As an employer, you need be aware of the national workplace relations system and know your responsibilities.
Modern awards
Modern awards are industry or occupation-based minimum employment standards which apply in addition to the National Employment Standards (NES). They were created to establish one set of minimum conditions for employers and employees across Australia who work in the same industries and occupations.
From 1 January 2010 modern awards replaced thousands of federal and state-based awards (pre-modern awards) and cover most workplaces. Modern awards also replace Division 2B State Awards from 1 January 2011. The commencement of modern awards means that there have been changes to minimum terms and conditions for many employees. The changes vary by state, industry and employer.
A modern award will cover all employers and employees who perform work in an industry or occupation covered by that particular modern award. However, modern awards may not apply to some managers or higher income employees (who have an appropriate guarantee of annual earnings of more than $118 100 p.a. during the year ending 30 June 2011 - this amount is indexed annually) even if a modern award covers the industry in which they work.
Modern awards will not apply to an employer who is bound by an enterprise award. An enterprise award regulates the terms and conditions of employment only in the single business specified in that award.
Transitional arrangements for modern award pay rates
Transitional arrangements, found in most modern awards, give employers and employees time to adjust to the changes in pay rates.
Modern awards may contain:
- model transitional provisions that phase in changes to pay rates from 1 July 2010 (or from February 2011 for employers who were covered by a Division 2B State award) across a four year period
- specific transitional provisions unique to the modern award and dealing with pay and / or other conditions - see the relevant award for details
- no transitional arrangements - the full terms of the modern award apply from 1 January 2010 (1 January 2011 for employers who were covered by a Division 2B State award).
National Employment Standards (NES)
The Fair Work Act 2009 provides a safety net of enforceable minimum employment terms and conditions through the National Employment Standards (NES).
The NES sets out 10 minimum workplace entitlements which apply to all employers and employees in the national workplace relations system from 1 January 2010 (however only certain entitlements apply to casual employees).
The NES replaces the non-pay rate provisions of the Australian Fair Pay and Conditions Standard (the Standard), which applied up to and including 31 December 2009.
Fair Work Information Statement
From 1 January 2010, all employers covered by the national workplace relations system have an obligation to give each new employee a Fair Work Information Statement (the Statement) before, or as soon as possible after, the employee starts employment.
State system employers moving into the national workplace relations system
From 1 January 2010, sole traders, partnerships, other unincorporated entities and non-trading corporations in New South Wales, Queensland, South Australia and Tasmania are covered by the national workplace relations system rather than their own specific state system.
There are special rules for these employers to help them move into the national workplace relations system including:
- State awards that covered these employers and employees before 1 January 2010 (known as Division 2B State awards) continued to apply from 1 January 2010 until 31 December 2010.
- Employers and employees who were covered by a Division 2B State award will generally be covered by a modern award from 1 January 2011.
- However in most cases, the conditions in Division 2B State awards will continue to apply until the end of the full pay period commencing before 1 February 2011 (depending on the transitional arrangements in the relevant modern award).
- When covered by Division 2B State awards, employees must receive conditions that are at least equal to the minimum entitlements in the NES and the national minimum wage.
- State employment agreements (known as Division 2B State agreements) will continue to apply until terminated or replaced. Employees under State employment agreements must also receive conditions that are at least equal to the minimum entitlements in the NES or the relevant modern award or, if there is no operative modern award, the national minimum wage. Non-pay rate provisions in a relevant modern award also apply to an employee covered by a collective Division 2B State agreement, however the agreement will prevail to the extent of any inconsistency.