The Law Handbook 2024

Chapter 11.5: Employment contracts, awards and agreements 1055 workplace practices and legislation are sources of further terms of a contract. Under the FW Act, the terms of an employment contract cannot displace an entitlement under the National Employment Standards ( see ‘National Employment Standards’, below), but they can offer more generous terms. Implied contract terms The common law implies certain terms into every contract of employment. These terms impose obligations on employees and employers. Further obligations in the relationship between employee and employer arise in tort, equity and from fiduciary duties. An example of a common law implied contractual term is the common law duty of fidelity and confidentiality, which prevents employees from using or disclosing their employer’s trade secrets. Also implied into every contract of employment is a general duty to obey the employer’s lawful and reasonable directions. Further, all employees are obliged to exercise reasonable care and skill in the performance of their duties. Contracts of employment that do not include an express terminationprovisioncontain an implied term that the employer will give the employee ‘reasonable notice’ before terminating employment, unless the employer has summarily dismissed the employee. ‘Summary dismissal’ is dismissal without notice. An employer only has a legal right to summarily dismiss an employee without notice for serious misconduct or other conduct that justifies immediate dismissal, such as theft, fraud, sexual harassment, or causing serious and imminent risk to the health and safety of another person. Breach of an employment contract Like any contract, either party may sue for damages if an employment contract is breached. For example, when an employee is not given the requisite period of notice specified under their contract, the employee may seek damages for breach of contract. These common law rights have to some extent been superseded by statutory rights to sue for reinstatement, breach of statutory agreements, compensation and underpayment of wages. National Employment Standards What are the National Employment Standards? The FW Act created the National Employment Standards ( NES ), which took effect on 1 January 2010. Detailed information about the NES is in sections 61– 125 of the FW Act. The NES are statutory terms and conditions of employment that apply to all employees in the national system (defined in s 13 FW Act), including management employees. The NES cannot be displaced by awards, enterprise agreements or common law contracts of employment, unless that is specif­ically provided for in the FW Act. The 11 National Employment Standards In summary, the NES are: 1 Employees are to work a maximum of 38 hours per week , subject to additional hours if reasonable. These hours may be averaged over a period of time (ss 62–64 FW Act). 2 Employees have the right to request flexible working arrangements if they are experiencing circumstances specified by the FW Act (ss 65–66). These circumstances include the employee: – being pregnant; – having a disability; – being a carer within the meaning of the Carer Recognition Act 2010 (Cth); – being aged 55 years or older; – experiencing family violence or supporting someone who is experiencing family violence; or – having caring responsibilities for a child who is of school age or younger. The employer must respond in writing and can only refuse on reasonable business grounds (s 65 FW Act). 3 Eligible casual employees are entitled to receive an offer of casual conversion to a full-time or part- time (permanent) position, unless the employer has reasonable grounds not to make an offer. The casual conversion rule does not apply to small business employers (ss 66AA–66M FW Act). An employee is eligible for an offer of casual conversion if: