Fair Work Commission

Introduction

Awards cover a whole industry or occupation and, together with the National Employment Standards (NES), provide a safety net of minimum pay rates and employment conditions. Enterprise agreements can be tailored to meet the needs of particular businesses.

Enterprise agreements are agreements made at an enterprise level between an employer and its employees about the terms and conditions of their employment.

There are a number of terms that may be included in an enterprise agreement. These include terms relating to:

• ordinary hours
• rates of pay
• penalty rates and overtime
• allowances
• deductions authorised by an employee, and
• the operation of the agreement.

Better off overall

Before approving an enterprise agreement, the Fair Work Commission must be satisfied that each award covered employee and prospective award covered employee will be better off overall under the proposed enterprise agreement than if the relevant modern award applied.

Parties must ensure that the terms and conditions included in the proposed enterprise agreement satisfy the 'better off overall' test for each award covered employee and prospective award covered employee.

The National Employment Standards (NES)

See Fair Work Act Part 2–2

The National Employment Standards (NES) are minimum standards that apply to all employees employed by a national system employer. However, only certain entitlements apply to casual employees.

It is not necessary for an enterprise agreement to expressly include each NES entitlement. Terms that are included in an enterprise agreement cannot be less beneficial than those provided in the NES. An enterprise agreement can provide more favourable entitlements than those provided in the NES.

Entitlements under the NES

The minimum standards under the NES relate to:

• maximum weekly hours
• requests for flexible working arrangements
• parental leave and related entitlements
• annual leave
• personal/carer's leave, compassionate leave and unpaid family and domestic violence leave
• community service leave
• long service leave (under state or territory laws or as a preserved award-derived or agreement-derived entitlement)
• public holidays
• notice of termination and redundancy pay, and
• provision of a Fair Work Information Statement.

Further information in relation to NES entitlements is available from the NES page on the Fair Work Ombudsman's website.