On 1 January 2010 employers will have one New Year's resolution they can't break - to implement the Federal Government's new National Employment Standards (NES) and the new modern award system to their workplace.

What are the NES?
The government officially announced on 16 June 2008 the NES to apply to all Federal system employees from January 2010.

The NES sets minimum standards in relation to hours of work, requests for flexible work arrangements, parental leave, annual leave, personal/carer's leave and compassionate leave, community service leave, public holidays, long service leave, notice of termination and redundancy pay and requires employers to provide employees with a "Fair Work Information Statement".

Modern awards cannot exclude the NES, but may include provisions ancillary or incidental to the NES or provisions to supplement the NES, provided they are not detrimental to an employee.
The NES makes the following key changes to the existing system:

Maximum weekly hours
The NES provide for a 38-hour working week plus reasonable additional hours for full-time employees.
The list of relevant considerations in deciding what is 'reasonable' has been extended to include an employee's level of remuneration, role and responsibilities, the usual pattern of work in the industry and any averaging of hours of work in a modern award.

Requests for flexible working arrangements
The NES allow employees who are parents or carers of a child under school-age to request flexible working arrangements to care for the child after 12 months of employment.
Employers will be required to respond to the request in writing within 21 days and may refuse a request on "reasonable business grounds".

Parental leave
The NES allow each parent to request up to 12 months of unpaid parental leave which may be taken consecutively. Alternatively, one parent may request up to 12 months' additional unpaid parental leave which an employer may refuse only on "reasonable business grounds".

Annual leave, personal/carer's leave and compassionate leave
The NES allow employees on annual leave to be re-credited with their annual leave and take the time off as personal/carer's leave or community service leave in specific circumstances. Employers will no longer have the right to direct employees to take annual leave nor will employees be able to "cash out" annual leave unless permitted by an award. The personal/carer's leave or compassionate leave entitlements remain largely unchanged except that annual limit provisions in relation to paid carer's leave appear to be removed.

Community service leave
The NES allow employees to take leave to attend community service activities including an entitlement of up to 10 days make-up pay for jury duty.

Absence on public holidays
The NES allow employers to request employees to work on public holidays if it is 'reasonable'. An employee may only refuse a request if it is unreasonable or the refusal is reasonable.

Notice of termination and redundancy pay
Compulsory redundancy pay will be introduced for all employees with an exemption for small businesses with less than 15 employees.
Although the minimum notice provisions remain unchanged, a modern award may include provisions specifying how much notice of termination an employee is required to give.

Award modernisation
The Government has directed the AIRC to modernise the award system to create straightforward and easy to use awards which will reduce the regulatory burden on employers. Modern awards will also apply to employees who are currently award free but work in emerging industries or occupations and perform work similar to work which has historically been regulated by awards.

New flexibility clause
The AIRC has released a draft flexibility clause to be inserted in modern awards which allows flexible arrangements to be made between employers and individuals. The flexibility clause is designed to allow employees to trade off some of their award entitlements for such things as overtime rates, leave loading, penalty rates and allowances.
The flexibility agreement must meet the no disadvantage test as at the date it commences to operate. However, it may not be offered as a condition of employment and may be changed by either party.

Employers must be prepared!
To avoid a New Year hangover, employers should carefully audit their workplace relations needs for the next 12-18 months and undertake an assessment of the costs and benefits of acting sooner rather than later in relation to certain workplace issues.

Fay Calderone is an Associate with MatthewsFolbigg Lawyers. For more information call: (02) 9806 7412 or email: fayc@matthewsfolbigg.com.au