An employment contract may be affected by the statutory safety net, comprising the National Employment Standards, the minimum wage, modern awards and enterprise agreements.
The existence of an employment contract is an important condition for the operation of rights and entitlements under industrial legislation and the industrial instruments operating under that legislation. These statutory rights and entitlements provide a ‘safety net’ for employees. Terms and conditions in an employment contract cannot undercut these statutory conditions.
Under the Fair Work Act (FW Act), the universal statutory safety net is provided by the 10 National Employment Standards (NES). The NES provides minimum conditions in respect of working hours, requesting flexible working arrangements, paid and unpaid leave, notice of termination, redundancy pay and the provision of a statement to employees about industrial rights and entitlements (the Fair Work Information Statement).
The NES is supplemented by the National Minimum Wages, which stipulate minimum base rates of pay for adult and junior employees, trainees and workers with disability. These only apply to award or agreement free employees.
For over 60% of the employers and employees subject to the FW Act, the safety net is also supplemented by a modern award or an enterprise agreement.