Conditions at work

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Basis for Workplace Entitlements

In Australia, many workplace rights and obligations are settled as a result of ‘collective bargaining’ in which unions act on behalf of workers to achieve entitlements such as minimum rates of pay, maximum hours of work, sick leave, annual holidays, and penalty rates for overtime. These are set out in ‘awards’ (minimum conditions relating to an entire industry) or in enterprise agreements (conditions relating to a particular employer or workplace).

There are a number of sources of entitlements for employees. These include:

In the past, the law allowed another kind of individual contract, called an Australian Workplace Agreement (AWA). These are no longer allowed. There are some employees whose conditions of employment are still partly drawn from AWAs. If you think that an AWA might still apply to you then you can get advice about whether it is still in effect by talking to your employer, union, or the Fair Work Ombudsman.

Hot Tip

It can sometimes be difficult to identify which award or collective agreement applies to your employment. To work out what applies to you:

> Ask your employer. Your employer should have information available at the workplace about your entitlements. If your employer tells you that you have no employment entitlements, or that the award does not apply to you, it is a good idea to make enquiries elsewhere.

> Ask your union representative or contact the union directly. The union’s website might contain information about conditions in your industry.

> Contact the Fair Work Ombudsman. You can call 13 13 94 or visit their website for online help.

Unfair contract application

This kind of application is available to some groups of workers only. Employees who are covered by the state system are able to apply to the Industrial Relations Court for variation of their contract of employment if it is unjust. Workers who are independent contractors (and not employees) are able to make an application to the Federal Court or Federal Magistrate’s Court to have the terms of their contract varied if those terms are harsh or unfair.

How to know what applies to me?

The National Employment Standards (‘NES’) apply to everyone in the national system. These are set out in more detail below. In addition to the NES, your employment might be covered by an award or collective agreement.

There has been a lot of change in the system of awards and collective agreements since the mid-1990s. One of the results of these changes is that there are a lot of ‘transitional arrangements’ in place. These arrangements mean that some older awards and collective agreements still apply to some workers, even if they no longer apply generally. The transitional arrangements also affect the wage rates which apply to some workers.

National Employment Standards

The National Employment Standards (NES) provide minimum entitlements for all employees in the national system. The NES provides entitlements in relation to hours of work, flexible working arrangements, parental leave, annual leave, personal leave, community service leave, long service leave, public holidays, notice of termination, and redundancy.


An employee cannot be forced to work more than 38 hours a week, unless the additional hours are reasonable. Whether or not additional hours are reasonable is worked out by looking at a range of factors set out in section 62 of the Fair Work Act 2009, including safety, the employee’s personal circumstances, the needs of the workplace, the availability of overtime penalty payments, the amount of notice given, and the usual pattern of work in the industry.

Employees can agree to an arrangement for ‘averaging’ their hours over a period of up to six months. The outcome of these arrangements is that the employee works an average of their usual weekly hours over a set period of time – for example, a full time employee might work an average of 38 hours over six months. Averaging arrangements can be especially useful for workplaces where some periods are much busier than others.

The averaging arrangement has to be set out in an award or collective agreement. If no award or collective agreement applies to the employee, then the averaging arrangement (consistent with the above) can be made in writing between the employer and the employee.

Parental leave and flexible working arrangements

The NES provides for 52 weeks of unpaid parental leave for all employees in Australia. For an employee to be eligible for parental leave they:

A pregnant employee can take leave up to six weeks before the expected date of birth.  The other parent can start their leave any time in the 12 months following the birth or adoption of the child.

The leave can be shared between the two parents, so long as they take no more than 24 months between them. Except for three weeks (reducing their overall entitlement) the parents cannot take leave at the same time. 

If an employee has used up their 52 weeks of leave, they can request up to 52 weeks of additional leave. The employer must answer the request in writing. The employer can only refuse a request for additional parental leave on reasonable business grounds.

A pregnant employee has some additional entitlements:

At the end of parental leave, an employee has the right to return to the job that they had before they took leave, or the nearest possible position with the employer.

Unfortunately, some employees experience discrimination at the time of taking parental leave, or returning to work. For more information about your entitlements in relation to parental leave, contact the Fair Work Ombudsman or the NSW Anti-Discrimination Board.

Paid Parental Leave Scheme

This scheme is for working parents of babies and children born or adopted on or after 1 January 2011.

Parents and primary carers are eligible for a maximum of 18 weeks pay at the National Minimum Wage. The Australian government pays the employer who then pays it to the employee.

On 1 January 2103 the Paid Parental Leave scheme was expanded to include the Dad and Partner Pay, a 2 week payment for working fathers or partners (including same-sex partners). This is paid by the government directly to the employee's bank account. Claims for the Dad and Partner Pay can be made for babies born or adopted on or after 1 January 2013.

See the Paid Parental Leave Scheme on Centrelink's website to check the eligibility criteria for a parental leave payment.

Annual leave

Every permanent employee is entitled to four weeks of paid leave for each year that they work for the employer. Some shift workers are entitled to five weeks of annual leave. An employer cannot unreasonably refuse a request for annual leave.

Many awards and collective agreements provide for leave loading. Leave loading is extra pay which an employee receives when he or she takes annual leave. It is often 17.5% of the employee’s ordinary pay for the period of leave. Although many employees are entitled to leave loading because of awards and collective agreements, the NES does not provide for leave loading.

Employees can make arrangements to ‘cash out’ annual leave (that is, be paid instead of taking the leave). These kinds of arrangements can only apply to employees with a lot of accrued leave, and they cannot leave the employee with less than four weeks’ accrued leave. The agreement must be in an award or collective agreement, or in writing if the employee is not covered by an award or collective agreement.

An employer can direct an employee to take accrued leave, so long as the direction is reasonable. However, an employer cannot apply a ‘use it or lose it’ policy to accrued leave – an employee must be allowed to take their leave, or be paid for it under a cashing out arrangement.

Personal leave and compassionate leave

The NES provides for personal leave, which includes sick leave and carer’s leave together. Permanent employees are entitled to 10 days of paid personal leave for each year of service with the employer. Unused leave accumulates from year to year, and cannot be subject to a cap on accrual.

An employee can take personal leave when:

Additionally, all employees (including casual employees) are entitled to unpaid leave of up to two days on each occasion that they have to care for someone in their family or household who is sick or injured, or experiencing an unexpected emergency.

There are very strict rules for cashing out accrued personal leave. Every time leave is cashed out, the employer and employee must enter into a new agreement about cashing out. The cashing out must not leave the employee with less than 15 days of accrued leave. The arrangement must be included in an award or collective agreement.

In addition to personal leave, employees can also take compassionate leave if someone in their family or household dies, or has a life-threatening illness or injury. For casual employees, compassionate leave is unpaid leave. For all other employees, compassionate leave is paid leave.

Community service leave

This is a form of leave available for:

If the leave is for jury service, then:

If the leave is for emergency management, then:

Long service leave

The NES does not specifically provide for long service leave. Employees’ entitlement to long service leave can occur in either of the following ways:

In New South Wales, the relevant law is the Long Service Leave Act 1955 (NSW). This Act provides for employees to have two months’ long service leave after 10 years of service, and one additional month of leave for every five years of service after that.

Public holidays

Employees are entitled to a paid day away from work on days which are public holidays in the place where the employee works. However, an employer is allowed to request that an employee work on a public holiday, so long as the request is reasonable. An employee may agree or disagree to work on the public holiday, but their decision must be reasonable.

Whether or not an employer or an employee is being reasonable can be worked out by looking at the factors set out in section 114 of the Fair Work Act 2009. Those factors include:

The NES sets out certain days which are public holidays and also recognises that states can (and do) legislate regarding the dates for public holidays.


An employee is entitled to redundancy pay if the employee is terminated at the employer’s initiative because they no longer require the job to be done by the employee or anyone (except where this is due to the ordinary and customary turnover of labour) or because of the insolvency or bankruptcy of the employer.

Severance pay is only available to certain employees. Severance pay is not payable to:

The NES provides for redundancy pay but this can be only calculated from 1 January 2010 for employees that are not entitled to redundancy pay under awards and registered agreements.

Awards and registered agreements can provide more beneficial arrangements however these arrangements must not be less than the NES.

The NES calculates severance pay on a sliding scale with reference to the employee’s period of service with the employer:

Years of service Weeks of severance pay
Less than 1 0
1 - 2 4
2 - 3 6
3 - 4 7
4 - 5 8
5 - 6 10
6 - 7 11
7 - 8 13
8 - 9 14
9 - 10 16
10 or more 12
The Fair Work Commission can give exemptions to employers who cannot afford to pay the minimum amount of severance pay.

If an employer goes into liquidation or bankruptcy and owes the employees money (including severance pay) then the government General Employee Entitlements Scheme might be available to the employees. This scheme pays some employee entitlements if the employer is not able to. More information is available from the company liquidator, or the Department of Education, Employment, and Workplace Relations, which administers the GEERS scheme.

Individual flexibility arrangements

An Individual Flexibility Arrangement (IFA) can be used to vary certain terms of a modern award or enterprise agreement as it applies to that particular employee covered by the IFA. You can contact FWO about what can be included in an IFA.

It is your employer’s responsibility to ensure that you have genuinely agreed to an IFA. Your employer must ensure that under an IFA your conditions are better overall when compared to the modern award or enterprise agreement the IFA varies. An IFA must be put in writing.

An IFA may be terminated by agreement or by either party giving the required written notice. Modern awards require 28 days notice but this may be different in an enterprise agreement (but no more than 28 days). An IFA made in accordance with a modern award or an enterprise agreement will end when a new enterprise agreement begins operating.


Employers are required to make superannuation contributions for their employees and some contractors.

You are eligible for superannuation contributions if you work full-time, part-time or on a casual basis and are:

You are not eligible if you are doing work of a domestic or private nature (for example, housekeeping) for less than 30 hours a week.

Employers must make superannuation contributions of at least 9% of the employee’s ordinary pay. The money is paid into a complying fund, and then preserved (invested) until the employee retires.

Employers who fail to make superannuation contributions on behalf of their employees can be prosecuted, as well as being required to pay the unpaid contributions together with any interest.

Superannuation must be paid within 28 days of the end of each financial quarter – that is, four times a year. Your superannuation fund can confirm whether payments have been made. If payments are not made, the employer may have to pay a penalty to the Tax Office. For more information contact the Australian Taxation Office superannuation hotline.


Hot Topics 76: Employment and the law. Hot Topics is intended as an introductory guide only and should not be interpreted as legal advice. Whilst every effort is made to provide the most accurate and up-to-date information, the Legal Information Access Centre does not assume responsibility for any errors or omissions. 

© Library Council of New South Wales 2011, updated 2013. Copyright in Hot Topics is owned by the Library Council of New South Wales. Material contained herein may be copied for the non-commercial purpose of study or research, subject to the provisions of the Copyright Act 1968 (Cth).

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