Last updated on: September 20th, 2023
The Fair Work Act, 2009 is the key federal legislation that governs employment and workplace relations in Australia and applies to most Australian employers with regards to working hours, overtime, rest & certain time offs.
Most industries are governed by their respective Modern Awards which lays down the conditions of employment. The national employment tribunal (Fair Work Commission) makes modern awards, which are quasi-statutory instruments that set out a range of minimum terms and conditions of employment(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), which are equal to or more generous than the National Employment Standard for particular industries and occupations.
Awards (modern awards) are legal documents that outline the minimum pay rates and conditions of employment. There are 122 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
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 employee 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 employee for the purposes of the National Employment Standards; or
- The employee qualifies for the shift employee’s annual leave entitlement (this relates to award/agreement-free employees).
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 (this does not apply to casual employees).
If an employee’s employment ends during what would otherwise have been a year of service, the employee accrues paid annual leave up to when the employment ends.
Annual leave accumulates when an employee is on paid leave such as paid annual leave, paid sick and carer’s leave, paid family and domestic violence leave, community service leave including jury duty, and 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.
An employee doesn’t accumulate annual leave while being paid by the Paid Parental Leave Scheme if the person is taking unpaid leave from their employer at this time.
Award/agreement free employees who qualify for the shift employees entitlement
A shift employee not bound by an award or agreement shall be entitled to annual leave if –
- The employee is employed in a shift which is 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 employees 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 the employer.
Employee shall not be considered to be on paid annual leave if:
- Public Holiday – 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 considered not to be on paid annual leave on that public holiday.
- Other Leaves – If the period during which an employee takes paid annual leave includes a period of any other leave (other than unpaid parental leave) or a period of absence from employment for community service leave, the employee is considered not to be on paid annual leave for the period of that other leave of absence.
Payment for Annual Leave
The employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work during the period of annual leave.
Termination of Employment
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.
Cashing Out of Paid Annual 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. Annual leave can only be cashed out when a written registered agreement allows it, and an employee needs to have at least 4 weeks of annual leave left over. Annual leave doesn’t accumulate for a period of annual leave that has been cashed out.
The payment for cashed out annual leave has to be the same as what the employee would have been paid if they took the leave. § 86-94 of Fair Work Act, 2009.
An employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated:
- at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labor; or
- because of the insolvency or bankruptcy of the employer.
The amount of the redundancy pay equals the total amount payable to the employee for the redundancy pay period at the employee’s base rate of pay for his or her ordinary hours of work.
On application by the employer, the FWC may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that the FWC considers appropriate.
Rate of pay for redundancy payments
Redundancy pay is paid at the employee’s base pay rate for their ordinary hours of work, but doesn’t include:
- incentive-based payments and bonuses
- monetary allowances
- overtime or penalty rates
- any other separately identifiable amounts.
Any outstanding entitlements also need to be paid out – including annual leave and long service leave that the employee hasn’t taken.
The following employees don’t get redundancy pay:
- employees whose period of continuous service with the employer is less than 12 months
- employees employed for a stated period of time, an identified task or project, a particular season
- employees fired because of serious misconduct
- casual employees
- trainees engaged only for the length of the training agreement
- employees of a small business.
Job Search Entitlement of Paid Time Off – During the Redundancy Notice Period employees are entitled to time off for 1 day for a job search. When an employer has given notice of termination to the employee in circumstances of redundancy, the employee must be allowed time off without loss of pay of up to 1 day each week of the minimum notice period for the purpose of seeking other employment. Art 119 – 120 of the Fare Work Act, 2009.
Effective July 1, 2023, the national minimum wage is $23.23 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 the employer.
Entitlement to 10 days of personal or carer’s leave is calculated based on an employee’s hours of work, not days. The 10 days of personal leave can be calculated as 1/26 of an employee’s ordinary hours of work in a year.
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.
If a female employee has an entitlement to paid personal/carer’s leave, she may take that leave instead of taking unpaid special maternity leave.
Cashing Out – Paid personal/carer’s leave must not be cashed out unless agreed under terms included in a modern award or enterprise agreement.
Pay – If an employee takes a period of paid personal/carer’s leave, the employer must pay the employee at the employee’s base rate of pay. § 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, 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 separate periods to which the employee and 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.
This does not apply to casual employees unless they have been employed on a casual basis for a sequence of periods of employment during a period of at least 12 months or have a reasonable expectation of continuing employment with the employer on a regular and systematic basis.
Transfer of employment situations in which the employee is entitled to continue on leave etc.
If there is a transfer of employment in relation to an employee, and the employee has already started a period of leave when his or her employment with the first employer ends, the employee is entitled to continue on that leave for the rest of that period. If there is a transfer of employment in relation to an employee; and the employee has, in relation to the first employer, already taken a step that is required or permitted in relation to taking a period of leave, the employee is taken to have taken the step in relation to the second employer.
Unpaid Parental Leave
Employees are entitled to 12 months of unpaid parental leave for the birth of a child of the employee or the employee’s spouse or de facto partner, or the placement of a child with the employee for adoption; and when the employee has or will have a responsibility for the care of the child. The employee must take leave for a single continuous period.
They can also request an additional 12 months of leave. The request must be in writing and must be given to the employer at least 4 weeks before the end of the available parental leave period.
There are no restrictions on married or de facto couples from taking more than 8 weeks of unpaid parental leave at the same time. Each parent is allowed to take up to 12 months of unpaid parental leave and request an extension of up to 12 months.
If the leave is birth‑related leave for a female employee who is pregnant with or gives birth to, the child, the period of leave may start up to 6 weeks before the expected date of birth of the child; or earlier, if the employer and employee so agree, but must not start later than the date of birth of the child. If the leave is adoption‑related leave, the period of leave must start on the day of placement of the child.
An employee is not entitled to adoption‑related leave unless the child that is, or is to be, placed with the employee for adoption is, or will be, under 16 as at the day of placement, or the expected day of placement, of the child; and has not, or will not have, lived continuously with the employee for a period of 6 months or more as at the day of placement, or the expected day of placement, of the child; and is not a child of the employee or the employee’s spouse or de facto partner.
Limited entitlement to take concurrent leave
If one of the employees (in the case of a couple) takes a period of unpaid parental leave 6 weeks before the birth of a child (day of placement of the child in case of adoption leave), the other employee may take a period of unpaid parental leave (the concurrent leave) during the first employee’s period of leave, if the concurrent leave complies with the following requirements:
- the concurrent leave must not be longer than 8 weeks in total;
- the concurrent leave may be taken in separate periods, but, unless the employer agrees, each period must not be shorter than 2 weeks;
Flexible Unpaid Parental Leave
An employee may take up to 100 days of unpaid parental leave (flexible unpaid parental leave) during the 24‑month period starting on the date of birth or day of placement of the child if the requirements are satisfied in relation to the leave. Flexible unpaid parental leave is available in full to part‑time and casual employees. The leave can be taken in a single continuous period or separate periods of one or more days each. Pregnant employees are also allowed to take a portion of their 100 days of flexible unpaid parental leave in the 6 weeks before the child’s due date.
The employee may take the flexible unpaid parental leave whether or not the employee has taken unpaid parental leave under another type of leave available in relation to the child, but such leave in total shall not exceed a 12-month period.
The employee may take flexible unpaid parental leave after taking one or more periods of unpaid parental leave only if the total of those periods is no longer than 12 months, less the employee’s notional flexible period.
Such days of leave shall not include public holidays. The employee’s entitlement to any unpaid parental leave in relation to the child that is not flexible unpaid parental leave ends on the first day the employee takes flexible unpaid parental leave.
A member of an employee couple (the first employee) may take flexible unpaid parental leave on the same day as the other member of the couple (the other employee) is taking unpaid parental leave only if the total of all periods of unpaid parental leave the first employee takes at the same time as the other employee is no longer than 8 weeks. A married or de facto couple is not restricted from taking more than 8 weeks of unpaid parental leave at the same time and each parent is permitted to take up to 12 months unpaid parental leave and request an extension of up to 12 months.
An employee is not entitled to take flexible unpaid parental leave in relation to a child if the child and another child are born during the same multiple births; or are both placed with the employee for adoption and have the same day of placement; and, the employee takes flexible unpaid parental leave in relation to the other child.
If a child is born premature or develops illness at birth, and requires hospitalization, in such cases an employee may agree with his or her employer that the employee will not take unpaid parental leave for a period (the permitted work period) while the child remains in hospital.
An employee shall be allowed to not take parental leave if the child is hospitalized after birth. While an employee is taking unpaid parental leave, the employee is not entitled to take paid personal/carer’s leave; or compassionate leave, unless the permissible occasion is the stillbirth or death of the child in relation to whom the employee is taking unpaid parental leave.
An employer may ask the employee to provide a medical certificate – If a pregnant employee who is entitled to unpaid parental leave continues to work during the 6-week period before the expected date of birth of the child, the employer may ask the employee to give the employer a medical certificate containing a statement of whether the employee is fit for work, if the employee is fit for work, a statement of whether it is inadvisable for the employee to continue in her present position during a stated period because of illness, or risks, arising out of the employee’s pregnancy; or hazards connected with the position.
Still Birth of Child – If a child is stillborn; and an employee would have been entitled to unpaid parental leave that is birth‑related leave, if the child had been born alive, then the employee is taken to be entitled to the unpaid parental leave, despite the stillbirth of the child.
If a child is stillborn or dies during the 24‑month period starting on the child’s date of birth, then an employee who is entitled to a period of unpaid parental leave in relation to the child may, before the period of leave starts, give the employer written notice canceling the leave; or if the period of leave has started, give the employer written notice that the employee wishes to return to work on a specified day.
Keeping in Touch Day
Employees can perform work for their employer on a keeping-in-touch day while they are taking unpaid parental leave. If the employee does so, the performance of that work does not break the continuity of the period of unpaid parental leave.
A day on which the employee performs work for the employer during the period of leave is a keeping-in-touch day if the purpose of performing the work is to enable the employee to keep in touch with the employment in order to facilitate a return to that employment after the end of the period of leave; and both the employee and the employer consent to the employee performing work for the employer on that day.
Parental Leave Pay (PPL)
Parental leave pay (PPL) is payable to an employee for a child for a particular period, which is called the employee’s PPL period for the child. PLP and Dad and partner pay (DAPP) are combined into a single 20-week payment enabling both parents to claim an equal amount of parental leave entitlements. This means that a mother can take 20 weeks of parental leave, or the couple is entitled to share it between themselves with both parents being able to take parental leave at the same time.
The existing maximum duration of 18 weeks of parental leave pay will be combined with the 2 weeks’ father and partner pay, resulting in a single 20-week scheme that can be shared between both parents.
Each parent can receive a maximum of 18 weeks of parental leave pay individually, or a combined total of 20 weeks of parental leave pay. For example, one parent could receive 18 weeks’ pay while the other receives 2 weeks’ pay, or both parents could opt for a 10-week pay period each. Previously, single employees were not eligible for partner pay. Single parents will be able to receive the full 20 weeks’ parental leave pay.
Eligible parents will no longer be required to take the entire 12 weeks consecutively without returning to work. Instead, they can receive parental leave pay in multiple blocks, with each block lasting at least one day. This flexibility allows parents to spread out their leave over a 2-year period from the birth or adoption of their child.
Unpaid Maternity Leave
A female employee is entitled to a period of unpaid special maternity leave if the employee is not fit for work during that period because the employee of pregnancy‑related illness or all of the following apply:
- the employee has been pregnant;
- the pregnancy ends after a period of gestation of at least 12 weeks otherwise than by the birth of a living child;
- the child is not stillborn.
§ 80 of Fair Work Act, 2009.
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
- Dies, or
- a child is stillborn, where the child would have been a member of the employee’s immediate family, or a member of the employee’s household if the child had been born alive; or
- the employee, or the employee’s spouse or de facto partner, has a miscarriage.
This does not apply if the miscarriage results in a stillborn child to a former spouse, or former de facto partner, of the employee.
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.
Pay – If an employee, other than a casual employee, takes a period of compassionate leave, the employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work. § 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 of unpaid pre-adoption leave to attend relevant interviews or examinations. However, an employee is not entitled to take a period of unpaid pre‑adoption leave if the employee could instead take some other form of leave and the employer directs the employee to take another form of leave.
An employee who is entitled to a period of unpaid pre‑adoption leave is entitled to take the leave as a single continuous period of up to 2 days or any separate periods to which the employee and the employer agree. An employee is not entitled to take unpaid pre‑adoption leave unless the employee gives his or her employer notice of the taking of unpaid pre‑adoption leave by the employee. Fair Work Act 2009 (Cth), No. 28, §§ 85.
All employees are entitled to 10 days of paid family and domestic violence leave in a 12-month period. It shall not be prorated for part-time or casual employees.
The full 10-day leave entitlement will be available upfront. It won’t accumulate from year to year if it’s not used.
Employees who start on or after the date that the paid leave entitlement becomes available at their new workplace can access the full 10 days from their first day. Full-time and part-time employees can take paid family and domestic violence leave at their full pay rate for the hours they would have worked if they weren’t on leave. 106A &106B of the Fair Works 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 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
Employees in the coal mining, cleaning, and building and construction industries shall be provided 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).
An employer cannot restrict an employee from becoming a member of the reserve or a reservist from carrying out defense service. The employer cannot compel a reservist employee to use annual or long-service leave and must treat the employee as though on leave without pay during call-out for voluntary, continuous, full-time service during reservist leave. After reservists finish their service, the employer is required to re-employ them in the same capacity.
The employer is not required to pay the employee or make contributions to employees’ 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.