The Australian Government has released new National Employment Standards (“NES”) that aim to protect key entitlements of employees. The NES will apply to all employees in the Federal system regardless of industry, occupation or income and are due to come into effect on 1 January 2010. The NES have been released as part of the Government’s overhaul of the workplace relations system, which will also see the modernisation of awards in an attempt to deliver their election promise of a fairer employment system for all Australian employees.

What are the NES?

The NES are 10 minimum standards including:

1. Maximum weekly hours

• For a full-time employee is 38 hours.
  
  
• For an employee other than a full-time employee – the lesser of:
  (i) 38 hours; and
  (ii) the employees ordinary hours of work in a week.
  
  
• Employers may request/require an employee to work reasonable additional hours in the week.
  
  
• An employee can refuse to work the additional hours if they are unreasonable, for example, if no notice was given by the employer or there would be a risk to the employee’s health and safety from working the additional hours.

2. Requests for flexible working arrangements

• An employee who has been engaged by the employer for at least 12 months’ continuous service, who is a parent or has the responsibility for the care of a child under school age, may request the employer for a change in working arrangements for the purpose of assisting the employee to care for the child.
  
  
• The employee must make a written request detailing the change sought and reasons for the change. Similarly, the employer must make a written response within 21 days, granting or refusing the request. The employer may only refuse the request on reasonable business grounds and must provide the reasons for refusal in writing.

3. Parental leave and related entitlements

• If an employee has completed 12 months’ continuous service he or she is entitled to 12 months’ unpaid parental leave if the leave is associated with the birth or adoption of a child, and if the employee has or will have the responsibility for the care of the child. However, the 12 months are reduced by the amount of any unpaid special maternity leave the employee has taken (for example, because of pregnancy-related illness).
  
  
• The 12 months can be extended by up to an additional 12 months by the employee making a written request to the employer, who can refuse the extension only if there are reasonable business grounds for refusal. Similarly, if the employer agrees, the employee may reduce the period of unpaid parental leave he or she takes.
  
  
• An employee may take a form of paid leave at the same time as he or she is on unpaid parental leave. For example, if the employee has paid annual leave owing to them, then he or she (with their employer’s agreement) may take some or all of that paid annual leave at the same time as the unpaid parental leave. However, an employee is not able to take any paid personal/carer’s or compassionate leave while he/she is on unpaid parental leave.
  
  
• An employee on finishing unpaid parental leave is entitled to return to their pre-parental leave position. Where this is not possible, for example, where that position no longer exists – the employee should be appointed to a position for which the employee is qualified and suited nearest in status and pay to their pre-parental leave position.

4. Annual leave

• Other than casual employees, for each year of service with his or her employer, an employee is entitled to four weeks paid annual leave, except if the employee’s employment is defined or described in a modern award as a ‘shiftworker’ – then the employee is entitled to five weeks paid annual leave.
  
  
• Annual leave should be taken at a mutually agreeable time to both the employer and the employee. Employers must not unreasonably refuse an employee’s request to take paid annual leave.
  
  
• If the employment of an employee ends and the employee has a period of untaken annual leave, the employer must pay the employee the same amount the employee would have been entitled to had the person taken that period of annual leave.

5. Personal/carer’s leave and compassionate leave

• Employees (other than casual employees) for each year of service with his or her employer are entitled to 10 days’ paid personal/carer’s leave (leave accrues progressively during a year of service according to the employee’s ordinary hours of work).
  
• Permissible occasions for taking personal/carer’s leave are:
  (a) the employee is unfit for work because of personal injury or illness;
  (b) to provide care or support to an immediate family member, or member of the employee’s household who has a personal injury or illness, or because of an unexpected emergency affecting the member.
  
  
• An employee is entitled to two days’ unpaid carer’s leave for each permissible occasion; however, they cannot take unpaid carer’s leave if they could instead take paid personal/carer’s leave.
  
  
• Employees are entitled to take two days’ compassionate leave if they or a member of the employee’s immediate family or household contracts or develops a personal illness or injury that poses a serious threat to his or her life, or if someone in their immediate family or household dies.

6. Community service leave

• Eligible community service activities include jury service, voluntary emergency management activities, and other activities of a community service nature.
  
  
• Community service leave entitles an employee to be absent from his or her employment for the time when the employee is engaged in the activity, for reasonable travelling time associated with the activity and for reasonable rest time immediately following the activity. For jury service, the employee is entitled to be paid for the first 10 days of absence. Statutory jury service payments made to the employee must be disclosed to the employer.

7. Long service leave

• An employee is entitled to long service leave under applicable award-derived long service leave provisions (provisions of an award or of a Notion Agreement Preserving State Awards) unless:
  (a) A collective agreement or an Australian Workplace Agreement (AWA) or Individual Transitional Employment Agreement (ITEA) applies to the employee’s employment – this however, must have come into force before the commencement of the NES; or
  (b) An instrument (in force before the commencement of the NES) applies to the employee’s employment and specifically deals with long service leave. For example, a preserved State agreement or an old industrial relations agreement.

8. Public holidays

• An employee is entitled to be absent from his or her employment on a day or part-day that is a public holiday.
  
  
• An employer may request an employee to work on a public holiday if the request is reasonable. An employee may refuse the request if the request is not reasonable OR the refusal is reasonable.
  
  
• If a permanent employee is absent on a public holiday falling when they would ordinarily work, the employer must still pay the employee at the base rate of pay for the employee’s ordinary hours of work on the day.

9. Notice of termination and redundancy pay

• An employer must give an employee written notice of termination.
  
  
• The employer must not terminate the employee’s employment unless the minimum period of notice is given, or the employer has paid the employee in lieu of notice the amount the employer would have been liable to pay had the employee worked the period of notice.

• If an employee is older than 45 and has completed at least two years’ continuous service then the minimum notice period (above) is increased by one week.
  
  
• If because of insolvency or bankruptcy of the employer, or because of redundancy the employee is entitled to severance pay (as detailed below) in addition to notice.

 

• If an employer obtains other acceptable work for the employee or cannot pay the amount, then an application can be made to Fair Work Australia to determine if the redundancy payment amount can be reduced.
  
  
• Employer obligations with regards to redundancy do not apply if the employee has completed less than one year continuous service. Obligations also do not apply if at the time the employee is given notice of the termination or immediately before the termination the employer has fewer than 15 employees (casual employees are not counted as employees for the purposes of calculating the number of employees unless they have been engaged by the employer on a regular and systematic basis for at least 12 months).
  
  
• In the case of a transmission of business – redundancy pay is not required if the new employer recognises the employee’s service with the former employer in the business being transferred.
  
  
• If an employee in a business being transferred rejects an offer of employment with the new employer where the terms and conditions are substantially similar to, and considered on an overall basis, no less favourable than the employee’s current terms and conditions, and the new business recognises the employee’s service with the old employer then the employee is not entitled to redundancy pay. This can be challenged through Fair Work Australia.
  
  
• Employees not covered by this provision include:
  (a) employees engaged for a specified time for a specific task;
  (b) employees on a probation or qualifying period;
  (c) employees terminated because of serious misconduct;
  (d) a casual or seasonal employee; or
  (e) a trainee (other than an apprentice).

10. Fair Work Information Statement

• Fair Work Australia will publish a “Fair Work Information Statement” – containing information about:
  (a) NES;
  (b) modern awards;
  (c) agreement-making under this Act;
  (d) the right to freedom of association; and
  (e) the role of Fair Work Australia.
  
  
• An employer must give the Fair Work Information Statement to each new employee before, or as soon as practicable after, the commencement of their employment.

Conclusion
The NES will come into effect with the rest of the new system on 1 January 2010. If you have any queries regarding the impact of the NES on your business, please contact our Employment & Workplace Relations team.