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The National Employment Standard - The devil is in the detail!

The National Employment Standard – The devil is in the detail!

Published on February 1, 2010 by Peter Punch

A central feature of the national industrial relations system proposed by the Rudd Labor Government was the establishment of certain minimum employment standards applicable to all employers and employees within this national system. This feature is now found in Part 2-2 of Chapter 2 of the Fair Work Act 2009 (Cth) (“the FW Act”) and became operative on 1 January 2010, at the same time as the Government’s national system of industrial relations came into effect (with some minor exceptions in Western Australia).

The NES applies to most employers across the nation 
If an employer is covered by the national system (and the overwhelming bulk of employers are) then that employer must comply with the minimum standards prescribed by the NES from 1 January 2010, whatever industrial relations rules and regulations, contracts or arrangements that employer has in place. And no exceptions or special rules for “small business” (however defined)!

Are you “NES compliant”?
All employers should be checking that what they provide in their workplace is “NES compliant”. If they do not, or just assume that what they have got will be OK, they risk three things:

  • Running up unfunded liability;
  • Incurring penalties (including for directors) and back pay orders if the Fair Work Ombudsman does an audit of the employer or investigates a complaint (and be warned — the “FWO” is proving to be a very proactive investigating body);
  • Becoming uncompetitive in the labour market.

The 10 NES 
Here are the 10 subjects covered by the NES:

  1. maximum weekly hours of work;
  2. request for flexible working arrangements;
  3. parental leave (and related entitlements);
  4. annual leave;
  5. personal/carer’s leave and compassionate leave;
  6. community service leave;
  7. long service leave;
  8. public holidays;
  9. notice of termination and redundancy pay;
  10. fair work information statement.

In this short piece, the details of the 10 NES cannot be provided or even summarised. But even if that could be done here, nevertheless every employer should check the content of all the NES (easily available on the Fair Work Australia website) against their own arrangements and, to be safe, get professional advice.

It is imperative to check the detail 
Compliance with the NES is, generally speaking, not too hard for most employers– the standards are in many respects on a par with or even less than what many employers already provide. But there is “devil in the detail” that all employers need to get across, to avoid future problems. That is why it is so important NOW to check your arrangements before a problem arises much later on.
Here are some examples of the ‘devil in the detail’ – ie some new aspects that are now minimum standards but not that widespread in private sector workplaces.

“Cashing out” annual leave
Under the NES, an employee who is not covered by an award or an enterprise agreement (eg a managerial or professional employee) can now “cash out” his or her annual leave accrual provided that the employee has a written agreement with the employer for each occasion of “cash out” and the employee keeps a minimum balance of four weeks leave.

Termination of employment and redundancy
The NES imposes a new obligation on every employer to give an employee written notice of termination – hitherto, notice could be given orally and still be a lawful notice. No more.
The NES also gives every employee minimum redundancy pay entitlement in the case of termination due to redundancy of the employee’s position. So employees who did not hitherto have such a right now have a right to redundancy pay (although it is being phased in over time).

The right to request flexible working arrangements 
Under the NES, any employee with the care of a child under school age, or a disabled child under 18, is entitled to request in writing from his or her employer flexible working arrangements. The employer must respond in writing within 21 days, with refusal only allowed where the employer provides “reasonable business grounds”.
These are a few of the details in the NES that are new minimum standards. Employers cannot be complacent about being ‘NES compliant’ – the comparisons have to be done, and inferior conditions corrected. Remember, the obligations apply from 1 January 2010.

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