Do the national employment standards override employee agreement terms ?

14 December 2019 

National Employment Standards (NES) are minimum terms for all Australian employees. 

So, if an employment agreement has less favourable terms than the NES, then yes, the NES will override the terms in an employee agreement.

In a hurry? Jump ahead below.

In addition to the NES, employees are also protected by various legislation which sets out their minimum employee entitlements. 

So what exactly am I referring to when I say 'legislation'?

I am talking about any applicable enterprise agreement, Award and also employment legislation and regulations like the Fair Work Act and the Fair Work regulations and of course, the NES.

What you need to know is that employer’s may include more generous terms than what the law stipulates but not less favourable terms in an employee agreement.

Employee Agreements - what applies

When it comes to the NES, the word minimum is key.

The NES are the minimum terms. And, there’s nothing stopping an employer from providing more generous terms than those in the NES to an employee in an employee agreement.

So, an employee agreement may have more favourable terms than the NES but not less favourable. 

What do they NES cover?

We’ve gone into detail about the NES in this article. Briefly they cover: 

Interaction of NES, Awards, Employee Agreements and Legislation

When thinking about employment law and how the elements fit together, its important to know that employees have rights because of: 

  • Awards 
  • Enterprise Agreements 
  • National Employment Standards
  • Legislation 
  • Employment Agreements.

Also, an employer cannot pick and choose which of the above will apply. Each has a role in protecting employee rights.

Employment agreement with more favourable terms

An employee can hold an employer to an employment agreement that has more favourable terms e.g. higher pay, more annual leave etc.

And, an employer cannot claw back more generous terms written into an employment agreement and seek to rely on an Award, Enterprise Agreement or NES. 

Case study #1 Employer asks employee to work 45 + hours per week

An employer writes that the employee is required to work 45+ hours per week in an employment agreement despite the existence of an applicable Award (Joinery and Building Trades Award 2010) that says the employee will work an average of 38 hours and the NES which state a maximum of 38 hours per week

In this case, the employer is in breach of both the Award provisions and the NES. The employer cannot enforce term that says 45+ hours per week on an ongoing basis.

Case study #2 Employee agreement with higher pay than Award

In this case, the employee worked as a paralegal, covered by the Legal Services Award 2010. 

Payroll noticed the employee was being paid more than the Award and reduced the employee's pay to the Award amount without getting legal advice.

The employer cannot do this. 

Also, the employer won't be able to claw back the additional amount stated in the employee agreement. The employee can hold the employer to the payment terms in the employee agreement.

Got questions or comments about employment agreements? Be sure to leave them below. 


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Vivian Michael
 

Vivian Michael is a lawyer and founder of Michael Law Group. Vivian's mission is to deliver the best quality business legal services to entrepreneurs launching an Australian business, wherever they are in the globe.

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