Australia: Fair Work Bill 2008 – Terms And Conditions Of Employment

Last Updated: 8 January 2009

The Fair Work Bill was introduced into Parliament on 25 November 2008 and is currently before a Senate Committee which is conducting an inquiry. The legislation is expected to be passed in a form similar, but unlikely to be identical, to the Fair Work Bill, sometime after February 2009 with most key provisions due to take effect as of 1 July 2009.

The main terms and conditions of employment for national system employees under the Fair Work Bill 2008 are contained in the National Employment Standards (NES) with the minimum wages for such employees to be set by a Minimum Wage Panel of Fair Work Australia.

A national system employee is, generally speaking, an employee employed by a constitutional corporation.

Other terms and conditions will be contained in the modern awards, enterprise agreements and workplace determinations.

National Employment Standards

The NES contains minimum terms and conditions of employment for all national system employees. Our update in August 2008 provided information on the NES, which were released in June 2008.

The requirement on employers to comply with the NES is proposed to commence on 1 January 2010, that is, six months after the likely commencement of the other provisions of the Fair Work Bill.

An employer must not contravene a provision of the NES and, if it does, will be subject to a maximum penalty of $6,600 (for individuals) or $33,000 (for corporations) and any other order the Court considers appropriate. The orders that a Court may make in relation to a contravention of the NES includes an injunction to prevent, stop or remedy the contravention and reinstatement (if an employee's employment was terminated).

The NES are paramount. They cannot be excluded by a modern award or an enterprise agreement. However, a modern award or an enterprise agreement may contain terms that are ancillary or incidental to the operation of an NES providing it is not detrimental to an employee when compared with the NES.

There are 10 NES. A summary of each NES is set out below.

  1. Maximum weekly hours
    This Standard is almost identical to the current Australian Fair Pay & Conditions Standard on the same topic, with additional considerations for what are reasonable additional hours and a reduction to the averaging period.
    The standard hours of work for a full time employee are 38 hours per week and for an employee who is not a full-time employee, his or her ordinary hours of work in a week.
    An employer is not permitted to request or require an employee to work more than his or her standard hours, and the employee may refuse to do so, unless the additional hours are reasonable.
    In determining whether additional hours are reasonable or unreasonable, the employer must consider the same factors as currently exist under the Australian Fair Pay and Conditions Standard as well as:
    1. whether the employee is entitled to any overtime, penalty rates or other compensation that reflects the additional hours to be worked;
    2. the usual patterns of work in the industry in which the employee works;
    3. the nature of the employee's role and level of responsibility; and
    4. whether the additional hours accord with the averaging terms of a relevant modern award.

    For non-award employees, an employer and an employee may agree to average the 38 hours over a period of not more than 26 weeks.
  2. Requests for flexible working arrangements
    This is likely to be a new obligation for most employers (if it currently exists it may be under an industrial instrument or it may have been considered in the context of fulfilling obligations under anti-discrimination legislation).
    An employee will be entitled to request a change in his or her working arrangements if he or she is a parent, or has a responsibility for the care, of a child under school age. The requested change must be to assist the employee to care for the child.
    A permanent employee may make the request if he or she has completed at least 12 months of continuous service with the employer. A casual employee may make a request if he or she is a long term casual employee (having over 12 months service) and has a reasonable expectation of continuing employment on a regular and systematic basis.
    The request must be in writing and contain details of the change sought, and of the reasons for the change. The employer must then inform the employee in writing, within 21 days, whether the request is granted or refused. The request may only be refused on reasonable business grounds and, if the request is refused, the employer must include the reasons for the refusal.
    The NES does not give any guidance on what would constitute "reasonable business grounds".
    The NES also gives examples of what might constitute changes in working arrangements – such as changes in hours of work, changes in patterns of work and changes in location of work.
  3. Parental leave and related entitlements
    The entitlement to unpaid parental leave under the NES generally reflects those entitlements that currently exist under the Australian Fair Pay & Conditions Standard.
    The right to take parental leave is available for permanent employees who have completed at least 12 months service immediately before the expected date of birth of the child. Long term casual employees are also entitled to parental leave providing they would have a reasonable expectation of continuing employment on a regular and systematic basis.
    Parental leave has also been extended to same sex couples.
    An employee will also now have the right to request an extension to their period of leave for a further 12 months. The employee will be required to provide their employer with 4 weeks notice and the employer may only reject the request if there are reasonable business grounds to do so. The employer must give written reasons within 21 days if it rejects an employee's request.
    There is also a new obligation on an employer to consult with an employee on unpaid parental leave if the employer makes a decision that will have a significant effect on the status, pay or location of the employee's pre-parental leave position. The employer is required to take all reasonable steps to give the employee information about, and an opportunity to discuss, the effect of the decision on the pre-parental leave position.
    The NES does not contain provisions relating to parental leave replacement employees. However, it retains the entitlement to return to the employee's pre-parental leave position or, if that position no longer exists, to an available position for which the employee is qualified and suited nearest in status and pay to the former position.
  4. Annual leave
    The NES provides for an employee to have 4 weeks of paid annual leave and, in the case of a shift worker under a modern award, 5 weeks paid annual leave. This quantum remains unchanged from the Australian Fair Pay and Conditions Standard.
    The leave will accrue progressively during a year of service according to the employee's ordinary hours of work and will accumulate from year to year.
    The annual leave is to be taken at a time agreed between an employee and employer. However, the employer cannot unreasonably refuse to agree to a request by an employee to take leave. An award may provide for an employer to require an employee to take leave in particular circumstances but only if the requirement is reasonable. An employer may require an award free employee to take leave also but only if the requirement is reasonable.
    The cashing out provisions have been extended from the Australian Fair Pay & Conditions Standard. For award employees, paid leave cannot be cashed out except in accordance with a permitted cashing out term in an award or enterprise agreement. An award free employee and his or her employer may agree to cash out the leave providing the employee's remaining accrued entitlement is not less than 4 weeks. Such an agreement must be a separate agreement in writing.
  5. Personal/carer's leave and compassionate leave
    The entitlement to personal/carer's leave under the NES generally reflects those entitlements that currently exist under the Australian Fair Pay & Conditions Standard.
    Permanent employees will be entitled to 10 days of paid personal/carer's leave for each year of service. The entitlement accrues progressively during the year according to the employee's ordinary hours of work and accumulates from year to year.
    The leave may be taken:
    1. because the employee is not fit for work because of a personal illness, or personal injury, affecting the employee, or
    2. 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:
    1. a personal illness, or personal injury affecting the member; or
    2. an unexpected emergency affecting the member.

    All employees, including casuals, who have no entitlement to take carer's leave, may take unpaid carer's leave for each permissible occasion.
    The entitlement to 2 days paid compassionate leave (except for casuals) is also maintained for each occasion when a member of the employee's immediate family, or a member of the employee's household:

    1. contracts or develops a personal illness or sustains a personal injury that poses a serious threat to his or her life; or
    2. dies.

    An employer may require an employee taking leave to provide evidence that would satisfy a reasonable person that the leave was necessary.

  6. Community service
    This obligation again may be new to some employers as it is not part of the Australian Fair Pay & Conditions Standard. To other employees it may be similar to or, the same, as industrial instrument provisions which currently bind them.
    An employee who engages in an eligible community service activity is entitled to be absent from work for the time when the employee is engaged in the activity and for reasonable travelling and rest time. The absence must be reasonable in the circumstances. An eligible activity includes a voluntary emergency management activity with a recognised organisation (such as a fire-fighting, civil defence or rescue body).
    An employee wanting absence from work to undertake an eligible community service must provide notice to his or her employer that would satisfy a reasonable person that the absence relates to the community service proposed to be taken.
    An employee is also entitled to be absent from work to attend to jury service. This absence is paid for the first 10 days (except for casuals).
  7. Long service leave
    The NES preserves the entitlement of employees to long service leave in accordance with prevailing State legislation or applicable awards.
  8. Public holidays
    An employee will be entitled to be absent from work and be paid on a day or part-day that is a public holiday in the place where the employee is based for work purposes. A public holiday remains those days commonly declared as such around Australia including any other day declared by a State government to be a public holiday.
    However, an employer may request an employee to work on a public holiday if the request is reasonable. The employee may refuse such request if the request is not reasonable or the refusal is reasonable. The NES lists circumstances that must be taken into account in determining whether a request, or a refusal of a request, to work on a public holiday is reasonable.
  9. Notice of termination and redundancy pay

    Notice of termination
    The proposed NES provides for the same minimum notice periods to be afforded to employees as the Workplace Relations Act currently provides for on the termination of their employment. The NES confirms the requirement for the notice of termination of employment to be in writing.
    Significantly, the NES will introduce for the first time a statutory entitlement to redundancy pay for permanent employees whose employer employs 15 or more employees (including certain casual employees). The entitlement to redundancy pay reflects the AIRC standard, which is the following scale of between 4 and 16 weeks depending upon the employee's period of continuous service with the employer:

    Redundancy pay period
      Employee's period of continuous service with the employer on termination Redundancy pay period
    1 At least 1 year but less than 2 years 4 weeks
    2 At least 2 years but less than 3 years 6 weeks
    3 At least 3 years but less than 4 years 7 weeks
    4 At least 4 years but less than 5 years 8 weeks
    5 At least 5 years but less than 6 years 10 weeks
    6 At least 6 years but less than 7 years 11 weeks
    7 At least 7 years but less than 8 years 13 weeks
    8 At least 8 years but less than 9 years 14 weeks
    9 At least 9 years but less than 10 years 16 weeks
    10 At least 10 years 12 weeks

    There are the usual exclusions such as casuals, employees employed for a specific period of time or for a specific task and qualifying period employees (the Bill refers to a "continuous period of service" rather than qualifying period and this will be 6 or 12 months depending on the size of the employer). The NES will also not apply where there is a transmission of business and the employee accepts employment with the new employer, or rejects an offer with the new employer which would recognise their service with the old employer on terms and conditions substantially similar to, and no less favourable, than those applying with the old employer.
  10. Fair Work Information Statement
    The NES requires the proposed new industrial umpire – Fair Work Australia – to publish a statement called the Fair Work Information Statement which must be given to all new employees before, or as soon as practicable after, the employee starts employment.
    The Statement is required to contain information about the following:
    1. the National Employment Standards;
    2. modern awards;
    3. agreement making;
    4. the right to freedom of association; and
    5. the role of Fair Work Australia and the Fair Work Ombudsman.

    Minimum wages

    Minimum wages will now be set by the Minimum Wage Panel of Fair Work Australia.
    For award employees, the minimum wages will be contained in the modern awards. For award free employees, the minimum wages will be specified in the national minimum wage order.
    Fair Work Australia will be required to establish and maintain a safety net of fair minimum wages taking into account certain social and economic factors. Wage reviews will be undertaken annually and will also set the casual loading for award free employees.

Kathryn Dent t (02) 9931 4715 e
Mark Sant t (02) 9931 4744 e
Steven Troeth t (03) 9612 8421 e
Dan Feldman t (03) 9252 2510 e
Ian Dixon t (03) 9252 2553 e
John-Anthony Hodgens t (07) 3231 1568 e
Nicholas Linke t (08) 8233 0628 e

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.