Conditions of employment

Quick links
The National Employment Standards
The NES and workplace agreements
Hours of work and overtime
Leave
Individual flexibility arrangements (IFAs)
Superannuation
Union right of entry
Foreign workers and VISA requirements
Independent contractors and labour hire companies

The National Employment Standards

From 1 January 2010 the National Employment Standards (NES) apply to all federal employers in Australia.

The NES forms a part of the minimum safety net that cannot be altered to disadvantage employees.

The NES covers the following areas:

• Maximum weekly hours of work 
• Requests for flexible working arrangements
• Parental leave and related entitlements
• Annual leave
• Personal / carers leave and compassionate leave
• Community service leave
• Long service leave
• Public holidays
• Notice of termination and redundancy pay
• Provision of a Fair Work Information Statement.

Not all entitlements of the NES apply to casual employees. The areas which do apply include:

• Two days unpaid carer’s leave and two days unpaid compassionate leave per occasion
• Maximum weekly hours (38)
• Community service leave (except paid jury service)
• To have a day off on a public holiday, unless reasonably requested to work by the employer
• Provision of the Fair Work Information Statement.

• Requests for flexible working arrangements
• Unpaid parental leave 

The NES and workplace agreements

The NES operate alongside workplace agreements. However, where a provision in a workplace agreement provides a lesser entitlement in comparison with the NES, the NES entitlement will apply. 

An example of where this will occur is where a workplace agreement provides for eight days sick/personal leave. Under the NES, an eligible employee must receive not less than 10 sick/personal leave days per year.

Hours of work and overtime

Horticulture Award 2010 hours of work

Full-time and part-time employees 

• 152 ordinary hours over a four week period.
• Ordinary hours of work:
• Monday to Friday span or Monday to Saturday by majority employee agreement*
• 6.00 am to 6.00 pm, unless by majority employee agreement*
• Maximum of 8 hours per day or up to 12 hours by majority employee agreement*
• Hours worked in excess of ordinary hours are deemed overtime
• Overtime hours are taken as TOIL (time off in lieu) unless the employee elects to be paid – employee must be notified of options at time overtime offered
• Employee can refuse if “unreasonable”
• Saturday penalty rate 150% (payable for ordinary hours)
• Sunday and Public Holiday penalty rate 200% (payable for ordinary hours)

*can be a defined section – e.g. packing house

Shiftwork employees

• 152 ordinary hours over four weeks.
• Cannot exceed eight hours per shift without payment of overtime.
• Afternoon shift finishes between 6.00 pm and midnight
• Night shift finishes between midnight and 8.00 am.
• 15% loading payable on relevant classification level
• 5 weeks annual leave accrued per annum.

Casual employees

• The lesser of an average of 38 hours per week or the hours directed by the employer.
• Casuals can be offered ‘reasonable additional hours’, but are not obliged to accept if hours are ‘unreasonable’.
• Overtime rates not payable – ‘reasonable additional hours’ paid at ordinary rate
• 25% casual loading in lieu of personal/carer’s leave, annual leave, leave loading, notice periods, redundancy and other entitlements of fulltime/part-time employees under the Award.

Hours of work and the National Employment Standards (NES)

What are reasonable additional hours?
An employer may request an employee to work reasonable additional hours, beyond 38 hours per week, taking into consideration:

• Any risk to the employee’s health and safety from working the additional hours
• The employee’s personal circumstances, including family responsibilities
• The needs of the workplace or enterprise in which the employee is employed
• Whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a salary/wage that reflects an expectation of, working additional hours
• The notice (if any) given by the employer of any request or requirement to work the additional hours
• the notice (if any) given by the employee of his or her intention to refuse to work the additional hours
• the usual patterns of work in the industry, or the part of an industry, in which the employee works
• the nature of the employee’s role, and the employee’s level of responsibility
• whether the additional hours are in accordance with averaging provisions included a modern award or workplace agreement
• any other relevant matter. 

Leave

Under construction 

Individual flexibility arrangements (IFAs)

Flexible work practices can deliver benefits to both employers and employees. They can lead to greater job satisfaction and help attract and retain skilled and valuable staff. Flexibility in the workplace may also improve productivity and efficiency by helping maintain a motivated workforce with reduced staff turnover and absenteeism.

The Fair Work Act 2009 provides for workplace flexibility through the use of individual flexibility arrangements (IFAs). IFAs allow for variations to modern awards or workplace agreements in order to meet the genuine needs of employers and individual employees while ensuring minimum entitlements and protections are not undermined.

Note 1: BOOT (Better Off Overall Test)

The IFA must result in the employee being better-off overall than the employee would be if no arrangement was made. It is the employer’s responsibility to ensure that the employee is better off overall than if there was no IFA. The employer’s ‘better off overall’ assessment will usually involve comparing the employee’s financial benefits under the IFA with the financial benefits under the applicable award or workplace agreement. However, the employee’s personal circumstances and any nonfinancial benefits which are significant to the employee can also be considered. What can be included in an IFA depends upon whether it is being made to vary a modern award or a workplace agreement.

Note 2: Who is eligible?

An IFA can only be made after the relevant employee has commenced employment and is entitled to the minimum award conditions prescribed by the relevant modern award. This means an employer cannot ask a prospective employee to agree to an IFA as a condition of employment.

Modern Award flexibility terms

The flexibility term of the Horticulture Award 2010 will only allow IFAs to vary:

• arrangements about when work is performed
• overtime rates
• penalty rates
• allowances
• leave loading.

Award entitlements relating to any of these five award matters may be varied by agreement between an employer and an individual employee provided that, overall, the employee is ‘better off’ under the IFA.

Note 3: Examples

• Changes/reduction in hours of work or start and finish times
• Changes in patterns of work – eg ‘split’ shifts, job-sharing arrangements
• Changes in location of work.

Workplace Agreements flexibility terms

An IFA made under a workplace agreement can only vary those terms of the enterprise (workplace) agreement that are set out in the flexibility clause in the workplace agreement. The better off overall test also applies in these circumstances.

Prohibited terms

IFAs cannot include unlawful terms e.g. discriminatory terms, terms which contravene the general protections, those relating to unfair dismissal or right of entry entitlements, terms relating to OHS and other inconsistent with the industrial action provisions of the Act.

The IFA must:

• be in writing
• include the name of the employer and employee
• be signed by the employer and employee (or guardian if the employee is under 18 yrs) and a copy provided to the employee
• state the day on which the arrangement commences and must include the details of:
• the terms of the modern award that will be varie by the arrangement
• how the arrangement will vary the effect of the terms
• how the employee will be better off overall in relation to the terms and conditions of his or her employment as a result of the arrangement.

Terminating an IFA

The employer or employee may terminate the IFA by giving no more than 28 day's written notice to the other party, or at any time if the employer and employee agree in writing.

Superannuation

As an employer you have a legal obligation to pay super contributions on behalf of all your eligible employees. These contributions are in addition to your employees’ salaries and wages. This compulsory contribution is called the superannuation guarantee and it requires you to:

• pay super for your eligible employees (including casuals and backpackers)
• contribute to the correct super funds, and
• pay contributions by the cut off date each quarter.

Who is eligible for super contributions?

Generally, your employees are eligible for super if they:

• are between 18 and 69 years of age inclusive, are paid $450 (before tax) or more in a calendar month, and work full-time, part-time or on a casual basis 
• are under 18 years of age , you pay $450 or more (before tax) in a calendar month, and works full-time, part-time or on a casual basis for more than 30 hours in a week.

Temporary residents may also be eligible for super in accordance with the above guidelines. If you require further clarification on superannuation payments to temporary residents, contact the Australian Taxation Office by phoning 13 10 20 or visit their web site www.ato.gov.au

As an employer you have the following obligations with regard to superannuation:

• making super contributions for your eligible employees by the cut off dates each quarter
• making at least the minimum 9% contribution amount of the ordinary times earnings
• paying the superannuation guarantee charge to the Tax Office if you don’t make the required super contributions by the due dates
• passing on your employees’ tax file numbers to their super fund
• paying super contributions for any eligible contractors
• keeping records of your super contribution payments
• The Horticulture Award 2010 lists the relevant super funds.

What are ordinary time earnings?
From 1 July 2008, you must use ordinary time earnings (OTE), as defined in the superannuation guarantee law, to calculate the minimum super guarantee contributions required for your eligible employees. This ensures all eligible employees are treated the same for super guarantee purposes. Ordinary time earnings are generally what your employees earn for their ordinary hours of work, including:

• over-award payments
• bonuses
• commissions
• allowances.

An ‘employee’s ordinary hours of work’ are the hours specified as his or her ordinary hours of work under the relevant Award or agreement, or under the combination of such documents, that governs the employee’s conditions of employment. If the ordinary hours of work are not specified in a relevant award or agreement, the ‘ordinary hours of work’ are the normal, regular, usual or customary hours worked by the employee, as determined by all the circumstances of the case. This is not necessarily the minimum or maximum number of hours worked or required to be worked.

Overtime payments

Payments for work performed during hours outside an employee’s ordinary hours of work are not ordinary time earnings and therefore you are not required to pay superannuation on these payments. However, where overtime amounts cannot be distinctly identified (i.e. you have not kept an accurate record of ordinary hours and overtime hours), all hours actually worked will be included in ordinary hours of work and you will be required to pay superannuation on all hours.

Pieceworkers

The Horticulture Award 2010 excludes pieceworkers from the hours of work and overtime clauses of the award. This means the superannuation contribution of 9% will need to be calculated on the employee’s entire piece-work earnings.

Need to know more?

If you require further clarification on superannuation payments to temporary residents, Growcom suggests contacting the Australian Taxation Office by phoning 13 10 20 or visiting www.ato.gov.au 

Union right of entry

Union right of entry laws have been expanded with the introduction of the Fair Work Act 2009. The Act allows duly appointed officials, holding a current entry permit to enter a workplace:

• for the purposes of discussions with members or potential members, who wish to participate in discussions.
• to investigate a suspected breach of the Act or term of an Award or workplace agreement.
• to investigate a suspected breach of State occupational health and safety legislation (the Workplace Health and Safety Act 1995 (QLD) (“the WHS Act”))

Officials must have a current entry permit. A permit can only be issued to a person who is a ‘fit and proper person’. Discussions with employees may involve discussions around a workplace agreement or breaches to workplace or OHS rules. Any such visit to a workplace must take place during working hours.

For entry to a workplace that does not involve a suspected safety breach under the WHS Act, union officials must give the employer written notice of at least 24 hours before the visit. Penalties may apply for refusing, delaying, or obstructing entry.

The entry notice must provide:

• the name and address of the premises to be entered
• the day and date of entry
• the organisation [union] the permit holder belongs to
• the section of the Fair Work Act 2009 that authorises the entry.

In the case of a suspected breach,

• the details outlining the suspected breach
• a declaration by the permit holder that they represent an employee/s who works on the premises and to whom the suspected breach relates, or who is affected by the suspected breach
• the provision of the organisation’s rules that details the organisations right to represent the employee.

However, Fair Work Australia (FWA) may issue an exemption and give officials the right to investigate suspected breaches of an Award or workplace agreement without giving the employer notice. To get an exemption, the union will need to convince FWA that “advance notice of the entry … might result in the destruction, concealment or alteration of relevant evidence”. This hearing takes place without the employer being present. It remains to be seen how often and in what manner such provisions might be utilised by unions.

On entry to a workplace, permit holders must:

• abide by conditions imposed on their permit
• comply with reasonable occupational health and safety requests
• comply with reasonable requests to hold discussions in a particular room or area
• comply with reasonable requests that certain routes be taken to a room or area act in a proper manner and not intentionally hinder or obstruct others
• not enter any part of the premises used for residential purposes.

A permit holder must not:

• be refused or delayed entry to the premises
• be refused the right to inspect and copy records or documents directly related to a suspected breach
• be hindered or obstructed from exercising their rights
• give the impression that they are authorised to do things they are not, nor be reckless about giving that impression
• use information for any purposes other than the investigation.

While on the premises, a permit holder may:

• inspect any work, process or object directly relevant to the suspected breach
• interview any person about the suspected breach whose interests the permit holder’s organisation is entitled to represent and who agrees to be interviewed
• inspect and copy any record or document that is directly relevant to the suspected breach, that is kept on the premises or is accessible from a computer that is kept on the premises.

Documents that relate to an employee who is not a member of the permit holder's union, and that do not substantially relate to the employment of a person who is a member are not included as documents that may be inspected or copied. A permit holder may apply to FWA to inspect such documents or consent may be given by that employee.

Disputes about right of entry

Disputes regarding right of entry may be arbitrated by FWA or upon application by the permit holder, the permit holder’s organisation, the employer or the occupier of the premises. To resolve disputes, FWA may make orders including:

• imposing conditions on a permit
• suspending a permit
• revoking a permit
• about future issue of entry permits to one or more persons.

Fair Work Australia can deal with a dispute about right of entry, including by arbitration. In dealing with the dispute, Fair Work Australia may make any order it considers appropriate, including by making one or more of the following orders:

• an order to suspend or revoke an entry permit
• an order to impose conditions on entry permits
• an order about the future issue of entry permits to one or more persons.

Foreign workers and visa requirements

Visa Entitlement Verification Online (VEVO)

The Department of Immigration and Citizenship (DIAC) has an online facility which allows employers and labour suppliers to check the work entitlements of prospective employees who were born outside Australia. You will need to register with DIAC to use this service and follow the online instructions. This free service is available 24 hours, seven days a week.

See: Visa Entitlement Verification Online (VEVO) for Organisations

Information you need to perform a search in VEVO

Before undertaking a search in VEVO you will need to request to see the person's foreign passport.

Note: You should check the personal details page of their passport to verify the person's identity.

You will then need to obtain their permission to check their visa details. Using the person's passport, you can enter the following information into the VEVO system:

• name
• date of birth
• passport number
• passport country of issue.

Other ways to check work entitlements

Visa entitlement verification faxback service
Faxback is a toll free fax service that provides written confirmation of an employee's work entitlements within five working days. To use the faxback service, complete the Authority to Obtain Details of Work Rights Status form and fax to the department.

See: FAXBACK form - Authority to Obtain Details of Work Rights Status
Fax: 1800 505 550

Employers Immigration Hotline

Use this number, as an employer, to check the meaning of work condition codes. This service will not give specific information as it relates to a client, it will only be able to provide assistance in understanding work condition codes as they relate to employing a visa holder. This service also assists employers to understand their obligations under the Employer Sanctions Legislation.

Telephone: 1800 040 070. Use this number to check, as an employer, the work rights of potential employees. Hours of operation are Monday to Friday, 8.30 am to 4.30 pm. 

Independent contractors and labour hire companies 

There are a couple of perspectives to contractor laws: 

• being an independent contractor (different to an employee)
• hiring an independent contractor to provide labour, and
• employees working for a contracting company (e.g. a labour-hire arrangement) – the obligations of the contractor and the grower towards these employees – best practice (e.g. visa verification, periodic checking of pay rates with workers to ensure correct rates are being paid).

While the Labour Hire Contractor may be the legal employer of the workforce he/she provides to a horticulture enterprise, the horticulture enterprise still has a number of obligations towards those workers, e.g. the owner of the enterprise carries responsibility for the workplace health and safety of those workers.

The most effective way for a horticulture enterprise to meet these obligations and to reduce the chance of being prosecuted for a breach of law is to have a Labour Hire Agreement with the labour provider that addresses these issues.

When is an independent contractor not a contractor?

There are a number of simple steps to take to help ensure that contractors remain just that. Each of these steps are important in helping create the overall relationship of a contractor:

• ensure that contractors provide their own tools.
• allow the worker to subcontract and set his or her own hours.
• ensure payment is by result, not by salary or hourly rate.
• Where appropriate, allow the worker to contract to other businesses.
• Pay contractors only on receipt of an invoice and never remove PAYG taxation from a contractor’s pay.
• Never include any form of paid leave arrangement in a contractor’s agreement.

Unfair contracts

Most legal disputes involving contractors arise over the individual's actual employment status, so it is important to have documentation in place to clearly show the relationship as one of principal and contractor and not employer and employee.

The Independent Contractors Act commenced in 2007 and allows both individual and incorporated independent contractors (with some exceptions) to bring a claim alleging that a contract is unfair and/or harsh.

In reviewing a contract, the court will consider factors that include;

• the bargaining power of the parties
• whether there was any undue influence, pressure or unfair tactics used against the contractor and
• whether the contract provides for total remuneration that is less than would be earned by an employee performing similar work.

Consultation

To avoid these types of claims and orders, it is important to consult with the contractor before making changes to the contract. We also urge you to speak with a professional when developing a contract with a Labour Hire Company to ensure that your agreement stands the test of time and the courts.

Alternative remedies for Independent Contractors under the Fair Work Act

Businesses should be aware there is scope under the Fair Work Act’s General Protections provisions for independent contractors to make adverse action claims.

In an independent contracting situation, the following may constitute adverse action:

• terminating a contract
• refusing to make use of the contractor's services or goods
• altering the contractor's position or
• altering terms and conditions to the contractor's prejudice "injuring" the contractor.

The industrial relations information provided is accurate to the best of our knowledge at the time of publishing.