service leave;
  7. long service leave;
  8. public holidays;
  9. notice of termination and redundancy pay; and
  10. the Fair Work Information statement.

 

The NES apply to all employees. Employers contravening the NES are subject to significant penalties including fines, injunctions and orders for reinstatement.

 

Here is a more detailed summary of the standards.

 

1. Maximum weekly hours

 

Maximum ordinary weekly hours of work are 38 standard hours per week for full time employees (which can be averaged over a 6 month period), unless additional hours are reasonable. Employees may refuse to work additional hours if they are unreasonable, taking into account:

 

  1. any risk to employee health and safety from working the additional hours;
  2. the employee’s personal circumstances, including family responsibilities;
  3. the needs of the workplace or enterprise in which the employee is employed;
  4. whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of, working additional hours;
  5. any notice given by the employer of any request or requirement to work the additional hours;
  6. any notice given by the employee of his or her intention to refuse to work the additional hours;
  7. the usual patterns of work in the industry, or the part of an industry, in which the employee works;
  8. the nature of the employee’s role, and the employee’s level of responsibility;
  9. whether the additional hours are in accordance with averaging terms included in a modern award or enterprise agreement or an averaging arrangement between the employer and employee under the Act; and
  10. any other relevant matter.

 

Modern awards and enterprise agreements can provide for averaging of hours over a specified period, with the average hours not to exceed 38 for a full time employee. Where there is no modern award or enterprise agreement with application, an employer and employee can agree in writing to an averaging arrangement over a maximum of 26 weeks.

 

2. Requests for flexible working arrangements

 

An employee can request a change in working arrangements to assist them to care for a child under school age of which they are a parent or for whom they have responsibility for care or for a child under 18 years with a disability.

 

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 make 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.

 

3. Parental leave

 

Full time and part time employees must have completed at least 12 months continuous service to be entitled to parental leave. Casual employees must be long term casuals and have a reasonable expectation of systematic and regular continuing employment.

 

Parental leave can be taken for birth related leave or adoption related leave. To be eligible for adoption related leave, the child must be under 16 and not have lived continuously with the employee for 6 months or more as at the date of placement.

 

Parents and spouses (including adoptive parents) are entitled to up to 12 months unpaid parental leave if they will have a responsibility for the care of the child. Other requirements are that:

 

  1. leave must be taken in 1 period;
  2. birth related leave may be taken up to 6 weeks before the expected date of birth;
  3. adoption leave must start on the day of placement;
  4. leave may be taken at any time within 12 months after birth or placement;
  5. concurrent leave (ie leave by a parent and spouse at the same time) must be for 3 weeks or less.

 

There are detailed notice requirements in the Fair Work Act.

 

An employee can request their employer to agree to an extension of unpaid parental leave of up to a further period of 12 months. A response must be given within 21 days after the request is made and the employer can only refuse such a request on reasonable business grounds. As with the provisions in relation to flexible working arrangements, a dispute can be referred to The Fair Work Commission for assistance but only where the employer consents, whether in an enterprise agreement, employment contract or in a specific case.

 

Where a pregnant employee continues working during the six weeks before the expected birth, the employer can require the employee to produce a medical certificate to evidence her fitness for work. If this is not supplied, and no safe alternative job is available, the employee can be forced to start their leave early.

 

A female employee is entitled to unpaid special maternity leave if she has a pregnancy-related illness or loses the child within 28 weeks of the expected date of birth. A pregnant employee is entitled to transfer to a safe job in certain circumstances.

 

The employer must consult with an employee absent on parental leave if the employer makes a decision that will have a significant effect on the status, pay or location of the employee’s employment.

 

An employee is entitled to return to their pre parental leave position or, if it no longer exists, an available position for which the employee is qualified and suited nearest the status and pay to the previous position.

 

An employee can take up to 2 days of unpaid pre adoption leave to attend any interviews or examinations required in order to obtain approval for the adoption.

 

Paid parental leave

 

Separate arrangements exist outside the Fair Work Act for paid parental leave commencing from 1 January 2011. The essential features are:

 

  1. 18 weeks taxpayer funded postnatal leave to be shared by eligible parents, with an extra 2 weeks of paternity leave for the father (or same sex partner);
  2. leave to be paid at the adult minimum wage rate (currently $543.78 per week, subject to tax);
  3. all workers are eligible including casual employees, contractors and the self employed;
  4. a broad range of family types will be eligible including conventional couples, lone parents, adoptive parents and same sex couples;
  5. employees on paid parental leave will be entitled to continuing superannuation contributions by their employers subject to a cap.

 

To be eligible a person must:

 

  1. have been an employee of an employer for at least 12 months;
  2. meet residency requirements;
  3. have an income of $150,000 pa or less; and
  4. have worked for at least 1 day a week in 10 out of the previous 13 months.

 

To get PPL, employees must lodge claims with the Family Assistance Office (“FAO”) which will assess entitlement and advise employers. There is a 6 month phase in period - the FAO will directly process payments up until 1 July 2011 unless employers opt in beforehand, but from 1 July 2011, employers will be required to provide the PPL directly to employees (but not contractors).

 

Other elements include:

 

  1. PPL can be taken by an employee within 12 months of the birth/adoption;
  2. PPL does not extend the standard 12 month (+ 12 months on request) parental leave entitlement and supplements any other paid employer leave;
  3. PPL can be transferred to a partner if they are/become the primary carer;
  4. The FAO will make PPL payments to the employer in up to 9 fortnightly instalments;
  5. Employers must pay PPL through the normal pay cycle, deduct tax and provide a payslip for the payments;
  6. Employers don’t have to provide PPL to employees until after it’s received from the FAO;
  7. Employers are not required to pay superannuation on PPL and can claim a tax deduction for the payments;
  8. Employees cannot work while receiving PPL but can “keep in touch” with the workplace for up to 10 days, eg training days;
  9. The Fair Work Ombudsman can investigate alleged failures by employers to pay PPL and penalties can be imposed.

 

4. Annual leave

 

Full time and part time employees are entitled to 4 weeks paid annual leave for each year of service (or 5 weeks if they are a shift worker). The entitlement accrues progressively during each year and is cumulative.

 

Service is defined as all periods of employment other than:

 

  • unpaid leave (e.g. leave without pay or unpaid parental leave);
  • unpaid absence (other than community service leave); or
  • unauthorised absence (e.g. unprotected industrial action).

 

Annual leave may be taken as agreed between the employee and employer but the employer must not unreasonably refuse a request by the employee. The employer can impose a reasonable requirement for an employee to take paid annual leave if there is provision in an applicable modern award or enterprise agreement or the employee is award/agreement free. Public holidays are not included in annual leave nor sick leave taken during a period of annual leave.

 

There is no leave loading under the standard (although awards commonly provide for a loading) and the pay rate for the annual leave period is the employee’s base rate of pay for their ordinary hours.

 

A modern award or enterprise agreement can contain terms about the cashing out of annual leave and award or agreement free employees can also agree with their employer in writing about this. However:

 

  • the employee must keep a balance of accrued annual leave of 4 weeks; and
  • each cashing out must be subject to a separate written agreement.

 

5. Personal/carer’s leave and compassionate leave

 

Full time and part time employees are entitled to 10 days per year of paid personal/carer’s leave. The entitlement accrues progressively during a year and is cumulative. The leave may be taken:

 

  • if the employee is not fit for work because of personal illness or injury; or
  • to provide care or support to a member of the employee’s immediate family or household who requires care or support because of personal injury or illness or an unexpected emergency.

 

A modern award or enterprise agreement can provide for cashing out of paid personal/carer’s leave but only by separate written agreement on each occasion and only as long as the employee’s paid personal/carer’s leave balance does not fall below 15 days. The standard does not provide for cashing out for award/enterprise agreement free employees.

 

In addition to the requirements for paid personal/carer’s leave, all employees are entitled to 2 days of unpaid carer’s leave for each occasion that a member of the employee’s immediate family or household requires care or support because of personal illness or injury affecting that person or an unexpected emergency affecting that person.

 

Employees are entitled to 2 days of compassionate leave for each occasion when a member of their immediate family or household:

 

  • contracts or develops a personal illness that poses a serious threat to their life;
  • sustains a personal injury that poses a serious threat to their life; or
  • dies.

 

This leave can be taken to spend time with the family member or after the death of the member. Full time and part time employees are entitled to payment for compassionate leave. There are notice mechanisms for this leave.

 

6. Community service leave

 

Employees are entitled to this leave if taking part in an eligible community service activity, which is defined as:

 

  • jury service;
  • a voluntary emergency management activity (which is further defined); or
  • otherwise as prescribed by regulation.

 

The leave covers not only the time engaged in the activity but also reasonable travelling and rest time following the activity (excluding jury service) which is reasonable in all the circumstances.

 

Employees absent on voluntary emergency management activities do not have to be paid by the employer. However, non casual employees absent on jury duty do have to be paid the difference between their base pay and the amount received for jury duty for the first 10 days of absence.

 

7. Long service leave

 

Long service leave remains under the coverage of state law although the intention is to work towards a national scheme. Under the Industrial Relations Act 1999 (Qld), 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.

 

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.

 

More information on long service leave in Queensland is available at www.justice.qld.gov.au/

 

8. Public holidays

 

An employee is entitled to paid absence from work on public holidays. Public holidays are listed as:

 

  • 1 January (New Year’s Day);
  • 26 January (Australia Day);
  • Good Friday;
  • Easter Monday;
  • 25 April (Anzac Day);
  • Queen’s Birthday holiday;
  • 25 December (Christmas Day);
  • 26 December (Boxing Day);
  • State declared public holidays.

 

An employer can make a reasonable request for an employee to work on the public holiday which the employee can refuse on reasonable grounds. The legislation sets out certain factors to take into account in deciding what is reasonable:

 

  • the nature of the employer’s workplace (including its operational requirements) and the nature of the employee’s work;
  • the employee’s personal circumstances including family responsibilities;
  • whether the employee could reasonably expect that the employer might request work on a public holiday;
  • whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of work on the public holiday;
  • whether the employee is full time, part time or casual or is a shift worker;
  • the amount of advance notice given by the employer.

 

9. Notice of termination and redundancy pay

 

The standard requires that notice of termination must be given in writing. The standard provides for the provision by employers of minimum periods of notice or payment in lieu of notice on termination of employment which are:

 

Period of employee’s service Required period of notice
Not more than 1 year At least 1 week
More than 1 year but not more than 3 years At least 2 weeks
More than 3 years but not more than 5 years At least 3 weeks
More than 5 years At least 4 weeks

 

An employee who is over 45 years of age and has worked for the same employer for at least two years is entitled to an extra weeks notice. It is important to note that these are minimum entitlements only and an employee may be entitled to a greater period of notice according to the circumstances of the case.

 

There is also a requirement for compulsory redundancy or severance pay. Redundancy occurs where an employer no longer requires the person’s job to be done by anyone or where the employer becomes insolvent. The scale of redundancy pay is:

 

Period of employee’s service Redundancy pay period
1 – 2 years 4 weeks
2 – 3 years 6 weeks
3 – 4 years 7 weeks
4 – 5 years 8 weeks
5 – 6 years 10 weeks
6 – 7 years 11 weeks
7 – 8 years 13 weeks
8 – 9 years 14 weeks
9 – 10 years 16 weeks
More than 10 years 12 weeks

 

If the employer obtains other acceptable employment for the redundant employee or cannot pay the required redundancy pay, the employer can make application to The Fair Work Commission to vary the required amount.

 

The requirement to pay redundancy does not apply if the employee has less than 12 months continuous service or is a “small business employer”. This means an employer with less than 15 employees.

 

The requirement for redundancy pay applies to permanent full time and part time employees whose employment is not terminated for serious misconduct.

 

Where a business is sold and the employee’s service transfers to the new employer, redundancy entitlements do not have to be recognised by the new employer as long as they are paid out on transfer by the old employer.

 

It is important to note that this standard only applies to service after 1 January 2010, even if the employee has many years of service beforehand. Award employees in particular will generally find that their redundancy entitlements are contained in the applicable modern award.

 

10. Fair work information statement

 

Employers will be required to provide to every new employee a document called a Fair Work Information Statement. It contains details of the NES, awards, agreement-making, the right to freedom of association and the role of The Fair Work Commission and the Fair Work Ombudsman.

 

C. More Information

 

Further information about minimum entitlements can be obtained from www.fwc.gov.au or www.fairwork.gov.au or go to the links section of this website.