Sources of employee rights and what you need to know

By Vivian Michael | Employment

Sources of employee rights - an explanation of how contracts, awards, enterprise agreements, case law and legislation all interact together and the essentials you need to know

Sources of employee rights & what you need to know

Did you know that employees have rights that come from contracts as well as awards, enterprise agreements and legislation ?

It’s easy to get confused if you don’t know how all the pieces work together.

But there’s no need to be confused.

One principle is important to understand first. It’s this: An employee contract can have more but not less generous terms than those set out in an award, enterprise agreement and legislation. 

An employee contract can have more but not less generous terms than those set out in an award, enterprise agreement and legislation. 

Below is an outline of the sources of employee rights.

Employee contracts

A contract can be verbal, written or a mix of the two.

And your employee’s contracts can have more but not less generous terms for your workers than an award, enterprise agreement or legislation.

And if you have provided more generous terms in an employee contract, those terms will apply over the minimum legal requirements.

Employee contract case study 

An employer pays an employee $550 to work 3 days per week per a written employment contract. About 18 months later, the worker resigns. 

The employer writes to the worker once they have left and claims they have overpaid the worker by $20,000 because their wages in the contract exceeded the award rate.

Does the employer have the right to claim from the employee ?

No.

Why ?

The employment contract had a higher rate than the Award and this is allowed. The employer cannot then renege and claw back the difference between the Award and the contract.

Awards

So what exactly is an Award ?

An award outlines the minimum pay rates and employee conditions for some industries in Australia.

An employer can of course pay employee's more than the award minimums. 

Currently, there are 122 Awards in Australia.

The term industry has to do with the product being produced. For example - the hair and beauty industry or the fast food industry.

Tip: You should always check the coverage section of an Award if you are unsure whether it applies to your workers (usually clause 4) and also review the job classifications section.

Always check the coverage section of an Award if you are unsure whether it applies to your owners (it's usually clause 4), also review the job classifications section.

Some examples of industry awards: 

What do Awards typically cover: 
  • consultation about major workplace changes;
  • dispute resolution processes;
  • types of employment (full-time, part-time and casual) and termination of employment;
  • redundancy;
  • classifications and wage rates; and
  • leave and public holidays.

Importantly, Awards won’t apply if an organisation has an enterprise agreement.

Also, an award cannot exclude the national employment standards.

So, what exactly is a registered agreement ?

Enterprise agreement

An enterprise agreement is an agreement made at the enterprise level and can be legally enforced. 

An enterprise agreement sets out the rights and responsibilities of employees and employers covered by the agreement.

Similar to Awards, enterprise agreements cannot exclude the national employment standards and if an award does, then it will have no effect.

The Fair Work Act deals with enterprise agreements and covers:

  • making an agreement;
  • bargaining and representation during bargaining;
  • pre-approval steps and applications for the FWC’s approval; and
  • approval by the Fair Work Commission.

And finally, legislation. 

Legislation

The Fair Work Act governs the employee/employer relationship in Australia. 

And includes minimum entitlements for workers.

Here’s a sample of what’s covered:

  • national employment standards (minimum standards for employees) such as:
    • hours and flexible work arrangements
    • leave
    • public holidays
    • notice for termination and redundancy; and 
    • Fair work information statement
  • modern awards; 
  • enterprise agreements;
  • minimum wages; and
  • transfer of business. 

It's important to note that state and local employees are not covered by the Fair Work system. 

Summary of tips

Look at any applicable awardenterprise agreement (if any) and ​Fair Work legislation to see if your workers have other entitlements when you prepare employment contracts and also when your employee’s query their entitlements. 

Employment agreement terms will apply unless an enterprise agreement, award or legislation contains more generous terms for your employee’s. 

If in doubt, it’s always a good idea to reach out for advice.

Do you need help from an Australian business lawyer for startups? Contact us today for help on info@michaellawgroup.com.au or 1300 478 278 Australia wide or on +61 2 9151 7233 from overseas. We are always glad to help.





About the Author

Vivian Michael is a lawyer and founder of Michael Law Group. Vivian's mission is to make quality business legal services accessible to startups that would otherwise DIY, rely on legacy contracts or go without.

>