The Fair Work Act is the key federal legislation that governs employment and workplace relations in Australia and applies to most Australian employers. The employment laws are also governed by Modern Awards which are specific to certain industries. The national employment tribunal (the Fair Work Commission) makes modern awards, which are quasi-statutory instruments that set out a range of minimum terms and conditions of employment, which are equal to or more generous than the National Employment Standard for particular industries and occupations (e.g., covering matters such as hours of work and rostering, meal and rest breaks, overtime and penalty rates for night time and weekend work).
Awards (modern awards) are legal documents that outline the minimum pay rates and conditions of employment. There are more than 100 industry or occupation awards that cover most people who work in Australia. The Fair Work official website provides a List of Awards available to various Job Sectors. To be covered by an award, an employee must:
- Work in an industry or business covered by the award
- Work in a job classification that is covered by the award
- Not be in a job or industry that is excluded from the award.
Awards apply to employers and employees depending on the industry they work in and the type of job worked. Every award has information about who it covers. Awards don’t apply when an employer has a registered agreement in place. An employer can be covered by more than one award depending on the jobs the employees do. The modern award provides entitlements such as:
- Hours of work
- Penalty rates
Who is covered by a Modern Award?
Modern awards apply to all employees covered by the national workplace relations system. Modern awards are industry or occupation-based and apply to employers and employees who perform work covered by the award.
When Modern Awards don’t apply?
A modern award will outline all the terms and conditions of employment for most employers and employees. If the business is covered by a registered agreement, it is usually the case that the conditions of a modern award are no longer relevant. However, if the base rates of pay in an agreement are lower than those in the relevant modern award, the base rates of pay in the modern award will apply.
Some employers and employees will not be covered by an award or registered agreement. When an employee is not covered by an award or agreement, they are considered to be award and agreement free. In these situations, the National Minimum Wage and the NES will form the minimum terms and conditions of employment.
What is the Modern Awards Objective?
The Fair Work Commission must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions. A modern award may include terms about any of the following matters:
- Minimum wages (including wage rates for junior employees, employees with a disability and employees to whom training arrangements apply),
- Type of employment, such as full-time employment, casual employment, regular part-time employment, and shift work, and the facilitation of flexible working arrangements, particularly for employees with family responsibilities;
- Arrangements for when work is performed, including hours of work, rostering, notice periods, rest breaks and variations to working hours;
- Overtime rates;
- Penalty rates,
- Annualized wage arrangements
- Leave, leave loadings and arrangements for taking leave;
- Procedures for consultation, representation, and dispute settlement.
- Any allowance included in a modern award must be separately and clearly identified in the award.
§ 132 – 149 Fair Work Act 2009 (Cth)
Hours & Pay Regulations
An employee can work a maximum of 38 ordinary hours in a week. An employer must not request or require an employee to work more than the following hours of work in a week unless the additional hours are reasonable:
- For a full‑time employee its 38 hours; or
- For an employee who is not a full‑time employee, it should be the lesser of 38 hours; and the employee’s ordinary hours of work in a week.
The hours an employee works in a week are taken to include any hours of leave, or absence, whether paid or unpaid, that the employee takes in the week and that are authorized:
- By the employee’s employer; or
- By or under a term or condition of the employee’s employment; or
- By or under a law of the Commonwealth, a State or a Territory, or an instrument in force under such a law.
Spread of Hours
The time of the day ordinary hours are worked is called the spread of hours (e.g. between 7 am – 7 pm). Time worked outside the spread of ordinary hours can attract overtime rates.
Modern Awards and Enterprise Agreements may provide for Averaging of Hours of Work
A modern award or enterprise agreement may include terms providing for the averaging of hours of work over a specified period. The average weekly hours over the period must not exceed:
- For a full‑time employee its 38 hours; or
The terms of a modern award or enterprise agreement may provide for average weekly hours that exceed the hours if the excess hours are reasonable for the purposes of calculating maximum work hours.
Averaging of Hours of Work for Award/Agreement free Employees
An employer and an award/agreement free employee may agree in writing to an averaging arrangement under which hours of work over a specified period of not more than 26 weeks are averaged. The average weekly hours over the specified period must not exceed:
- For a full‑time employee its 38 hours; or
The terms of a modern award or enterprise agreement may provide for average weekly hours that exceed the hours if the excess hours are reasonable for the purposes of calculating maximum work hours. § 62 – 64 of Fair Work Act, 2009.
Flexible Work Arrangements
An employee may request a change in working arrangements for given circumstances:
- The employee is the parent, or has responsibility for the care, of a child who is of school age or younger;
- The employee is a carer (within the meaning of the Carer Recognition Act 2010);
- The employee has a disability;
- The employee is 55 or older;
- The employee is experiencing violence from a member of the employee’s family;
- The employee provides care or support to a member of the employee’s immediate family, or a member of the employee’s household, who requires care or support because the member is experiencing violence from the member’s family.
The employee is not entitled to make the request unless, for an employee other than a casual employee, the employee has completed at least 12 months of continuous service with the employer immediately before making the request. The employer must give the employee a written response to the request within 21 days, stating whether the employer grants or refuses the request. § 65 of Fair Work Act, 2009.
Overtime is when an employee works extra time. It can include work done:
- Beyond their ordinary hours of work
- Outside the agreed number of hours
- Outside the spread of ordinary hours.
An award, enterprise agreement or other registered agreement will set out when overtime rates apply.
Time off instead of Overtime Pay
Some awards and registered agreements allow an employee to take paid time off instead of being paid overtime pay. This is also known as ‘time in lieu’, ‘time off in lieu’ or ‘TOIL’. § 62 of Fair Work Act, 2009.
A rest break allows an employee to rest for a short period of time during work hours. Rest breaks are also referred to as “crib breaks”, “rest pauses” or “tea breaks”. A meal break is a longer period of uninterrupted rest that allows the employee to eat a meal.
A break for a meal is not a condition provided under the National Employment Standards.
Awards, enterprise agreements and other registered agreements provide for paid and unpaid rest breaks and meal breaks, including:
- The length of the breaks
- When they need to be taken
- The rules about payment.
Breaks Between Shifts
Awards and registered agreements may provide for a minimum amount of time off between the end of one shift and the start of another.
Crib Breaks – Continuous Shift Work
Employees on continuous shiftwork are normally entitled to a crib break (usually 20 minutes) during each shift. Such breaks are usually counted as time worked and comprise part of the hours of the rostered shift.
A rostered day off (RDO) is a day in a roster period that an employee doesn’t have to work. A roster is a timetable that shows the days and times employees are required to work. When an employer wants to change an employee’s regular roster or ordinary hours of work, they have to discuss it with the employees first.
An employee’s day off can be paid or unpaid, depending on how RDOs are set out in an award or registered agreement. When RDOs are paid, it is because an employee has worked extra hours that add up over a set period of time and this is taken as an RDO.
A roster is a timetable that shows the days and times employees are required to work. When an employer wants to change an employee’s regular roster or ordinary hours of work, they have to discuss it with the employees first. They have to:
- Provide information about the change (eg. what the change will be and when)
- Invite employees to give their views about the impact of the change
- Consider these views about the impact of the change.
Awards, enterprise agreements, and other registered agreements can set out extra rules about changing rosters and how and when employees are given rosters.
The eight public holidays specified in the Fair Work Act are:
- Jan. 1: New Year’s Day
- Jan. 26: Australia Day
- Good Friday
- Easter Monday
- April 25: Anzac Day
- Queen’s Birthday: different dates in various parts of the country
- Dec. 25: Christmas Day
- Dec. 26: Boxing Day
Any other days, or part-day, declared or prescribed by or under a law of a State or Territory to be observed generally within the State or Territory, or a region of the State or Territory, as a public holiday.
Substitution of Public Holidays
If under or in accordance with a procedure under a law of a State or Territory, a day or part-day is substituted for a day or part-day that would otherwise be a public holiday, then the substituted day or part-day is the public holiday.
A modern award or enterprise agreement may include terms providing for an employer and employee to agree on the substitution of a day or part-day for a day or part-day that would otherwise be a public holiday.
An employee is entitled to be absent from his or her employment on a day or part-day that is a public holiday in the place where the employee is based for work purposes.
Payment for Absence on a Public Holiday
If an employee is absent from his or her employment on a day or part-day that is a public holiday, the employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work on the day or part-day.
Pay for Work on Holiday
Employees get paid at least their base pay rate for all hours worked on public holidays. Awards, enterprise agreements and other registered agreements can provide entitlements for working public holidays, including:
- Extra pay (e.g. public holiday rates)
- An extra day off or extra annual leave
- Minimum shift lengths on public holidays
- Agreeing to substitute a public holiday for another day.
§ 114-116 of Fair Work Act, 2009.
For each year of service with his or her employer, an employee is entitled to:
- 4 weeks of paid annual leave; or
- 5 weeks of paid annual leave, if:
- A modern award applies to the employee and defines or describes the employee as a shift worker for the purposes of the National Employment Standards; or
- An enterprise agreement applies to the employee and defines or describes the employee as a shift worker for the purposes of the National Employment Standards; or
- The employee qualifies for the shift worker’s annual leave entitlement.
The employee qualifies for the shift worker’s annual leave entitlement.
Accrual of Leave
The leave accumulates gradually during the year and any unused annual leave will roll over from year to year. Annual leave accumulates when an employee is on: paid leave such as paid annual leave and paid sick and carer’s leave, community service leave including jury duty, long service leave.
Annual leave does not accumulate when the employee is on: unpaid annual leave, unpaid sick/carer’s leave, unpaid parental leave, and unpaid family and domestic violence leave.
Award/agreement free employees who qualify for the shift worker entitlement
An award/agreement free employee qualifies for the shift worker annual leave entitlement if:
- The employee is employed in an enterprise in which shifts are continuously rostered 24 hours a day for 7 days a week; and is regularly rostered to work those shifts, and regularly works on Sundays and public holidays; or
- The employee is in a class of employees prescribed by the regulations as shift workers for the purposes of the National Employment Standards.
Taking Paid Annual Leave
Paid annual leave may be taken for a period agreed between an employee and his or her employer. The employer must not unreasonably refuse to agree to a request by the employee to take paid annual leave.
Public Holidays During Annual Leave
If the period during which an employee takes paid annual leave includes a day or part-day that is a public holiday the employee is taken not to be on paid annual leave on that public holiday.
If a public holiday falls when an employee is on leave, their entitlement to the public holiday depends on whether they are taking paid leave or unpaid leave. If a public holiday falls during a period of paid leave (e.g. annual leave or sick leave), the employee has to be paid for the public holiday. This includes any hours that fall on a part-day public holiday. If an employee takes sick leave either side of a public holiday, they should still be paid for the public holiday if it is on a day that they would normally work. However, if the employee is taking annual leave at the same time as unpaid parental leave, they won’t be paid for the public holiday.
The public holiday will not be counted as annual leave or sick leave. This means that public holiday hours will not be taken away from the employee’s amount of built-up paid leave.
Payment for Annual Leave
An employee takes a period of paid annual leave, the employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work in the period. If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave.
Paid annual leave must not be cashed out except in accordance with cashing out terms included in a modern award or enterprise agreement or an agreement between an employer and an award/agreement free employee. A modern award or enterprise agreement may include terms providing for the cashing out of paid annual leave by an employee. § 86-94 of Fair Work Act, 2009.
Effective July 1, 2020, the national minimum wage is $19.84 per hour. Employees covered by an award or registered agreement are entitled to the minimum pay rates, including penalty rates and allowances in their award or agreement.
The Australian Minimum Wage is subject to change & may not be up to date. Please see the link for updated rates.
An employee is entitled to 10 days of paid personal/carer’s leave for each year of service with his or her employer.
An employee’s entitlement to paid personal/carer’s leave accrues progressively during a year of service according to the employee’s ordinary hours of work and accumulates from year to year. An employee may take paid personal/carer’s leave if the leave is taken:
- Because the employee is not fit for work because of a personal illness, or personal injury, affecting the employee; or
- To provide care or support to a member of the employee’s immediate family, or a member of the employee’s household, who requires care or support because of a personal illness, or personal injury, affecting the member; or an emergency affecting the member.
If the period during which an employee takes paid personal/carer’s leave includes a day or part-day that is a public holiday in the place where the employee is based for work purposes, the employee is considered not to be on paid personal/carer’s leave on that public holiday. § 96-101 of Fair Work Act, 2009.
An employee is entitled to 2 days of unpaid carer’s leave for each occasion (a permissible occasion) when a member of the employee’s immediate family, or a member of the employee’s household, requires care or support because of:
- A personal illness, or personal injury, affecting the member; or
- An unexpected emergency affecting the member.
An employee may take unpaid carer’s leave for a permissible occasion as a single continuous period of up to 2 days or any separate periods to which the employee and his or her employer agree. An employee cannot take unpaid carer’s leave during a period if the employee could instead take paid personal/carer’s leave. § 102-103 of Fair Work Act, 2009.
Employees can get parental leave when a child is born or adopted. Parental leave entitlements include:
- Maternity leave
- Paternity and partner leave
- Adoption leave
- Special maternity leave
Parental leave is leave that can be taken when:
- An employee gives birth
- An employee’s spouse or de facto partner gives birth
- An employee adopts a child under 16 years of age.
Employees are entitled to 12 months of unpaid parental leave. They can also request an additional 12 months of leave.
Parental Leave Pay
The first period is a set period of 12 weeks. This needs to be used within 12 months of the birth or adoption of a child and can’t be split into more than 1 period. From 1 July 2020, eligible employees can split their Parental Leave Pay (PLP) so they take it over 2 periods within 2 years.
Flexible Parental Leave Pay
The flexible period:
- is up to 30 days
- usually starts after the first period has ended
- can be used in flexible periods negotiated between the employee and employer
- has to be used within 24 months of a child’s birth or adoption.
An employee is entitled to 2 days of paid compassionate leave for each occasion (a permissible occasion) when a member of the employee’s immediate family, or a member of the employee’s household:
- Contracts or develops a personal illness that poses a serious threat to his or her life; or
- Sustains a personal injury that poses a serious threat to his or her life; or
An employee may take compassionate leave for a permissible occasion if the leave is taken to spend time with the member of the employee’s immediate family or household who has contracted or developed the personal illness or sustained the personal injury or after the death of the member of the employee’s immediate family or household.
An employee may take compassionate leave for a permissible occasion as:
- A single continuous 2-day period; or
- 2 separate periods of 1 day each; or
- Any separate periods to which the employee and his or her employer agree.
§ 104-106 of Fair Work Act, 2009.
Employees who are taking parental leave to care for an adopted child are also entitled to 2 days unpaid pre-adoption leave to attend relevant interviews or examinations. This leave can’t be used if an employer tells an employee to take another type of leave (eg. paid annual leave). Fair Work Act 2009 (Cth), No. 28, §§ 67-85.
An employee is entitled to 5 days of unpaid family and domestic violence leave in a 12-month period. Unpaid family and domestic violence leave is available in full at the start of each 12 month period of the employee’s employment and does not accumulate from year to year and is available in full to part-time and casual employees.
The employee may take unpaid family and domestic violence leave as a single continuous 5-day period or separate periods of one or more days each or any separate periods to which the employee and the employer agree, including periods of less than one day. § 106A – 106B of Fair Work Act, 2009.
An employee who engages in an eligible community service activity is entitled to be absent from his or her employment for a period if the period consists of one or more of the following:
- The time when the employee engages in the activity;
- Reasonable traveling time associated with the activity;
- Reasonable rest time immediately following the activity; and
If the activity is jury service, the employee’s absence is reasonable in all the circumstances. If an employee is absent because of jury service in relation to a jury service summons for a period, or a number of periods, of more than 10 days in total the employer is only required to pay the employee for the first 10 days of absence and the evidence provided in response need only relate to the first 10 days of absence. § 108-112 of Fair Work Act, 2009.
An employee gets long service leave after a long period of working for the same employer. Most employees’ entitlement to long service leave comes from long service leave laws in each state or territory.
Portable long service leave
Australian states and territories have legislation to provide employees in the coal mining, cleaning, and building and construction industries with access to portable long service leave. This means an employee keeps their long service leave entitlement even if they work on different projects for one or more employers. § 113 Fair Work Act 2009 (Cth).
Under the Defense Reserve Service (Protection) Act 2001, an employer cannot hinder a worker from becoming a member of the reserve or a reservist from carrying out defense service. When reservists carry out service, the employer cannot compel them to use annual or long-service leave and must treat the employee as though on leave without pay during call-out and some forms of voluntary, continuous, full-time service. After reservists finish their service, the employer is required to reemploy them in the same capacity.
The employer is not required to pay the employee or make contributions to workers’ compensation or other benefits during the employee’s service. Employers can get a payment under the Employer Support Payment Scheme for most periods of continuous defense service by their employees. Defence Reserve Service (Protection) Act 2001, No. 11, Part 5.
The Fair Work Commission has varied the study leave provisions of the Legal Services Award. Paid study leave has changed from a cap of 4 days for each subject to 20 days in a 12 month period. This leave can be taken to attend a course or prepare for and attend exams that relate to the practical legal training required for the employee’s admission. The new law took effect on the first full pay period on or after 13 August 2018.
Last updated on: July 17th, 2020