In Part 1 of this series, we covered modern awards: what they are, how to identify which ones apply to your business, and why they matter even if you pay above the minimum. In this article, we turn to the National Employment Standards, which sit alongside modern awards as the other foundational layer of your obligations as an employer.
What are the National Employment Standards?
The National Employment Standards, known as the NES, are the 12 minimum employment entitlements set out in the Fair Work Act 2009 (Cth). They apply to all employees covered by the national workplace relations system, regardless of industry, occupation, or how long someone has worked for you.
The 12 entitlements are:
- Maximum weekly hours of work: 38 hours, plus reasonable additional hours
- Requests for flexible working arrangements: employees who are pregnant, are a parent or have carer responsibilities for a school age child or younger, are a carer, have a disability, are 55 or older, are experiencing family and domestic violence or are caring for an immediate family or household member experiencing family and domestic violence may request flexible working arrangements.
- Parental leave: 12 months unpaid for eligible employees, with the possibility to extend an additional 12 months
- Annual leave: 4 weeks per year for full-time employees, plus an additional week for some shiftworkers. Pro rata for part time employees.
- Personal/carer’s leave: 10 days per year for full-time employees and pro rata for part time employees and compassionate leave (2 days per occasion)
- Paid family and domestic violence leave: 10 days per year
- Community service leave
- Long service leave: generally as per state based legislation.
- Public holidays
- Notice of termination and redundancy pay
- Superannuation
- The Fair Work Information Statement (and the Casual Employment Information Statement for casual employees)
Who do they apply to?
The NES applies to all employees in the national workplace relations system. That covers the vast majority of private sector employers and employees in Australia. It does not matter whether you have one employee or one hundred, whether they are covered by a modern award or not, or what their employment contract says. The NES applies.
Casual employees receive some, but not all, NES entitlements. They do not accrue annual leave or paid personal/carer’s leave, for example, but they are entitled to paid family and domestic violence leave, unpaid carer’s leave, and community service leave. Eligible casuals who have been employed on a regular and systematic basis for at least 12 months, and who have a reasonable expectation of ongoing employment, can also access flexible working arrangements and unpaid parental leave.
What are my obligations as an employer?
Your core obligation is straightforward: you must not provide an employee with conditions that are less than the NES. This applies regardless of what your employment contract says, what a modern award says, or what you and the employee might have agreed to. Any term in a contract or agreement that purports to exclude or undercut an NES entitlement has no legal effect.
Beyond meeting the minimums, you are also required to give every new employee a copy of the Fair Work Information Statement before or as soon as practicable after they start work. If you hire a new casual employee, you must also provide them with the Casual Employment Information Statement at the same time. These documents are available for free from the Fair Work Ombudsman at fairwork.gov.au.
Can I provide more generous conditions than the NES?
Yes, and many employers do. The NES sets the floor, not the ceiling. You can provide more generous entitlements in an employment contract, a modern award, or an enterprise agreement, and those more generous conditions will apply.
A common example is annual leave. The NES entitles most full-time employees to four weeks of annual leave per year. Some employers offer five weeks, particularly for senior roles or as part of a competitive employment package. That is entirely lawful, and the NES provisions about how leave is managed (including requirements around direction to take leave and excessive balances) apply to the additional leave as well.
What if I want to include a longer notice period in the contract of employment?
You can, and in many cases it is a sound approach. The NES sets minimum notice periods for termination by the employer, based on the employee’s length of continuous service:
- Less than 1 year: 1 week
- 1 year and up to 3 years: 2 weeks
- 3 years and up to 5 years: 3 weeks
- More than 5 years: 4 weeks
An additional week is required if the employee is over 45 years of age and has completed at least two years of continuous service.
These are the minimums. An employment contract or modern award can provide for a longer notice period, and that longer period then applies. This is common for senior, specialist, or client-facing roles where handover time is genuinely important to the business.
One practical point worth noting: if you have a longer notice period in the contract of employment and you terminate the employee (for any reason other than serious misconduct) the longer notice period will apply contractually.
There is also a broader consideration here. Where an employee has no written employment contract, or the contract does not deal with notice clearly, courts have implied a term of “reasonable notice” that regularly exceeds the NES minimums. For long-serving or senior employees, that implied period can be several months. A clearly drafted contract that addresses notice directly gives both parties certainty and protects the business.
Can a modern award override the NES?
No. A modern award cannot exclude the NES or provide for conditions that are less beneficial to employees than the NES. This is set out in section 55 of the Fair Work Act 2009 (Cth). Any term in a modern award that attempts to do so has no legal effect.
A modern award can, however, build on the NES by providing more generous entitlements or by supplementing the NES with additional provisions. For example, some awards specify longer notice periods than the NES minimums, or set out specific processes for consultation around redundancy that go beyond the NES requirements. Where an award is more generous, the award provision applies.
The same principle applies to enterprise agreements. They can supplement or improve on the NES but cannot take entitlements away.
Do the NES apply to employees who earn above the high income threshold?
This is a common point of confusion. High income employees, currently those earning above the high income threshold (which is reviewed annually by the Fair Work Commission) may be exempt from the financial provisions of a modern award if they have a written guarantee of annual earnings at or above the threshold. However, the NES still applies to them in full. The high income threshold exemption relates to modern award coverage only, not to the NES.
What happens if I don’t meet my NES obligations?
Failing to comply with the NES is a breach of the Fair Work Act. The Fair Work Ombudsman (FWO) has the power to investigate, issue compliance notices, and pursue civil penalty proceedings. Penalties for contraventions can be significant, and in cases of serious or deliberate non-compliance, the FWO has shown a willingness to litigate.
The more immediate reality for most small to medium businesses is the risk of an underpayment claim, an unfair dismissal application, or a general protections complaint that becomes complicated by underlying NES non-compliance. The cost of getting it wrong far exceeds the cost of getting it right.
Need help?
If you would like a review of your employment contracts or overall compliance with the NES and applicable modern awards, reach out to the team at The HR Impact. We work directly with business owners to make sure the fundamentals are in place.