The national workplace relations system is governed by the FW Act. The FW Act provides for various types of industrial instruments that cover employees and contain minimum terms and conditions of employment.
It is important for all employers and employees to know what workplace arrangements are in place.
Who’s covered in the national system?
Employees and employers in:
- New South Wales
- Australian Capital Territory
- Northern Territory
- South Australia
Not all employees and employers in Western Australia come under the national system. Generally employers who are corporations, and their employees, come within the national system, but employers who are unincorporated (such as sole traders and partnerships) and their employees remain in the Western Australian state system.
Example: State or National system in WA
John is a plasterer who runs his own business in Perth. As John’s business grows, he employs two other plasterers to help him on a big apartment project.
As John has not set up a company to run his business, these two employees would be covered by the WA system. In any other state or territory in Australia, John’s employees would be covered by the national system.
John’s business continues to grow and his accountant helps him to set up a company, which then employs John’s employees. These employees would be covered by the national system.
The NES and federal minimum wage
All employees in the national system are entitled to the minimum terms and conditions of employment contained in the National Employment Standards (NES). This is so even if they are also covered by a modern award or enterprise agreement.
You can find more information about the federal minimum wage in the 'Pay' section of the Fair Work Ombudsman website.
An enterprise agreement is a negotiated collective agreement between one or more employers and employees, which has been approved by the Fair Work Commission. The following are examples of enterprise agreements:
- Enterprise agreements made by an employer with a group of employees, or by more than one employer with groups of employees.
- Enterprise agreements made by one or more employers and one or more unions for a genuine new enterprise before any employees that would be covered by the agreement are employed (these are called ‘greenfields agreements’).
Note that if an employee is covered by an enterprise agreement it will provide them with a range of minimum terms and conditions of employment, in addition to those minimum terms and conditions which are provided by the National Employment Standards.
Other types of collective agreements made previously under the Workplace Relations Act 1996 continue to apply until they are terminated or replaced.
If an employee does not have an agreement that covers their employment, an award-based instrument such as a modern award may cover them. Modern awards provide minimum terms and conditions of employment for a specific industry or occupation.
The modern awards section of this website includes information on the most common modern awards that cover the building and construction industry.
Common law contracts
An employer and employee are able to create their own common law contract, which can be written, verbal or implied. A common law contract will be underpinned by the NES and any industrial instrument, which covers the employee’s employment. This means that while the contract can supplement terms and conditions which are provided by the NES and the relevant industrial instrument, employees cannot contract out of or “trade away” these terms.
Common law contracts can provide terms and conditions that are higher than the relevant industrial instrument, but not lower.
Example: Common law contracts and entitlements
A scaffolding business engages Aarav on $30 per hour.
Aarav asks his employer about his allowances and his employer says that he is paid an all-in rate so he isn’t entitled to any allowances. Aarav thinks he might not be getting the correct entitlements.
In this situation, Aarav should contact the ABCC. An employer can pay a rate above what is required by the Modern Award or Enterprise Agreement, but they must ensure that all entitlements due to the employee are met.