Employing people should be a satisfying and rewarding experience, however if not done properly at the start can become a minefield. Fortunately, there are sets of statutory rules that govern the engagement of staff that are there to help you as an employer. The minimum conditions of employment are set out in Australia’s workplace relations system, which includes the Fair Work Act 2009, the National Employment Standards, awards and registered agreements.
So, what does it all mean and where do we begin?
The Fair Work Act 2009 sets the minimum terms and conditions of employment through the National Employment Standards, modern awards and national minimum wages.
The Act outlines the employer’s requirement to make and keep accurate employee records for every employee, including (but not limited to):
- Pay records, including: rates, net and gross pay, contributions, allowances and deductions.
- Hours of work records, including: timesheets, overtime, time-in-lieu and agreements for averaging an employee’s hours of work.
- Leave records, including: leave taken, balances available, agreement for cashed out annual leave
- Superannuation contribution records, including: amounts, dates, fund names and relatable period
- Individual flexibility arrangement records, including: agreements that alter the awards
- Termination records, including: resignation letter, notice period, notice of termination.
The National Employment Standards (NES) are a set of 10 legislated employee entitlements which must be provided to all employees. These standards have been created mostly for full-time and part-time employees and include the following:
- Maximum weekly hours – 38 hours per week, plus reasonable additional hours.
- Right to request flexible working arrangements – certain employees can ask to change their working arrangement.
- Parental leave – up to 12 months unpaid leave and the right to ask for an extra 12 months unpaid leave. Also includes adoption‑related leave.
- Annual leave – four weeks paid leave per year, plus an additional week for some shift workers.
- Personal/carer’s, compassionate leave and family and domestic violence leave – 10 days paid personal/carer’s leave, two days unpaid carer’s leave as required, two days compassionate leave as required and five days unpaid family and domestic violence leave (in a 12-month period).
- Community service leave – unpaid leave for voluntary emergency activities and leave for jury service, with an entitlement to be paid for up to 10 days for jury service.
- Long service leave – paid leave for employees who have been with the same employer for a long time.
- Public holidays – a paid day off on a public holiday (unpaid for casuals), except where reasonably requested to work.
- Notice of termination and redundancy pay – up to 5 weeks notice of termination and up to 16 weeks redundancy pay, both based on length of service.
- Provision of fair work information statement – must be provided by employers to all new employees.
These entitlements are referred to in most modern awards and as they are minimum mandatory requirements, they can only be varied if the entitlement is better off overall for the employee. For example, the employer and employee may decide to substitute a public holiday or even average the employee’s ordinary hours of work to include reasonable additional hours of overtime. These are all acceptable variations, provided the documentary evidence is provided as per the Fair Work Act 2009 record keeping requirements. Many of these variations come under the flexibility clause of the awards.
An Award is an instrument that provides specific pay rates and conditions of employment relating to a particular industry or occupation, which is enforceable under the Fair Work Act 2009. Currently there are over 120 Modern Awards, and each contain specific conditions relating to (but not limited to):
- Type of employment – full-time, part-time or casual
- Overtime – hours above contracted hours or 38 hours per week for full-time employees
- Penalty rates – casual leave loading, overtime loading, public holiday loading
- Allowances – Leading hand, travel, meals, uniform, etc
- Superannuation – Compulsory employer contributions
- Leave entitlements – leave loading, NES, cashing out of annual leave.
Within primary production, there are two Awards generally used – Pastoral Award 2010 (MA000035) and the Road Transport (Long Distance Operations) Award 2010 (MA000039). Provided within each of these awards are clauses which clarify the conditional requirements. These clauses provide guidance and clearly define both the employees’ rights and entitlements, as well as the employer’s duties towards these entitlements.
One of the clauses which is commonly used within primary production, is clause 7 – individual flexibility arrangements. This allows the employer and employee to come to an arrangement whereby the award is varied to meet the needs of both the employee and the employer regarding:
- Arrangements for when work is performed
- Overtime rates
- Penalty rates
- Annual leave loading
Typically, a flexibility agreement is drawn up to ensure the employee is better off overall and can allow an employer to average their weekly hours and hourly rate to include all allowances and penalty rates. It is important to note that it must be a mutual decision and an employer is not permitted to force the employee to agree to the arrangement.
An agreement may also be drawn up if the employee performs two roles within the organisation, such as a truck driver and farm hand. In this case, careful consideration needs to be made as to how much time is assigned to performing each role along with the relevant award. The agreement may provide an average hourly rate which is based on a 50%-time allowance to the Road Transport Award and a 50%-time allowance to the Pastoral Award. If this situation applies to your business, it would be best to seek professional advice prior to drafting up any agreements.
So, where to start?
Firstly, start with the appropriate award, while familiarising yourself with the NES. The Fair Work ombudsman is available via www.fairwork.gov.au and can provide templates, guidance and potential answers to your questions. While there is an enormous amount of information available, it can be a complex and daunting experience to navigate your way through the system, so should you require assistance with either the NES or understanding the relevant awards, or even a review of your workplace relations system, please get in contact with ORM. We are happy to help.
Fair Work Information Statement
Pastoral Award http://awardviewer.fwo.gov.au/award/show/MA000035
Road Transport long distance Operations Award http://awardviewer.fwo.gov.au/award/show/MA000039