Fair Work Act 2009

A modern award or enterprise agreement must not exclude the National Employment Standards or any provision of the National Employment Standards.

A modern award or enterprise agreement may include any terms that the award or agreement is expressly permitted to include:

by a provision of Part 2‑2 (which deals with the National Employment Standards); or

by regulations made for the purposes of section 127.

In determining what is permitted to be included in a modern award or enterprise agreement by a provision referred to in paragraph (a), any regulations made for the purpose of section 127 that expressly prohibit certain terms must be taken into account.

The National Employment Standards have effect subject to terms included in a modern award or enterprise agreement as referred to in subsection (2).

See also the note to section 63 (which deals with the effect of averaging arrangements).

A modern award or enterprise agreement may also include the following kinds of terms:

terms that are ancillary or incidental to the operation of an entitlement of an employee under the National Employment Standards;

terms that supplement the National Employment Standards;

Ancillary or incidental terms permitted by paragraph (a) include (for example) terms:

under which, instead of taking paid annual leave at the rate of pay required by section 90, an employee may take twice as much leave at half that rate of pay; or

that specify when payment under section 90 for paid annual leave must be made.

Supplementary terms permitted by paragraph (b) include (for example) terms:

that increase the amount of paid annual leave to which an employee is entitled beyond the number of weeks that applies under section 87; or

that provide for an employee to be paid for taking a period of paid annual leave or paid/personal carer’s leave at a rate of pay that is higher than the employee’s base rate of pay (which is the rate required by sections 90 and 99).

Terms that would not be permitted by paragraph (a) or (b) include (for example) terms requiring an employee to give more notice of the taking of unpaid parental leave than is required by section 74.

An enterprise agreement may include terms that have the same (or substantially the same) effect as provisions of the National Employment Standards, whether or not ancillary or supplementary terms are included as referred to in subsection (4).

To avoid doubt, if a modern award includes terms permitted by subsection (4), or an enterprise agreement includes terms permitted by subsection (4) or (5), then, to the extent that the terms give an employee an entitlement (the award or agreement entitlement) that is the same as an entitlement (the NES entitlement) of the employee under the National Employment Standards:

those terms operate in parallel with the employee’s NES entitlement, but not so as to give the employee a double benefit; and

the provisions of the National Employment Standards relating to the NES entitlement apply, as a minimum standard, to the award or agreement entitlement.

For example, if the award or agreement entitlement is to 6 weeks of paid annual leave per year, the provisions of the National Employment Standards relating to the accrual and taking of paid annual leave will apply, as a minimum standard, to 4 weeks of that leave.

To the extent that a term of a modern award or enterprise agreement is permitted by subsection (4) or (5), the term does not contravene subsection (1).

A term of a modern award has no effect to the extent that it contravenes this section (see section 56). An enterprise agreement that includes a term that contravenes this section must not be approved (see section 186) and a term of an enterprise agreement has no effect to the extent that it contravenes this section (see section 56).