National Employment Standards – common defects & issues

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Agreement making – the National Employment Standards (NES)

The National Employment Standards (NES) are 10 minimum employment standards that apply to all national system employees.

Before approving an agreement, the Fair Work Commission must be satisfied that the terms of the agreement do not exclude the NES or any provision of the NES.

Agreements can include terms that are the same or substantially the same as the NES, or that supplement the NES by providing more favourable entitlements. Terms in agreements can also interact with the NES in certain permitted situations (such as to allow the cashing out of annual leave).^[1]

Definition of shiftworkers – common defects & issues

Defect or issue	Requirement
The agreement does not describe or define an employee as a shiftworker for the purposes of the NES, but the modern award that covers the employee does so.	An agreement must define or describe an employee as a shiftworker for the purposes of the NES, if the modern award does so.^[2]

When defining those employees who are entitled to an extra week of annual leave use wording such as:

'For the purpose of the additional week of annual leave provided for in the NES, a shiftworker is {insert relevant definition of shiftworker as found in the award}.'

Annual leave – common defects & issues

Defect or issue	Requirement
Annual leave entitlements in the agreement are expressed in hours or days (rather than weeks) and equate to less than 4 weeks' paid annual leave. For example: the agreement states that 'a day worker's annual leave entitlement is 152 hours', but provides for working days of over 7.6 hours.	An employee (other than a casual employee) is entitled to 4 weeks' paid annual leave (5 weeks' for shiftworkers).^[3] In the NES a 'week' of annual leave is an authorised absence from work during the working days falling in a 7 day period.^[4]
The agreement provides that annual leave accrues at a certain point in time. For example: 'annual leave will be credited on the anniversary of your appointment'.	Annual leave accrues progressively during a year of service.^[5]
The agreement's cashing out provisions do not contain the safeguards found in the NES.	A cashing out term in an agreement must meet the requirements specified in s.93(2).^[6] (The safeguards in the cashing out provision in the relevant modern award should also be considered, as this will be relevant to assessing whether the agreement passes the BOOT).

Defect or issue

Requirement

Annual leave entitlements in the agreement are expressed in hours or days (rather than weeks) and equate to less than 4 weeks' paid annual leave.

For example: the agreement states that 'a day worker's annual leave entitlement is 152 hours', but provides for working days of over 7.6 hours.

An employee (other than a casual employee) is entitled to 4 weeks' paid annual leave (5 weeks' for shiftworkers).^[3]

In the NES a 'week' of annual leave is an authorised absence from work during the working days falling in a 7 day period.^[4]

The agreement provides that annual leave accrues at a certain point in time.

For example: 'annual leave will be credited on the anniversary of your appointment'.

Annual leave accrues progressively during a year of service.^[5]

The agreement's cashing out provisions do not contain the safeguards found in the NES.

A cashing out term in an agreement must meet the requirements specified in s.93(2).^[6]

(The safeguards in the cashing out provision in the relevant modern award should also be considered, as this will be relevant to assessing whether the agreement passes the BOOT).

Personal/carer’s leave – common defects & issues

Defect or issue	Requirement
The personal/carer’s leave entitlement in the agreement is expressed in hours rather than as days, and equates to less than the NES entitlement.	An employee (other than a casual employee) is entitled to 10 days' paid personal/carer's leave for each year of service and 2 days' unpaid carer’s leave for each occasion (provided paid personal/carer's leave is not available).^[7] In the NES a 'day' of personal/carer’s leave is an authorised absence from the working time in a 24 hour period.^[8]
The agreement provides that personal/carer's leave accrues at a certain point in time. For example: 'on the anniversary of your appointment'.	Personal/carer's leave accrues progressively during a year of service.^[9]
The agreement limits the amount of personal leave that can be taken as carer's leave.	All accrued personal/carer's leave may be taken as carer's leave.^[10]
The agreement does not provide carer's leave for casual employees.	Casual employees are entitled to 2 days' unpaid carer's leave per occasion.^[11]

Compassionate leave – common defects & issues

Defect or issue	Requirement
Compassionate leave in the agreement is expressed as an entitlement per year rather than per occasion.	An employee (other than a casual employee) is entitled to 2 days' paid compassionate leave for each occasion.^[12]
The agreement does not provide compassionate leave for casual employees.	Casual employees are entitled to 2 days' unpaid compassionate leave for each occasion.

Parental leave – common defects & issues

Defect or issue	Requirement
Parental leave provisions in the agreement provide lesser entitlements than the NES. For example: the adoption leave clause does not allow leave to be taken in relation to the placement of any child who is under 16 years of age (s.68).	The parental leave provisions in an enterprise agreement must not be detrimental to an employee in any respect, when compared to the NES.^[13]
The agreement does not permit an employee to request a further 12 months' parental leave in addition to the first 12 months of leave (s.76).	An employee may request their employer to agree to an extension of unpaid parental leave for a further period of up to 12 months immediately following the end of the 'available parental leave period' (which is 12 months, less any periods specified in s.75(2)).^[14]

Defect or issue

Requirement

Parental leave provisions in the agreement provide lesser entitlements than the NES.

For example: the adoption leave clause does not allow leave to be taken in relation to the placement of any child who is under 16 years of age (s.68).

The parental leave provisions in an enterprise agreement must not be detrimental to an employee in any respect, when compared to the NES.^[13]

The agreement does not permit an employee to request a further 12 months' parental leave in addition to the first 12 months of leave (s.76).

An employee may request their employer to agree to an extension of unpaid parental leave for a further period of up to 12 months immediately following the end of the 'available parental leave period' (which is 12 months, less any periods specified in s.75(2)).^[14]

Public holidays – common defects & issues

Defect or issue	Requirement
The agreement lists 'all' public holidays but does not include other state/territory public holidays.	The NES includes as public holidays days or part-days declared or prescribed by state or territory law as public holidays, and substituted public holidays under state or territory laws^[15] Any definition or list of all public holidays in an agreement must include 'holidays declared or prescribed by, or under, a law of a state or territory' in which the agreement operates.

Defect or issue

Requirement

The agreement lists 'all' public holidays but does not include other state/territory public holidays.

The NES includes as public holidays days or part-days declared or prescribed by state or territory law as public holidays, and substituted public holidays under state or territory laws^[15]

Any definition or list of all public holidays in an agreement must include 'holidays declared or prescribed by, or under, a law of a state or territory' in which the agreement operates.

Notice of termination & redundancy – common defects & issues

Defect or issue	Requirement
The agreement provides lesser termination or redundancy entitlements than in the NES.	The NES sets out requirements for notice of termination by an employer and redundancy pay. An agreement must provide the same or more beneficial termination and redundancy entitlements compared to the NES.^[16]
Apprentices have been excluded from notice of termination entitlements.	Apprentices must not be excluded from notice of termination requirements in the NES.
Abandonment of employment The agreement states that an employee will forfeit their right to payment on termination of employment if they do not attend work for a given number of days.	An agreement cannot remove an employee's entitlement under the NES to notice of termination or payment in lieu where their employment is terminated by the employer.^[17]

Defect or issue

Requirement

The agreement provides lesser termination or redundancy entitlements than in the NES.

The NES sets out requirements for notice of termination by an employer and redundancy pay. An agreement must provide the same or more beneficial termination and redundancy entitlements compared to the NES.^[16]

Apprentices have been excluded from notice of termination entitlements.

Apprentices must not be excluded from notice of termination requirements in the NES.

Abandonment of employment

The agreement states that an employee will forfeit their right to payment on termination of employment if they do not attend work for a given number of days.

An agreement cannot remove an employee's entitlement under the NES to notice of termination or payment in lieu where their employment is terminated by the employer.^[17]

Flexible working conditions – common defects & issues

Defect or issue	Requirement
The agreement limits the right to request part-time employment to the first year following a period of maternity leave.	Under the NES, employees who have worked for their employer for a continuous period of at least 12 months (and certain casual employees) are entitled to request flexible working conditions (including part-time hours) where the employee: is a parent, or has responsibility for the care of a child who is of school age or younger is a carer, as defined has a disability is 55 or older is experiencing violence from a member of their family, or provides care or support to a member of their immediate family or household who requires care or support because they are experiencing violence from the member’s family.

Defect or issue

Requirement

The agreement limits the right to request part-time employment to the first year following a period of maternity leave.

Under the NES, employees who have worked for their employer for a continuous period of at least 12 months (and certain casual employees) are entitled to request flexible working conditions (including part-time hours) where the employee:

is a parent, or has responsibility for the care of a child who is of school age or younger
is a carer, as defined
has a disability
is 55 or older
is experiencing violence from a member of their family, or
provides care or support to a member of their immediate family or household who requires care or support because they are experiencing violence from the member’s family.

Many issues in relation to the NES may be addressed by including an NES precedence term in the agreement that provides that in the event of any inconsistency with the NES, the more beneficial term will apply to the extent of that inconsistency. An example of such a clause is:

'This Agreement will be read and interpreted in conjunction with the National Employment Standards (NES). Where there is an inconsistency between this agreement and the NES, and the NES provides a greater benefit, the NES provision will apply to the extent of the inconsistency.'

References

^[1] Fair Work Act 2009 Part 2-2 (including ss.55 and 56), ss.186(2)(c) and 253.

^[2] Fair Work Act ss.187(4) and 196; Form F17 Q2.16.

^[3] Fair Work Act ss.86 and 87(1).

^[4] See Construction, Forestry, Mining and Energy Union v Glendell Mining Pty Limited [2017] FCAFC 35 (28 February 2017); and Mondelez Australia Pty Ltd [2018] FWC 2140 (Hatcher VP, 13 April 2018). Note: this issue is currently the subject of legal proceedings before the Federal Court (Mondelez Australia Pty Ltd v AMWU & others (VID 731/2018)).

^[5] Fair Work Act s.87(2).

^[6] Fair Work Act s.93(1)–(2).

^[7] Fair Work Act ss.96(1), 102 and 103(3).

^[8] See Construction, Forestry, Mining and Energy Union v Glendell Mining Pty Limited [2017] FCAFC 35 (28 February 2017); and Mondelez Australia Pty Ltd [2018] FWC 2140 (Hatcher VP, 13 April 2018). Note: this issue is currently the subject of legal proceedings before the Federal Court (Mondelez Australia Pty Ltd v AMWU & others (VID 731/2018)).

^[9] Fair Work Act s.96(2).

^[10] Fair Work Act s.97(b).

^[11] Fair Work Act s.102.

^[12] Fair Work Act ss.104–106.

^[13] See Fair Work Act ss.67–85.

^[14] Fair Work Act s.76.

^[15] Fair Work Act s.115.

^[16] See Fair Work Act ss.117–123.

^[17] See Bienias v Iplex Pipelines Australia Pty Limited T/A Iplex Pipelines Australia [2017] FWCFB 38 (Hatcher VP, Gostencnik DP, Cribb C, 13 January 2017) for guidance on when an employee has abandoned their employment.

Updated time

Last updated

24 May 2019

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