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Employment

National Employment Standards (NES) You Should Know

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National Employment Standards you should know

Updated: 26 September 2022

Did you know there are National Employment Standards? Also, did you know that no matter whether employees work under an industry award, employment contract or enterprise agreement, these are the minimum employee rights that you as the employer must meet? In other words, you cannot write the National Employment Standards out of a contract or agreement.

If you were not aware, this article covers what National Employment Standards you should know.

Table of Contents

What the terms mean

Employee contracts

Awards

Enterprise agreements

Legislation

Avoid the flat rate pitfall

Key takeaways

What the terms mean

Term	MEANING
Contract	A contract is verbal, written or a mix of the two that sets out the terms of the working relationship..
Award	Industry Awards outline the minimum pay rates and employment conditions for all employees in the relevant industry.
Enterprise agreement	An enterprise agreement is made at the enterprise level and sets out the responsibilities of employees and employer. This can be legally enforced.
Industry	The term industry relates to the product business produces. For example, the hair and beauty industry or manufacturing industry.

Employee contracts

A contract can be verbal, written or a mix of the two. And employee contracts can have more, not less, generous terms than those in an award, enterprise agreement or legislation. And if you provide employees with generous terms, they apply over the minimum legal requirements.

Employee contract case study

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

The employer writes to the worker after they leave claiming to have overpaid the worker by $20,000 because the wages set out in the contract exceeded the Award rate.

Does the employer have the right to claim $20,000 back from the employee?

No.

Why?

The employment contract had a higher rate than the Award and this is allowed. This is also the rate the employer agreed to pay the employee. The employer cannot then renege and claw back the difference between the Award and the contract.

Awards

What exactly is an Award?

An award outlines the minimum pay rates and employment conditions for all employees in the relevant industry in Australia. But an employer can choose to pay wages above the Award.

Meaning of industry would be good here too. I know seems obvious to us but might not be for others. – the meaning of industry is in the next paragraph

Currently, there are 122 industry Awards in Australia. These cover employees in the relevant industry such as the fast food and real estate industries. But Awards do not apply when an employer has an enterprise agreement or other registered agreement.

All awards have a section called coverage (usually clause 4) which sets out what workers it covers. Also review the job classification section.

Examples of industry awards include:

Which of these employee rights affects what you do? There is a full list of the Awards on the Fair Work Ombudsman website.

What do Awards typically cover?

Awards typically cover the minimum employee rights when working for you. These include:

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.
Leave and public holidays.

Importantly, an Award will not apply if an organisation has an enterprise or registered agreement.

Also, an award cannot exclude the National Employment Standards set out in the Fair Work Act.

So, what is a registered or enterprise agreement?

Enterprise agreements

An enterprise agreement is an agreement made at the enterprise level and can be legally enforced. It 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. The legislation covers:

Making an agreement.
Bargaining and representation during bargaining.
Pre-approval steps and applications for obtaining Fair Work Commission approval.
Approval by the Fair Work Commission.

Legislation

The Fair Work Act is legislation that governs the employee/employer relationship in Australia and includes minimum entitlements for workers. For example:

The 11 National Employment Standards include:
Maximum weekly hours
Requests for flexible working arrangements
Offers and requests to convert from casual to permanent employment
Parental leave and related entitlements
Annual leave
Personal/carer's leave, compassionate leave and unpaid family and domestic violence leave
Community service leave
Long service leave
Public holidays
Notice of termination and redundancy pay
Fair Work Information Statement and Casual Employment Information Statement.
Modern Awards
Enterprise Agreements
Minimum wages
Transfer of business.

It's important to note that State public sector and local government employees are not covered by the Fair Work system.

Domestic Violence Leave

In Australia, 1 in 4 women and 1 in 13 men experience domestic violence. And it worsened during the pandemic.

In May 2022, Fair Work ruled that family and domestic violence is a serious enough issue that employees should have access to 5 days unpaid domestic violence leave every year as part of the National Employment Standards. This is still provisional while Fair Work seeks input from interested parties.

In July 2022, the Federal Labor Government introduced the Fair Work Amendment (Paid Family and Domestic Violence Leave) Bill 2022. If this passes it will give employees10 days paid Family and Domestic Violence leave.

Currently employees are entitled to 5 days unpaid leave under the National Employment Standards.

Avoid the flat rate pitfall

One pitfall to avoid is paying your workers a flat rate in lieu of overtime and penalty rates that may apply under an industry Award.

Many large employers have been caught out paying workers a flat rate which has meant they have been underpaying and also penalised by the Fair Work Commission.

Instead, pay your Award covered workers at or higher than the Award rate and make sure you are covering all Award entitlements as well as, for example, overtime, allowances, leave loading etc.

Key takeaways

It is important to understand the National Employment Standards.
Check the applicable industry award, enterprise agreement (if any) and Fair Work legislation to see if your workers have other entitlements when you prepare employment contracts and also when an employee query their entitlements.
Enterprise agreement terms only apply if they are more generous than the applicable award or National Employment Standards.
Avoid paying your Award covered workers a flat rate that means they are underpaid compared to their Award entitlements.

As always, if you have questions or need clarifications, reach out for advice.

Book my free consult to discuss

Fair Work minimum pay rate increase from 1 July 2021

Employment

Fair Work minimum wage increase 1 July 2021

Fair Work minimum pay rate increase from 1 July 2021

1 July 2021

Pay rates have gone up as of 1 July 2021 across Australia.

The national minimum wage has increased to $20.33 per hour (up from $19.84) or $772.60 per week (up from $753.80).

On 16 June 2021, the Fair Work Commission announced a 2.5 per cent increase to the national minimum wage, following its Annual Wage Review. This increase applies from the first full pay period starting on or after today.

Employees covered by awards will also have base rates increased by 2.5 per cent, however, these increases to award wages begin on different dates for different groups of awards.

Casual employees that the national minimum wage applies to must receive a minimum $25.41 per hour including their 25 per cent casual loading.

Most award wages will increase from 1 July 2021, with the following exceptions for industries that have been hit hard by COVID:

wages in the Retail Award will increase from 1 September 2021;
wages in 21 other awards where the Fair Work Commission deemed there were exceptional circumstances will increase from 1 November 2021. A list of these awards can be found at Annual Wage Review 2021.

Employees covered by awards will have their base rate increase from the first full pay period starting on or after the relevant date.

Feeling stuck ?

Be sure to refer to the Fair Work Ombudsman's free online tools available to help employers comply with their workplace obligations, they also reflect the new pay rates.

And feel free to reach out if you have any questions about this change, we're glad to help!

I need help with pay rates

Employment

Should I hire a casual or part-time worker?

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Should I hire a casual or part-time worker?

15 January 2021

Many business owners mistakenly think that hiring and classifying a worker as a casual is a safe bet because they can simply stop giving the employee any shifts if things don’t work out and be done with them without any consequences.

This isn’t the case.

Casuals have certain rights and we’ll explain these below along with some guidance on how you can choose which worker is best for your business.

In a hurry ? jump ahead below.

Table of Contents

15 January 2021

Casual worker characteristics

Unpaid casual worker leave entitlements

Long term casuals

Casuals may have the right to convert to full-time or part-time

Casuals can apply for unfair dismissal

When will a casual worker will suit ?

Guidance for when not to hire a casual worker

What’s the difference in entitlements ?

Awards

What sort of advice do I need ?

Golden tip

Let’s start with the characteristics of a casual employee and go from there.

Casual worker characteristics

Your casual worker is going to work in this way:

without any guarantee of work hours
irregular work hours (i.e. no pattern of Tues, Wed weekly etc)
doesn’t get paid sick or annual leave
employer can end their employment without notice, unless notice is required by a registered agreement, award or employment contract.

Unpaid casual worker leave entitlements

While your casual workers are not paid for leave, they are entitled to:

2 days unpaid carers leave
2 days unpaid compassionate leave per occasion
5 days unpaid family and domestic violence leave (in a 12-month period)
unpaid community service leave

Long term casuals

If a casual has been on your books for 12 months or more, then they are a long term casual and are entitled to:

request flexible working arrangements
take parental leave.

Casuals may have the right to convert to full-time or part-time

Your casual worker may have the right to request to convert to full-time or part-time employment after a certain period. You’ll need to follow the rules that apply in any applicable award about casual conversation.

Casuals can apply for unfair dismissal

Casual employees may apply for unfair dismissal if they meet certain requirements like having worked a minimum period of 6 months (if your business has 15 or more employees) and also if they have worked for your business on a regular and systematic basis.

Regular and systematic means that they can show a pattern of work over the past 12 months or more.

When will a casual worker will suit ?

If you have an unpredictable workflow, a casual is suitable for your business.

An unpredictable work flow means that because demand for your business offering fluctuates, you don’t know how many workers you’ll need on a particular day. This is typically the case for retailers but may also be the case for many other businesses as well.

Guidance for when not to hire a casual worker

You should not hire a casual worker if you know you need them on set days of each week or most weeks because it's not the correct classification.

If you know you need a worker for a set number of days per week, for

example, if you know that you’ll need your worker Tuesday and Wednesday each week and those hours aren’t going to fluctuate week to week, then your worker should be a part-time employee, and yes, part-time employees do get paid entitlements.

What’s the difference in entitlements ?

Casual workers

A casual worker is paid a base rate just like part-timer and full-timer with a 25% loading on top. The extra amount is called a casual loading. The reason it's paid is to make up for the fact that these workers don’t get annual leave or sick leave and their hours aren't certain.

Also, the loading makes it worth a workers time to come into work if they have been called in at the last minute.

Part time workers

A part-time worker gets a pro rata of a full-time worker’s entitlements.

For example, a part time worker that works 2 days per week is paid 40% of a full-time worker’s entitlements. The calculation is simply 2 days / 5 days = 40%.

So, for annual leave, this means 40% x 20 days = 8 days of annual leave per year.

And, for sick leave, this means 40% x 10 days = 4 days of sick leave per year.

Awards

Be sure to check the Fair Work Ombudsman website to see if an award applies for your industry so you can read about entitlements for both casuals and part-time workers.

An award sets out an employee’s minimum entitlements and you can use the award as a guide for choosing.

If you need more guidance choosing, seek advice.

What sort of advice do I need ?

It’s a good idea to get legal then accounting advice, and in that order.

Why ?

A lawyer can listen to your plans about how you’d like to utilise the worker in your business and help you classify whether your worker should be either a casual worker or part-time worker.

An accountant can then help you with budgeting, forecasting for wages, taxes, superannuation and setting up your payroll system including payslips.

Of course, after your initial consultation with a lawyer and accountant, it’s a good idea to check in if work circumstances change and you aren’t sure if a casual classification is will be right going forward.

Golden tip

While there is plenty of information to consider when choosing your worker, to avoid any overwhelm, it’s best to start with an understanding of how often you need your worker in your business.

If you aren’t sure how many days a week you’ll need the worker, then a casual classification may be right, but consider if the casual worker is on for 12 months or more whether they will have the right to switch to part-time or full-time per any Award that applies.

Accountants and lawyers can also guide you with your decision.

Do you have questions or comments about hiring workers ? Be sure to leave them below.

I need help hiring workers

Employment

The Australian Fair Work Commission’s 21 day limitation period calculation & extension grants

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Australian Fair Work Commission's 21 day limitation period calculation & extension grants

Updated: 27 January 2021

Both unfair dismissal and general protections applications have a strict lodgement due date and extensions are granted in exceptional circumstances. Here’s a guide so you know exactly how the limitation periods apply.

21 days

Employees have 21 days from the date of a dismissal to lodge an unfair dismissal application.

The 21 day lodgement time frame is found in section 394 of the Fair Work Act 2009 (Cth).

Calculation

Below are the key rules for how the 21 days are counted.

Day of dismissal not counted

The actual day of the dismissal is not counted; the 21 days starts on the day following the dismissal.

Weekends and public holidays

Only if the final day falls on a weekend or public holiday will the 21 days extend until the next business day. If the public holidays are during the 21 days, the 21 days will not extend out.

Public holidays

Below are the days the Fair Work Commission counts as public holidays.

New years day
Australia day
Good friday
Easter monday
Anzac day
Christmas day
Boxing day

For state or local public holidays like the queens birthday, electronic submissions can be made, even through the local Commission offices are closed.

Consequences of a late lodgement

If an employee lodges an unfair dismissal outside the 21 day limitation period, an employer may make a jurisdictional objection.

Extension grants

Extensions are granted for exceptional circumstances, so keep this in mind.

That is, circumstances that are:

out of the ordinary course
unusual
special , or
common

Delay reason

The commission must consider the delay reason.

Case examples

Courtesy of the Fair Work Commission, we have an idea of which exceptional circumstances have warranted an extension grant to give you an idea of applications that may be accepted.

Resignation with a future date of effect

Nohra v Target Australia Pty Ltd [2010] FWA 6857 (Roberts C, 22 October 2010), [(2010) 204 IR 389].

Length of time outside time frame: 15 days

The employee resigned and gave 7 months’ notice to be the primary carer for her sick mother-in-law. The employer ended the employment while the employee was on carer's leave. The employee believed that the timeframe for lodgement was only relevant to unfair dismissal and not relevant for constructive dismissal.

Outcome: the extension of time was granted.

Illness

Ovenden v Fortezza Pty Ltd T/A High Country Automotive Group [2010] FWA 3863 (Deegan C, 20 May 2010).

Length of time outside timeframe: 26 days

The employee’s delay was due to depression and anxiety exacerbated by work stress. The employee had been dismissed while he was on personal leave and was covered by a medical certificate. The employer had refused to accept the medical certificates and had claimed the employee had abandoned his employment.

Outcome: the extension of time was granted.

Technical issues

Johnson v Joy Manufacturing Co Pty Ltd t/as Joy Mining Machinery [2010] FWA 1394 (Lawler VP, 25 February 2010).

Length of time outside timeframe: 4 days

The employee had problems twice while trying to lodge their application on the Fair Work website within time but was unable to submit the application. The application was then posted to Fair Work Australia. Fair Work found the applicant had made a bona fide attempt to make an application before the expiry of the 14 day period and that it was just and equitable to exercise the discretion to extend time (note the current 21 day limitation period was formerly 14 days).

Outcome: the extension of time was granted.

Do you have questions or comments about the Fair Work limitation period or extension grants? Be sure to leave them below.

Help me with an Australian Fair Work Commission question

Fair Work jurisdiction and jurisdictional objection guide

Employment

Fair Work jurisdiction & unfair dismissal jurisdictional objection guide

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Fair Work jurisdiction and jurisdictional objection guide

Updated: 29 January 2021

Jurisdiction is a fancy word that simply means the legal power to make a decision on a matter.

And, when we’re talking about the Fair Work Commission’s jurisdiction, we are talking about Fair Work’s power to deal with certain matters.

Here's what you need to know about the Fairwork's jurisdiction.

In a hurry? You can jump ahead below.

Table of Contents

Jurisdictional objection

Objection, first

Time limitation

Minimum employment period

Wrong employer

Multiple applications

Casual

Contractor not employee

High income threshold

National workplace relations employee

Genuine redundancy

Small business dismissal code

Employee resignation

Restructure

Ways to make the objection

So what exactly is a jurisdictional objection? We’ll cover that first.

Jurisdictional objection

An employer is able to make a jurisdictional objection.

For example, if they are claiming that the Commission does not have jurisdiction to deal with an application.

Or, the employer could claim that the person may not be eligible to make the application at all.

Below I will take you through some common jurisdictional objections employers can make in the Fair Work Commission.

Objection, first

In all cases, if there is a jurisdictional objection, the Commission must first deal with the jurisdictional objection, BEFORE the original employee application.

For example, if an employee lodges an application for unfair dismissal out of time and the employer raises a jurisdictional objection, this matter will need to be addressed first, then, if the Commission grants an out of time lodgement, the original claim for unfair dismissal can then be handled.

Below are examples of jurisdictional objections for an employee’s unfair dismissal application.

Time limitation

Employees have 21 days to lodge an unfair dismissal or general protections application. If an employee lodges outside this limitation period, the employer may claim the Commission does not have jurisdiction to deal with the matter.

The Commission may grant out of time lodgement in exceptional circumstances.

Minimum employment period

In the case of an unfair dismissal, an employee must have worked for at least 6 months or for one year in the case of a small business employer (with fewer than 15 employees).

Now, if the employee has not worked the minimum period, the employer may make a jurisdictional objection.

Keep in mind, there are certain absences during an employment that do not count towards the minimum employment period. You can read about those here.

Wrong employer

If the employee includes details of the wrong business entity on a Fair Work application form that is not the employer, then there is also another jurisdictional issue.

Multiple applications

If the employee made multiple applications about a dismissal, for example, an unfair dismissal and general protections claim, this may also give rise to a jurisdictional objection from the employer.

Casual

The employee was a casual employee and was not employed on a regular and systematic basis and there was no reasonable expectation of continuing employment.

Contractor not employee

If the applicant is a contractor and not an employee e.g. to complete a specific project which finished, they won’t be able to make an unfair dismissal claim.

High income threshold

If the applicant is earning more than the high income threshold, they won’t be able to apply for unfair dismissal. The threshold is updated annually each 1 July.

National workplace relations employee

The employee was not a national workplace relations system employee.

Genuine redundancy

Employees that believe a redundancy was not genuine per section 389 meaning may lodge an unfair dismissal.

If the employee did follow the measures in an Award or enterprise agreement this the employer can raise a jurisdictional objection.

Small business dismissal code

If you are a small business that’s followed the small business dismissal code, you can raise this as an objection to an employee application.

Employee resignation

If you did not dismiss the employee but the employee resigned voluntarily, you can raise this as an objection.

Restructure

If the employee was demoted but not significantly but they are still employed, you can raise an objection to an unfair dismissal claim.

Ways to make the objection

In response to the employee’s F2 (unfair dismissal) application, the employer would lodge an F3 - employer response to an unfair dismissal application and may include objections in that form.

Also, the employer may lodge a form F4 - objection to application for unfair dismissal application.

Do you have questions or comments about a jurisdictional objection? Be sure to leave them below.

I need help with a jurisdictional objection please

Employment

Meaning of Australian employer and Australian based employee

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Meaning of Australian based employer and Australian based employee

Updated: 29 January 2021

The meaning of Australian employer and Australian based employee is important.

Why?

Because it determines whether an employee can make a claim under employment legislation.

Jurisdictional claims

Specifically, the meaning of Australian based is important for a jurisdictional claim.

For example, whether a court has jurisdiction (the authority) to deal with a particular matter.

Employee claim

For example, an employee may claim they are an employee for Fair Work purposes like an unfair dismissal claim and because of this, Fair Work has jurisdiction to deal with the employee's claim.

Employer response

On the other hand, an employer may claim an employee is not Australian based and is not eligible to make a claim about their employment with the Fair Work Commission.

By doing this, the employer is raising a jurisdictional objection.

Below is the definition of Australian based employer and employee in section 35 of the Fair Work Act.

FAIR WORK ACT 2009 - SECT 35

Meanings of Australian employer and Australian-based employee

(1) An Australian employer is an employer that:

(a) is a trading corporation formed within the limits of the Commonwealth (within the meaning of paragraph 51(xx) of the Constitution); or

(b) is a financial corporation formed within the limits of the Commonwealth (within the meaning of paragraph 51(xx) of the Constitution); or

(d) is a Commonwealth authority; or

(e) is a body corporate incorporated in a Territory; or

(f) carries on in Australia, in the exclusive economic zone or in the waters above the continental shelf an activity (whether of a commercial, governmental or other nature), and whose central management and control is in Australia; or

(g) is prescribed by the regulations.

(2) An Australian-based employee is an employee:

(a) whose primary place of work is in Australia; or

(b) who is employed by an Australian employer (whether the employee is located in Australia or elsewhere); or

(3) However, paragraph (2)(b) does not apply to an employee who is engaged outside Australia and the external Territories to perform duties outside Australia and the external Territories.

Case study

Application of section 35 - Meanings of Australian employer and Australian-based employee

In the case of Mr Nabor Fuentes v Department of Foreign Affairs and Trade (U2017/13595), Fair Work found that Mr Fuentes was not an Australian based employee so unfair dismissal provisions in the Fair Work did not apply.

Below are the key points in the case:

It does not matter if a person is located in Australia or elsewhere, an employee that’s employed by an Australian employer is an “Australian-based employee’.
Mr Fuentes falls within section 35(2)(b) below but is caught by the exception in section 35(3) below, that is, he was an employee ‘engaged outside Australia and the external Territories to perform duties outside Australia and the external Territories.’

Section 35(2) and (3) Fair Work Act 2009 (Cth):

(2) An Australian-based employee is an employee:

(b) who is employed by an Australian employer (whether the employee is located in Australia or elsewhere); or

[3) However, paragraph (2)(b) does not apply to an employee who is engaged outside Australia and the external Territories to perform duties outside Australia and the external Territories.

Mr Fuentes was hired in Canada to perform the duties associated with his role at the Australian High Commission in Ottawa.
Also, Mr Fuentes’ employment agreement was signed in Ottawa. And, subsequent renewals of his contract occurred in Ottawa. And Mr Fuentes in fact performed his duties in Canada.

The finding meant that the unfair dismissal provisions in the Fair Work Act did not apply to Mr Fuentes and he was not able to bring an unfair dismissal application under the Act.

From the example above you can see that the meaning of 'Australian based' is important for employment claims in the Fair Work Commission.

Do you have questions or comments about whether an employee is Australian based? Be sure to leave them below.

I need help with an employment matter

Employment

Transfer of employment to an associated entity – is an employee’s service continuous?

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Transfer of employment to an associated entity - is an employee's service continuous?

Updated 23 March 2022

A transfer of employment to an associated entity happens if an employee is going to start work for for a business that has a connection to the former business, they are an associated entity. We'll get into the meaning of this later.

An employee's service won't always be continuous in a transfer of business and this is important, because this will impact employee and employer rights for entitlements and even for unfair dismissal claims.

For example, if an employee's employment is classed as continuous after transfer of business, the employee can apply for unfair dismissal shortly after their employment transfers to the new entity and don't have to wait out the minimum employment period in section 383 of the Fair Work Act 2009 (Cth).

Table of Contents

When does former service for an employer count?

Notice to an employee if their prior service will count

Section 384 Fair Work Act 2009 (Cth)

Associated entity

Control

Bringing it all together

When does former service for an employer count?

In a transfer of employment situation, an employee’s service for their old employer will count towards their service period with the new employer per s. 22(7) Fair Work Act 2009 (Cth) if:

the entities are associated; and
if the employee becomes employed by the new associated entity within 3 months.

Notice to an employee if their prior service will count

Written notice to an employee about whether their previous period will count is very important and employers get this wrong too many times. Why? because employers may be dealing with experienced business lawyers that are not familiar with employment law as well, in particular section 384 of the Fair Work Act.

Section 384 Fair Work Act 2009 (Cth)

Section 384 states that for the service of an employee to be continuous, the new employer must not have informed the employee in writing before the new employment started that their previous period of service with the old employer would not be recognised: s. 384 Fair Work Act 2009 (Cth).

Basically, if an employee does not get written notice that a former employment period won't be recognised, the employee’s employment is continuing and the employee is simply working for an associated entity.

So, if an employer wants an employee's employment to start fresh after a transfer of business to an associated entity, they need to give the employee a letter saying their former employment period will not count.

Below we’ll go through the associated entity meaning to clarify.

Associated entity

What is an associated entity for a transfer of business situation?

The associated entity meaning is found in s.50AAA of the Corporations Act 2001 (Cth).

An entity (the associate) may be an associated entity of another entity (the principal) in these cases:

the associate and principal are related bodies corporate
the principal controls the associate
the associate controls the principal and the operations, resources or affairs of the principal are material to the associate
the associate has a qualifying investment in the principal, has significant influence over the principal and the interest is material to the associate
the principal has a qualifying investment in the associate, has significant influence over the principal and the interest is material to the principal, or
a third entity controls both the principal and the associate and the operations, resources or affairs of the principal and the associate are both material to the third entity.

Because one feature of an associated entity is that the principal controls the associate, we’ll look at the definition of control next.

Control

Control is defined in s.50AA of the Corporations Act 2001 (Cth).

One entity controls another when the first entity can make decisions that determine the financial and operating policies of the second entity.

Bringing it all together

If you are an employee wondering if your employment is going to be continuous after a transfer of business, you need to check if there was a transfer to an associated business; you can run some ASIC company searches yourself or have a lawyer help you with this.

Then, you need to check if you have a letter from the new employer stating that your former employment period would not be recognised. If you have such a letter, then your employment is not continuing. Your employment has started fresh from the time you signed a new contract or started work for the new employer's entity. This may impact your ability to apply for unfair dismissal and certain entitlements, so you should get legal advice.

If you are an employer that's purchasing a business with a link to the former business (an associated entity), make sure you are clear with your lawyer about whether a former employment period will be recognised.

A lawyer helping an employer can take care of notice to employees per section 384 and help you structure the business sale per your goals.

Do you have questions or comments about a transfer of employment? Be sure to leave them below or reach out to us for help.

Help with a transfer of business query

Employment

Minimum working hours per shift in Australia

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Minimum working hours per shift in Australia

Updated 26 September 2022

While there is maximum weekly working hours in Australia, there is also minimum working hours per day. It is important you know what they are whether you are an employer or an employee.

Understanding the minimum hours an employer must offer per shift can be confusing for employees. Australian employers must give their workers shifts that satisfy the minimum working hours for their industry. So what are the minimum hours per shift for casual and part-time workers in Australia?

There is no simple answer to this question. In general, it is 2 or 3 hours a shift but it varies depending on the industry you work in. Minimum working hours per shift vary across industries.

You can find the minimum working hours for a shift in the applicable Australian award on the Fair Work Ombudsman website. Once you start checking you will see there is a pattern of an average of 3 hours. But you need to check the relevant award for your industry to find out exactly what the minimum working hour per shift are.

Awards, enterprise agreements and contracts

What if you have an enterprise agreement or employment contract in place? Both of these will also outline the minimum working hours per shift if you are not a full-time employee.

So, which one applies if there is a conflict between the agreements and award for your industry?

The one with the most favourable terms for the employee will apply. For example, if the minimum hours per shift in an industry award or enterprise agreement are more than an employment contract, they will override the contract.

This also works the other way round. Where the terms in an employment contract are more favourable than an enterprise agreement or award, the hours in the contract trumps them.

Allocating less than minimum shift hours

Employers cannot give an employee less hours than minimum shift hours. Why? In a nutshell, because it disadvantages employees.

For example, a typical disadvantage involves an employee travelling for some time to get to work only to be told 'it's not busy, you can go home' two hours into their shift. In this case the employer could still be liable to pay the worker for more than two hours work if the minimum shift hours are three.

There are rules about minimum hours that apply across many industries in Australia.

If an employer allocates an employee less than the minimum shift hours, the employee may claim the wages for the minimum shift hours they should have been allocated, even if they did not work those hours.

Minimum shift hours by industry

The table below table shows the minimum shift hours for some industries and what section of the award you can find them in.

Check your award if you are unsure of the minimum shift hours that apply in your case. You may typically find your minimum shift hours under sections labelled callouts, hours, casual employment, part-time employees or recall allowance.

Some awards have a separate clause for part-time and another for casuals, but they usually have the same minimum number of shift hours.

Award	Hours	Award section(s)
Building and Construction General On-site Award	3 hours	34.2 (o)
Cleaning Services Award 2010	2 hours	28.8
Clerks - Private Sector Award 2010	3 hours	11.5, 12.4, 27.4
Fast Food Industry Award 2010	3 hours	12.2, 12.7
Fitness Industry Award 2010	1 hour/3 hours	12.4, 13.4 & 13.5
General Retail Award 2010	3 hours	12.5, 20.10
Hair and Beauty Industry Award 2010	3 hours	12.5, 13.6
Health Professionals and Support Services Award 2010	2 hours, 3 hours	10.4, 28.4

If your industry award is not included in the table, look it up on the Fair Work Ombudsman’s website.

Do you have questions or comments about minimum shift hours? Leave them below or book a free consultation.

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Employment

Period of employment definition

Photo by Toa Heftiba on Unsplash

Period of employment definition

31 December 2019

Calculating an employee’s period of employment is important if you are responding to an employee's application for an unfair dismissal remedy.

As you will see below, the definition is not so so straight forward so here's a guide.

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Section 384 Fair Work Act - period of employment

Continuous service

Regular and systematic

Reasonable expectation of continuing employment

Excluded period

Unauthorised absence

Unpaid authorised absence

Unpaid personal leave not counted

Injury covered by private insurer is unpaid leave not counted

Absences that count towards the minimum employment period

Injury covered by private insurer is unpaid leave & not counted

Key message

First, we'll start with the period of employment definition in the Fair Work Act.

Section 384 Fair Work Act - period of employment

Below I have underlined the important parts of the definition which we'll break down after.

FAIR WORK ACT 2009 - SECT 384

Period of employment

(1) An employee's period of employment with an employer at a particular time is the period of continuous service the employee has completed with the employer at that time as an employee.

(2) However:

(a) a period of service as a casual employee does not count towards the employee's period of employment unless:

(i) the employment as a casual employee was on a regular and systematic basis; and

(ii) during the period of service as a casual employee, the employee had a reasonable expectation of continuing employment by the employer on a regular and systematic basis; and

(b) if:

(i) the employee is a transferring employee in relation to a transfer of business from an old employer to a new employer; and

(ii) the old employer and the new employer are not associated entities when the employee becomes employed by the new employer; and

(iii) the new employer informed the employee in writing before the new employment started that a period of service with the old employer would not be recognised;

the period of service with the old employer does not count towards the employee's period of employment with the new employer.

Below is a break down the definition so you'll know how Fair Work calculates an employee minimum work period.

Continuous service

Continuous service is a period of unbroken service that an employee is employed, not counting exclusions for certain types of unpaid leave and certain types of unpaid authorised absence.

Regular and systematic

What is employment on a regular and systematic basis?

It has to do with the employment and not the employee's hours worked.

So, what helps to prove regular and systematic employment?

A clear pattern or roster of hours is strong evidence.

Also, the term ‘regular’ implies a repetitive pattern and does not mean frequent, often, uniform or constant.

The term ‘systematic’ requires that the engagement be ‘something that could fairly be called a system, method or plan’.

Where there is no clear pattern or roster, evidence of regular and systematic employment can be established where:

the employer offered suitable work when available at times that the employee could work, and
work was offered and accepted regularly, not occasionally or irregularly.

Reasonable expectation of continuing employment

What is a reasonable expectation of continuing employment?

The Fair Work Act does not define this term, it depends on certain circumstances.

One test that has been applied is if during a period of at least six months before a dismissal, the employee had a reasonable expectation of continuing employment on a regular and systematic basis.

Transfer of employment

An employee's service with one employer (first or old employer) will count as service with another employer (second or new employer) if two conditions are met:

the second employer is an associated entity of the first employer, and
an employee becomes employed by the second employer within 3 months of their employment being terminated by the first employer.

If these 2 conditions are not met, then the period of service with the first employer will not be counted towards service with the second employer.

Excluded period

Below are examples of when continuous service will be excluded:

resignation
dismissal
transfers of employment that don’t meet the transfer of employment definition in section 22(7) of the Fair Work Act.

An excluded period does not break an employee’s continuous service with their employer.

But, it does not count towards the length of the employee’s continuous service.

Periods of casual employment may affect the length of an employee’s continuous service for an application for an unfair dismissal remedy.

The following are periods that are excluded from the definition of ‘service’ and therefore for calculating the minimum employment period:

• any period of unauthorised absence, and

• certain periods of unpaid leave or unpaid authorised absence (community service leave, certain stand downs and prescribed leave or absences are exceptions).

Unauthorised absence

The following are examples of unauthorised absence:

• periods of industrial action engaged in by employees, and

• other absence from work contrary to employer directions.

Unpaid authorised absence

The following are examples of unpaid authorised absence:

• unpaid parental leave, and

• unpaid personal/carer’s leave.

The above periods do not break service however they are not counted in the calculation of the minimum period of employment.

Unpaid personal leave not counted

Wales v 3 Point Motors Pty Ltd T/A 3 Point Motors [2012] FWA 3817 (Jones C, 22 May 2012).

An employee worked for exactly 6 months and had part of 1 days' sick leave without pay. With that period of leave deducted the employee had not met the minimum period of employment.

Injury covered by private insurer is unpaid leave not counted

L.M. v Standard & Poor’s (Australia) Pty Ltd [2012] FWA 9634 (Roe C, 12 November 2012).

The employee's absence for 5 weeks due to illness was paid for by the employee's income protection insurance. Because the employer was not legally obligated to provide income protection insurance, the employee was on unpaid leave.

Absences that count towards the minimum employment period

What is included in the minimum period of employment?

The following are examples of unpaid authorised absence that are counted as service towards the minimum period of employment:

• community service leave (e.g. jury service), and

• certain stand downs.

Injury covered by private insurer is unpaid leave & not counted

Workpac Pty Ltd v Bambach [2012] FWAFB 3206 (Ross J, Sams DP, Booth C, 31 May 2012).

An employee's absence while on workers compensation (paid by an insurer on behalf of the employee) was not an unpaid authorised absence and not an excluded period.

Bringing it all together

Check the definition for a period of employment,

As always, be sure to get advice if you are in doubt.

Do you have questions or comments about an employee's period of employment? Be sure to leave them below.

I need employment advice

Employment

Do small businesses have to pay redundancy?

Photo by Toa Heftiba on Unsplash

Do small businesses have to pay redundancy?

Updated 12 August 2022

Making staff redundant is never an easy thing to do. There is a lot to consider. One question is, do small businesses have to pay redundancy? This is a great question. But a complex one to answer. The short answer is that most small businesses do not have to pay redundancies but there are some exceptions.

So let’s take a look at what that means.

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Table of Contents

What is a small business?

Do small businesses have to provide benefits?

Do small businesses pay taxes?

Notice period when making an employee redundant

Key message

What is a small business?

First of all let’s define what we mean by a small business. Australian law defines a small business as one that has less than 15 employees. Based on the section 23 of the Fair Work Act 2009 (Cth), calculate this in the following way:

All employees working for the company at the time.
The person whose employment you are terminating.
Any other person whose employment you intend to terminate.
Only count employees who are part time or full time.
Do not include casual employees unless you employ them on a regular, systemic basis at the time.
Associated entities, such as a group of companies, count as one.

Do small businesses have to provide benefits?

Section 121 of the Fair Work Act 2009 (Cth) means that most small businesses do not have to pay redundancies to their employees when making their position redundant. But it does depend on the industry you operate in and the enterprise agreement you have in place.

The following are some industry awards that require you to pay employees redundancies:

Even if you do not need to make redundancy payments, you still need to pay out the final benefits owed to anyone you make redundant.

This can be complex to fully understand, so talk to your lawyer for guidance. You do not want to make any mistakes or you could end up in hot water.

The following table from section 119 of the Fair Work Act 2009 (Cth) sets out how to calculate what you need to pay eligible employees based on their term of service.

Table 1—Redundancy pay period

Employee’s period of continuous service with the employer on termination	Redundancy pay period
Less than 1 year	Nil
At least 1 year but less than 2 years	4 weeks
At least 2 years but less than 3 years	6 weeks
At least 3 years but less than 4 years	7 weeks
At least 4 years and over	8 weeks

Do small businesses pay taxes?

This is not taxation advice so make sure you check the ATO website for further information.

When an employer makes a redundancy payment, it is tax free up to certain limits if it is a genuine redundancy. The tax free component of a redundancy payment may include:

An amount paid in lieu of notice.
A severance payment of a certain number of weeks for every year worked for the employer.
A golden handshake or gratuity.

The remainder of the redundancy payment is taxed at a concessional rate up to the employment termination payment cap. Tax on the rest of the amount is at the normal amount.

Notice period when making an employee redundant

When making an employee redundant, follow the established standard minimum notice period set out in section 117 of the Fair Work Act 2009 (Cth).

The minimum notice required for the years continuously worked for an employer is as follows:

1 year or less — 1 week's notice.
More than 1 to 3 years — 2 weeks’ notice.
More than 3 to 5 years — 3 weeks’ notice.
More than 5 years — 4 weeks’ notice.
Additionally, if an employer is more than 45 years old and worked for the employer for a minimum of 2 years, they receive an extra week’s notice.

An employer should tell an employee in person of their intention to make them redundant or send a notice to their home address.

Key message

It is important to check your applicable award or enterprise agreement to see if your small business needs to pay redundancy. Also remember that a genuine redundancy is when and you decide the job is no longer required in the organisation and you will not be hiring to fill the position in future.

And, as always, be sure to get advice if you are in doubt.

Do you have questions or comments about redundancy pay? Be sure to leave them below.

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