If you employ people in your business, the main piece of legislation that covers Australian workers is the Fair Work Act. This massive document outlines how our workplace relations system operates, including the different tribunals and agencies that administer the legislation.
In this guide we will look at the essential things you need to know in order to ensure you have basic compliance with the Fair Work Act.
National Employment Standards – Applies to All Employees
Some of the most important things that the Fair Work Act spells out are the National Employment Standards.
The National Employment Standards (or NES for short), create a basic safety net for all employees covered by Australia’s workplace relation system. The NES cover every employee in Australia, no matter the industry or the location of the business.
They form the minimum standards, below which businesses cannot go. If you pay people beneath these standards, you will be up for some hefty penalties and fines.
There are 10 National Employment Standards and they cover:
- Maximum Weekly Hours Of Work
- Flexible Working Arrangement Requests
- Parental Leave & Related Entitlements
- Annual Leave
- Personal/Carer’s Leave & Compassionate Leave
- Community Service Leave
- Long Service Leave
- Public Holidays
- Notice of Termination & Redundancy Pay
- Provision of Fair Work Information Statement
Remember – The provisions set down in these standards are mandatory. You don’t have any discretion to ignore, exclude or pay anything less than these entitlements.
Modern Awards – Applies to All Employees Covered by the Award
On top of the NES, you need to know which modern award covers your employees. Modern Awards outline the minimum pay and conditions that are payable for your employees.
Modern Awards apply to everyone within a particular industry except for managers and some highly paid employees, or if an enterprise agreement covers a particular workplace.
Remember – The minimum provisions contained in the Modern Award for your industry are mandatory for the people that the modern award covers. You cannot ignore, exclude or pay anything less than these entitlements.
Enterprise Agreements – Applies to All Employees in a Business
If you are looking for more flexibility in the conditions you provide your employees, you can negotiate an enterprise agreement that needs to be voted on and approved by your team members.
Remember – Enterprise agreements cannot pay anything less than the NES and the minimum wages outlined in the relevant modern award.
Individual Employment Contracts – Applies to One Employee
When you want to provide greater clarity and flexibility for an individual team member within your business, you can outline an individual employment contract. While these can be in writing, verbal or inferred from how you and that person operate, we recommend every employment contract be in writing – ideally signed when a person first starts in your employment.
Remember – Employment contracts cannot agree to any terms or conditions less than the NES, and all minimum conditions outlined in their Modern Award or Enterprise Agreement. They are great for documenting agreements for things such as bonuses, over-award payments and additional leave.
HR Policies & Procedures – Applies to All Employees in a Business
All smart workplaces have in place company based HR Policies & Procedures that operationalise the NES, awards, agreements and contracts and help protect your business.
For example, an agreement may specify that employees are entitled to a certain amount of sick/carers’ leave. HR Policies & Procedures outline which form people need to use to apply for leave, who an employee needs to notify when they want to access this leave, when a medical certificate is required etc.
However, if you do have Employment Policies & Procedures, all requirements within your documents must fully comply with the requirements of the Fair Work Act.
Often businesses forget to update their procedures over time, and as a result their procedures for areas such as dismissal or harassment can quickly become out of date and not comply with the legislation.
If your HR Policies & Procedures are not compliant with the Fair Work Act, and as a result the process you follow to deal with matters is not compliant, you could face penalties of up to $51,000 for a company and $10,200 for an individual.
Remember: Ignorance of the law is not a defence, so if you do have policies it pays to have them regularly reviewed by an external HR expert to ensure your business is compliant.
Actions for your Business
We like to turn theory into action, so here are our recommended actions for your business to ensure you comply with the Fair Work provisions.
- Get a copy of the NES (available from www.fairwork.gov.au).
- Review all your employee’s pay and conditions against the NES to ensure every person is being paid correctly.
- Locate and read the Modern Award that covers your industry (available from (available from www.fairwork.gov.au), or the Enterprise Agreement that covers your business.
- Review all your employee’s pay and conditions against the award or agreement to ensure every person is being paid correctly.
- Review all individual contracts to ensure a) they are documented and signed and b) that they are compliant.
- Review your HR Policies & Procedures to ensure compliance with the requirements of the Fair Work Act.
If you would like more information about the NES and the Modern Award that covers your industry, or would like assistance with your Employment Contracts or HR Policies & Procedures, please visit our Contact Us page, email us at email@example.com, or call our office on (03) 9023 4736.