Who does this affect?

All employers

What do you need to do?

Consider the implications of the changes for your business. We can help you.

Authors
Andrew Gray  
Partner

Murray Kellock  
Partner

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Andrew Gray  
Partner
T +61 2 9296 2404

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Murray Kellock  
Partner
T +61 3 9643 4172

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Perth
Robert Lilburne  

Canberra
Ian Johnson  

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The Rudd Government has now released the final form of the proposed National Employment Standards (NES). The NES will guarantee minimum terms of employment for all employees covered by the Federal workplace relations system as of 1 January 2010.

The final form NES follows a period of consultation and submissions which the Government commenced on 14 February 2008 (see our previous alert) and is substantially the same as the exposure draft released previously by the Government. The matters dealt with by the NES include:

• maximum weekly hours of work
• requests for flexible working arrangements
• parental leave
• annual leave
• personal/carers leave and compassionate leave
• community service leave
• long service leave
• public holidays
• notice of termination and redundancy pay, and
• an obligation to issue the fair work information statement to employees.

Our previous alert provides details of these proposed entitlements.

While the final form NES did not contain many surprises, the following points are worth noting:

• Relationship with industrial awards and agreements: the NES expressly provides that an award must not exclude any provision of the NES. However, the NES is silent on the relationship between the NES and collective agreements. We assume that the Government will introduce similar provisions in the substantive IR legislation to make it clear that collective agreements cannot exclude or provide less favourable outcomes than the NES
• Same sex couples: the NES amends certain definitions, for the purposes of carer’s leave, to include same sex couples
• Cashing out of leave entitlements: the NES provides that the cashing out of annual leave and personal leave entitlements may be provided for under the terms of an award. However, the NES does not make any provision for the cashing out of these leave entitlements for non award employees (for instance, managerial staff). Employers who previously utilised AWAs to cash out annual leave have experienced this to be a problem since AWAs were abolished by the Rudd Government
• Flexible work arrangements: the draft NES has been amended so that an employee is required to have 12 months service before they have a right to request flexible work arrangements, and
• Redundancy pay: perhaps the most significant implication of the NES is the introduction of a statutory entitlement to redundancy pay. The NES provides that on application by an employer, Fair Work Australia may reduce the amount of redundancy pay where the employer obtains alternative employment for an employee. An automatic exemption from the redundancy pay obligation applies in a “transfer” of business situation where either (i) the new employer recognises the transferring employee’s service with the old employer or (ii) the employee rejects an offer of employment with the new employer which is on no less favourable terms and recognises past service. This provision will need to considered carefully in any business restructures or sale once the new legislation commences on 1 January 2010.

Any one of our workplace and employee relations partners identified above would be pleased to discuss the implications of the NES for your business.