An employee’s minimum entitlements are set out in the National Employment Standards (NES) or awards. A registered agreement or employment contract can provide for other entitlements but they cannot be less than what’s stipulated in the NES or the relevant award.
Awards are legal documents that outline the minimum pay rates and conditions of employment.
There are 122 industry or occupation awards that cover most people who work in Australia.
Assistance with finding the right award that covers your employees can be found at: Award usually provide pay rates for employees in the various occupations in a particular industry covered by that award. There may be many companies in that particular industry that will be covered by that award.
An employer can pay an employee above the wage rate specified in the award, but cannot pay below that rate.
There are many different industrial awards and assistance in finding the right award that covers your employees can be found at Fair Work - Awards
2. Registered Agreements
Enterprise agreements and other registered agreements set out minimum employment conditions and can apply to one business or a group of businesses.
When a workplace has a registered agreement an award does not apply to that workplace. However the following points should be noted:
- The base pay in the registered agreement cannot be less than the applicable base award rate
- The pay and terms and conditions in the agreement cannot be less favourable than those contained in the National Employment Standards.
Registered agreements apply until they are terminated or replaced.
More information about Registered Agreements can be found at: Fair Work - Agreements
3. Employment Contracts
An employment contract is an agreement between an employer and employee that sets out terms and conditions of employment. A contract can be in writing or verbal. It cannot provide for less than the legal minimum entitlements set out in the National Employment Standards, or awards, or enterprise agreements or other registered agreements that may apply.
More information about Employment Contracts can be found at: Fair Work - Employment Contracts
4. National Employment Standards
The National Employment Standards (NES) are 10 minimum employment entitlements that have to be provided to all employees. An award, employment contract or registered agreement cannot contain provisions that are less than the national minimum wage or NES.
More information about the National Employment Standards can be found at: Fair Work - National Employment Standards
5. Independent Contractors
Independent contractors run their own business. They usually negotiate their own fees and working arrangements and can work for more than one client at a time.
Independent contractors have different obligations and rights to employees because they are running their own business.
6. Sham Contracting
Sham contracting is where a person who is working as an employee is regarded to be an independent contractor when he/she is not, even if they are treated as an independent contractor in some ways, such as asked to obtain their own Australian Business Number and to submit invoices.
Sham Contracting is illegal. It is illegal to:
- Claim an employee is an independent contractor.
- Say something false to convince an employee to become an independent contractor.
- Dismiss or threaten to dismiss an employee if he/she doesn’t become an independent contractor.
- Dismiss an employee and then hire him/her as an independent contractor to do the same work they were doing as an employee.
It is therefore important to understand the factors that taken together will determine whether the worker is an employee or an independent contractor, which are outlined at: Fair Work - Independent Contractors