U1.04 — National Employment Standards (NES) for Employment Contracts
Overview
Dotpoint 4: National employment standards for employment contracts, including: minimum wage, minimum working conditions, unfair dismissal
The National Employment Standards (NES) are Australia’s 10 minimum legal employment rights under the Fair Work Act that guarantee fair pay, safe working conditions and protection from unfair dismissal. Employment contracts must meet or exceed these standards.
The syllabus highlights three key parts of the NES:
- Minimum wage
- Minimum working conditions
- Unfair dismissal
National Employment Standards (NES)
What are the National Employment Standards?
The National Employment Standards (NES) are the 10 minimum legal employment rights that apply to most employees in Australia. They set the baseline for every employment contract — a business cannot offer conditions below these standards, even if an employee agrees to it.
The NES exist to ensure workers are treated fairly, paid correctly, and protected from unfair treatment at work.
The Fair Work Act
The NES are created under the Fair Work Act 2009, Australia’s main workplace law.
The Act:
- sets minimum pay and conditions
- regulates employment contracts and awards
- protects employees from unfair dismissal
- is enforced by the Fair Work Ombudsman and the Fair Work Commission
Any contract, workplace policy or verbal agreement that tries to go below the NES is not legally valid.
The 10 National Employment Standards
Every eligible employee is entitled to:
- Maximum weekly hours – 38 ordinary hours plus reasonable overtime
- Requests for flexible working arrangements
- Parental leave and related entitlements
- Annual leave – 4 weeks paid (5 for some shift workers)
- Personal/carer’s leave and compassionate leave
- Community service leave – e.g., jury duty
- Long service leave
- Public holidays – right to be absent or paid correctly
- Notice of termination and redundancy pay
- Fair Work Information Statement – employees must be informed of their rights
1) Minimum Wage
What it means
Employees must be paid at least the National Minimum Wage (currently $24.95 per hour or $948 per week for full-time hours).
However, many employees are paid a higher minimum because they are covered by a Modern Award or an enterprise agreement.
Awards and agreements
- Modern Award: a legal pay-and-conditions document for an industry (e.g., hospitality) or a job type (e.g., clerical). It can set higher pay rates, penalty rates and rules about breaks/rosters than the basic minimum.
- Enterprise agreement: a workplace-specific agreement that sets pay and conditions for that business. It must still meet legal minimum standards overall.
- Bottom line: if an award/agreement applies, the employee must get at least those rates — even if the National Minimum Wage is lower.
A business cannot legally pay less, even if the employee agrees or it is “cash in hand.”
WA examples
- A café in Fremantle paying a 20-year-old $17 per hour when the Hospitality Award requires around $24+ would be underpayment.
- A landscaping business in Midland must pay casual workers the casual loading instead of pretending they are contractors.
- A Year 12 student working at a Subiaco retail store must receive the Retail Award junior rate, not an “apprentice style” discount wage.
Why this matters
Correct pay:
- reduces exploitation of young workers
- creates fair competition between businesses
- improves staff retention and motivation
Note
Minimum wage is not a specific NES number. It is set by Modern Awards and Fair Work Commission wage decisions, supported by the Fair Work Act.
2) Minimum Working Conditions
What this covers
“Minimum working conditions” means the contract must include the core legal rights that protect staff day-to-day — especially around hours, breaks, leave, public holidays, and ending employment properly.
In simple terms, under the NES employees are entitled to:
- Reasonable hours of work: full-time is usually 38 hours per week, plus only “reasonable” overtime.
- Breaks: meal/rest breaks are usually set clearly in the relevant award/enterprise agreement (contracts can’t just remove breaks).
- Annual leave: generally 4 weeks paid per year (and 5 weeks for some shift workers).
- Personal/carer’s leave: generally 10 days paid per year for full-time employees (pro-rata for part-time).
- Compassionate leave: typically 2 days per occasion when needed.
- Public holidays: the right to be absent (or paid correctly when working), with conditions depending on the role and award.
- Notice if employment ends: minimum notice periods (and redundancy pay where applicable) must be followed.
These conditions must be included in employment contracts.
WA examples
- A full-time office assistant in West Perth must receive 4 weeks paid annual leave and 10 days personal leave each year.
- A FIFO worker based in WA still has NES rights even if they work interstate.
- A retail worker at Karrinyup must receive proper meal breaks during long shifts — a contract saying “no breaks on busy days” would be illegal.
Common business mistakes
- Writing contracts that say “no sick leave during probation”
- Rostering 50–60 hours every week with no overtime
- Refusing public holiday pay at places like Perth Airport or Elizabeth Quay venues
Note
Minimum working conditions are not one NES item – they are created by several NES together, particularly hours, leave, public holidays and notice of termination.
3) Unfair Dismissal
What it means
An employee cannot be dismissed in a harsh, unjust or unreasonable way.
A dismissal may be unfair if:
- there was no valid reason
- the employee wasn’t told the problem
- they weren’t given a chance to respond
- proper process wasn’t followed
- the decision was discriminatory
WA examples
- A mechanic in Osborne Park fired on the spot for being late once → likely unfair dismissal.
- A hospitality worker in Scarborough dismissed after raising safety concerns → could be adverse action.
- A warehouse employee in Welshpool let go with no warnings and no meeting → may breach the NES.
What businesses should do
- keep written warnings
- allow the employee to explain
- follow a fair process
- have clear workplace policies
Note
Unfair dismissal is not a standalone NES number – it is protected under the Fair Work Act, with NES item 9 providing key safeguards around notice and redundancy.
Real-world WA links (what this looks like in real businesses)
1) Underpaying junior staff by ignoring award rates
A common issue in retail is paying a “flat hourly rate” that feels reasonable, but it’s actually below the correct award rate for that age/classification.
- This often impacts Year 11/12 casuals (junior rates, casual loading, weekend penalties).
- Businesses can be forced to back-pay staff and fix systems (rosters, payslips, classifications).
- Even if the employee “agreed”, the business still has to pay the legal minimum.
2) Calling employees “contractors” to avoid leave
Some cafés and small businesses try to label workers as “contractors” so they don’t have to provide paid leave or other entitlements.
- If the worker is really treated like an employee (set shifts, boss controls work, ongoing role), the “contractor” label may not hold up.
- This can lead to claims for unpaid entitlements (leave, super, correct pay rates).
- This can also cause reputational damage — especially in local communities where staff turnover is visible.
3) Unfair dismissal claims after poor process
In mining services and trade-heavy businesses, dismissals can become risky when decisions are made quickly without proper investigation or documentation.
- Examples: “fired on the spot”, no warnings, no meeting, no chance to respond.
- Even if performance was an issue, process matters (warnings, evidence, fairness).
- Businesses often reduce risk by keeping written records and following a consistent policy.
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Biz Fact: Even if a worker “agrees” to worse conditions, the NES still override the contract.