National Employment Standards For Business Owners

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All employees have rights, and as a business owner, understanding and complying with employment laws is crucial for protecting those rights. Ensuring that your business’s policies are in line with these laws is not only a legal requirement but also essential for maintaining a positive reputation and avoiding costly disputes.

One of the key frameworks in Australian employment law is the National Employment Standards (NES). The NES sets out the minimum conditions that must be met for employees under the national workplace relations system. It governs crucial areas such as maximum work hours, types of leave, and other important entitlements.

As an employer, staying aware of and compliant with these regulations is one of your most important responsibilities. Failure to do so can result in legal action, harm your business’s reputation, and increase employee turnover — all of which are damaging to your business.

We’ve written more about the NES here: What Are The National Employment Standards (NES) or keep reading to learn more.

Key Entitlements Under The National Employment Standards

Under the NES, there are 11 key entitlements:

Maximum weekly hours: 38 hours per week
Flexible working arrangements
Parental leave (up to 12 months unpaid)
Annual leave (4 weeks paid, 5 weeks for shift workers)
Personal/carer’s leave and compassionate leave
Community service leave
Long service leave
Public holidays
Notice of termination and redundancy pay
Fair Work Information Statement
Casual conversion to permanent employment

Non-compliance with NES standards is a significant risk to your small business. Failure to meet these obligations can expose your business to legal liabilities, create a negative workplace environment, and lead to potential legal troubles. On the other hand, complying with the NES can foster a healthy, productive workplace and protect your business from unnecessary issues. Being proactive about meeting these obligations from the start is crucial.

Let’s take a closer look at each of your obligations under the NES:

Maximum Weekly Hours

You can’t make your employees work 24/7. Unlike machines, employees need rest, breaks, and time to live their lives outside of work. The maximum 38-hour workweek is designed to ensure employees aren’t being asked to work excessive or unreasonable hours.

Providing reasonable work hours isn’t just about setting limits; it also involves ensuring manageable workloads, allowing employees ample time for rest, and promoting a healthy work-life balance.

If an employee opts to work additional hours beyond the standard 38 hours per week, these hours must be reasonable. Additionally, they should receive appropriate compensation, such as overtime pay (e.g. time and a half).

Flexible Working Arrangements

An employee has the right to request a change to their work hours, patterns or location if they meet the eligibility criteria for flexible work arrangements.

Who is eligible to make a request for flexible work arrangements?

Parents or guardians of a child who is school-aged or younger
Carers (as defined by the Carer Recognition Act 2010)
Employees with a disability
Employees who are 55 years or older
Employees experiencing family or domestic violence
Employees providing care or support to a member of their household or immediate family experiencing family or domestic violence

Employees are required to make their request for flexible working arrangements in writing. As the employer, you have 21 days to respond. While you are not legally obligated to approve the request, you can refuse it if you have reasonable business grounds, such as costs, impracticality, or a significant disruption to your operations.

However, to maintain a positive relationship with your employees and foster a supportive work environment, it’s a good idea to have a constructive discussion about your employees options rather than simply saying no. Working towards a solution that benefits both parties can help build trust and goodwill.

Parental Leave And Related Entitlements

When employees welcome a new child, either through birth or adoption, they are entitled to 12 months of unpaid parental leave. Parental leave is available to full-time, part-time, and casual employees who have been with their company for at least 12 months.

It’s important to clearly communicate your employees’ rights regarding parental leave, including any expectations or additional workplace-specific information. Establishing strong systems, processes, and legal documents — such as a Workplace Policy — can help ensure clarity and compliance.

Remember, the 12 months of unpaid parental leave under the National Employment Standards (NES) is separate from any paid parental leave entitlements they may receive, such as government-funded paid parental leave.

If you want to learn more about parental leave under Australian employment laws, you can read about it here: How Paid Parental Leave Functions.

Annual Leave

Full-time and part-time employees are entitled to paid annual leave, which accrues based on the hours an employee works. As an employer, it’s important to ensure your employees are receiving their correct leave entitlements. You will also need to manage leave requests fairly and reasonably. Implementing a clear system and strong workplace policies can help ensure that leave is handled consistently and all parties are on the same page.

Personal/Carer’s Leave And Compassionate Leave

Aside from annual leave, there are several other types of leave employees are entitled to. Personal/carer’s leave is for employees who need to provide care for someone or take time off for personal reasons. This type of leave can be both paid and unpaid, depending on the circumstances.

Compassionate leave is available when an employee is going through a difficult time, such as the death of a loved one. This leave allows them to take time for themselves before returning to work.

As an employer, providing employees with their correct leave entitlements is essential and can make a difficult period a little easier for them. You may also want to explore mental health guidance and wellness options to offer your employees additional support during challenging times.

Family And Domestic Violence Leave

The Fair Work Act entitles employees experiencing domestic violence to 10 days of paid family and domestic violence leave each year. This leave is designed to allow employees to access legal services, relocate, seek medical attention, and take other necessary steps to ensure their safety during a difficult situation.

It’s important to carefully check the entitlements for family and domestic violence leave, as there may be specific requirements or exceptions. Additionally, as an employer, it’s crucial to handle these situations with care and sensitivity. Beyond complying with the NES, you should also consider maintaining confidentiality and offering additional support to your employees.

Community Service Leave

The National Employment Standards (NES) also cover Community Service Leave. If an employee needs to take leave for emergency management services, such as volunteering with the State Emergency Service (SES) or the Country Fire Authority (CFA), they are entitled to do so under the NES.

Additionally, employees who are called for jury duty are entitled to paid leave for the first 10 days. This payment is reduced by the amount of jury duty pay they receive, rather than in addition to it.

It’s a good idea to have a system in place for handling these situations in advance, rather than scrambling at the last minute (we’ve seen this happen). The Fair Work Ombudsman provides more information on community service leave — you can find it here.

Long Service Leave

Employees who have been with your business for a certain period may be entitled to long service leave. The NES recognises the right to long service leave for some employees; however, the specific details of long service leave entitlements are generally governed by state or territory regulations, employee awards, and employment agreements.

As a result, determining whether an employee is eligible for long service leave, how much leave they have accrued, and how payments are calculated can be complex. It’s important to consult with an employment law expert to ensure you’re meeting your obligations and providing the correct entitlements to employees who have been with your business for an extended period.

Public Holidays

Public holidays mean a day off for everyone, including your employees. As an employer, you cannot force your employees to work on a public holiday, as this is a protected right under the NES. Therefore, your business should be well-prepared to manage any potential slowdown or shutdown during public holidays.

However, some employees may choose to work on a public holiday. In such cases, your workplace policies should address how to handle this scenario. If an employee agrees to work on a public holiday, you must compensate them accordingly. There are national standards businesses must follow when it comes to public holidays, including providing employees with penalty rates.

Penalty rates refer to higher pay rates that employees are entitled to for working outside normal hours or on public holidays. The exact rates for working on a public holiday are usually determined by enterprise agreements, modern awards or employment contracts — it’s important to be well informed on your obligations when it comes to public holidays.

Notice Of Termination And Redundancy Pay

The NES not only covers your employees’ rights while they work for you, but they also set standards for when you are required to terminate an employee or make them redundant. This includes ensuring employees receive adequate notice of termination, verifying if they are entitled to redundancy pay, and correctly calculating that pay.

The general rules are as follows:

Notice Period: this is based on the employee’s length of service (1– 4 weeks, with an additional week for employees over 45 years of age who have at least 2 years of service)
Redundancy Pay: If an employee has been with your business for 12 months or more of continuous service, then you will owe them redundancy pay. An exception applies to small businesses (fewer than 15 employees) and casual employees
Calculation: To calculate redundancy pay, multiply the employee’s ordinary weekly pay by the number of weeks’ redundancy entitlement based on their tenure (typically between 4 to 16 weeks)

Fair Work Information Statement

It’s not enough to simply uphold your employees’ rights under the NES — as an employer, it’s also your duty to ensure they are fully aware of their rights and obligations under the law. That’s where the Fair Work Information Statement comes in. This document must be provided to employees when they first start working at your business. It contains important information about the Fair Work Act, the 11 NES entitlements, enterprise agreements, modern awards, and more.

The information statement is required to cover:

The 11 minimum employee entitlements under the NES
Modern Awards
Information on enterprise agreements and individual flexibility agreements
The right to request flexible working arrangements
Notice requirements and redundancy pay
The right to freedom of association
Workplace rights and responsibilities for both employees and employers
General protections against discrimination and unfair treatment
The process for making a complaint to the Fair Work Ombudsman
The role of the Fair Work Ombudsman and how it can support your employees

As an employer, it’s crucial to have a well-drafted Fair Work Information Statement ready to give to new employees. Since this is a key document, it’s a good idea to seek expert legal advice to ensure it complies with all legal requirements and covers everything your employees need to know.

Who Does The NES Apply To?

The NES applies to most Australian employees, but there are some exceptions. Additionally, the extent to which the NES applies, as well as any additional considerations, will depend on the employee’s individual circumstances. As an employer, it’s important to take multiple factors into account when assessing your legal obligations under the NES.

As a general rule, the NES typically applies to:

Full-time employees: Permanent, full-time employees are covered by all NES entitlements
Part-time employees: A part-time employees entitlements under the NES are often in relation to how many hours they have worked i.e annual leave calculations
Casual employees: Casual employees don’t have full protection under the NES however, they do have the right to certain types of unpaid leave and the right to convert to permanent employment under casual conversion provisions after 12 months of regular work
National system employees: Employees that work in the private sector and for corporations and covered by the NES as they fall under the national workplace relations system

So, who isn’t covered by the NES?

State government employees who are covered by state-based employment laws.
Independent contractors, who are generally not considered employees and thus are not covered by the NES.
Unpaid volunteers, as they do not have employee status and are not entitled to the NES protections.

How The National Employment Standards Affect Hiring Decisions

When hiring people to work in your business, the NES will play a crucial role in your hiring decisions. It will determine how you structure your employment contracts as well as how you manage their rights in accordance with the NES.

Creating Employment Contracts Aligned With NES

It’s always best to be well-prepared. Understanding your employees’ rights and ensuring their employment contracts reflect these rights is an important first step in maintaining a legally compliant workplace. It’s also helpful to consult with a legal expert about your obligations and have contracts drafted by a legal professional — this will ensure you’re on the right track.

How To Ensure Compliance With NES

Compliance with the NES is crucial, but businesses don’t always get it right. There are numerous rules and regulations that need to be followed, and things can often get overlooked. Additionally, systems and processes may change, but they aren’t always updated to remain legally compliant.

We’ve listed a few ways you can avoid common mistakes that businesses tend to make and ensure compliance with the NES.

Conduct A Compliance Audit

It is important to constantly audit your own business to make sure it’s being compliant. An audit will show you which areas of the business need stronger compliance measures – we usually find there’s always room for improvement. Be strict and make sure this is a consistent practice.

Review Employment Contracts And Policies

Once you have your contracts drafted, it’s important to consistently review them. Regulations, workplace circumstances, and your employees’ needs may change. As such, it’s best to regularly review, reflect, and update employment contracts, ensuring they remain legally sound and meet both business and employee requirements

Educate Management And HR Teams

Your management and HR teams should be well-versed in compliance requirements. Offering regular training and updates on relevant regulations will help them identify potential risks and address issues proactively. A knowledgeable team is key to enforcing compliance and maintaining a compliant workplace.

Implement Regular Internal Reviews

In addition to compliance audits, it’s important to have regular internal reviews. These reviews should cover operational procedures, employee performance, and adherence to workplace policies. Internal reviews provide an opportunity to address any non-compliance issues before they escalate.

Keep Employees Informed Of Their Rights

Maintaining transparency with your employees about their rights under current laws is crucial. Providing resources, holding workshops, or sending out periodic updates on employee rights fosters a culture of compliance and trust, ensuring that both the employer and employees are on the same page. Legal documents such as Staff Handbooks and Workplace Policies can help employees better understand their rights as well as their options when an incident occurs.

Stay Updated On Legislative Changes

Employment laws and regulations change pretty quickly, making it essential to stay updated. Stay in the loop with relevant legal updates or industry newsletters, and ensure your business is aware of any legislative changes that may impact your contracts, policies, or overall compliance.

Seek Legal Assistance For Complex Issues

For more complex compliance matters, seeking legal assistance is highly recommended. Employment laws can be nuanced and vary across jurisdictions. A legal professional can guide you through more intricate compliance issues and ensure that your business stays protected.

Sprintlaw Can Help You Comply With Employment Laws

Navigating employment laws can be complex – not to worry though, we’re here to help. Sprintlaw’s team of expert lawyers can assist with reviewing your employment contracts and ensuring your policies are up-to-date with the latest legislative changes. Our legal experts can provide practical and tailored solutions to ensure your business remains compliant. Reach out to us today for expert guidance and peace of mind.

Safeguard Your Business Through Employment Compliance

Maintaining compliance with employment laws is crucial for protecting your business from legal risks. Seeking expert legal advice can provide the support you need to stay compliant and safeguard your business.

Stay compliant with Australia’s employment standards and avoid legal risks. Learn more about our Employment Law services to protect your business today. If you would like a consultation on National Employment Standards (NES) for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.

Sapna Goundan

Sapna has completed a Bachelor of Arts/Laws. Since graduating, she's worked primarily in the field of legal research and writing, and she now writes for Sprintlaw.

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