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Modern awards and the NES

Modern awards and National Employment Standards (NES) protect the employment entitlements and rights of all working Australians. They are the basis for all Australian employment conditions. Most employees are covered threefold, by the Fair Work Act 2009, the NES and by the Modern Award that covers their relevant industry (if any). Employees may also be covered by multiple modern awards depending on industry and classification of their work, as there are separate awards for each industry.

A Modern Award will outline the minimum wage, pay rates, penalty rates and all other relevant remuneration conventions and standards. No matter your agreement or industry, your pay should reflect the standard of the modern award. It is an employer’s responsibility to keep up to date with annual minimum wage pay reviews.

From 1 July 2019, the National Minimum Wage (including the National Training wage and the National Minimum wage for those who are differently able) increased by 3%. Penalties will apply to those employers who fail to meet these obligations.

The NES sets out 10 minimum standards that all employees are entitled to, no matter their award/agreement, salary, or industry. The 10 minimum standards contain policies including:

  1. maximum 38 weekly hours of work;
  2. requests for flexible working arrangements;
  3. annual leave;
  4. personal/carers leave (including sick) and compassionate leave;
  5. community service leave;
  6. long service leave;
  7. public holidays;
  8. notice of termination;
  9. redundancy pay; and
  10. the provision of the Fair Work Information Statement upon commencing employment.

There are some exclusions to the Modern Award i.e. those who are classified as ‘high income employees’, and those workers who are engaged under an enterprise agreement (an enterprise agreement being a collective agreement made between multiple workers/employers) are unlikely to be covered by a Modern Award. However, whilst their pay rate, and some of their contract terms may differ, no employment agreement can operate outside of the minimum standards set by the NES. Rather, all employment agreements should complement the NES.

All three agreements/legislation overlap. Where one employee may not be covered by one, they are covered by the other, maintaining that workers/employees are entitled to universal entitlements. For example, if a worker is not covered by either an enterprise agreement or an award, they will be covered by the National Minimum Wage, or their wage should be reflective of the standards set by the Modern Award.

There are several helpful online resources that can help you determine how much you should be paid/pay you employees including the Award Finder Tool and the Pay Calculator available at: https://www.fairwork.gov.au/awards-and-agreements/awards/find-my-award

If you have any questions about how much you should be paid or how much you should be paying your employees from 1 July 2019, please contact (03) 7019 9200 or Amy Nhan at amy.nhan@aderolaw.com.au.