What effect do statutory minimum standards have on the employment relationship?

Authored by Clare Parsons, Associate and Catherine Dow, Lawyer, Corrs Chambers Westgarth. Updated by the LexisNexis Legal Writer team.

Generally, contracts of employment do not incorporate statutory minimum employment standards but operate subject to them.

However, it is possible for statutory minimum standards to be incorporated into a contract of employment as express terms. In addition, contractual entitlements that relate to matters covered by the National Employment Standards or a modern award may be enforced as “safety net contractual entitlements” under the Fair Work Act 2009 (Cth) (FW Act).

How are employment contracts affected by statutory minimum standards?

The statutory minimum standards for national system employees include:

• the National Employment Standards (NES);
• the terms of any applicable modern award;
• the terms of any applicable enterprise agreement; and
• minimum wage rates specified in the national minimum wage order (where applicable).

These minimum standards apply irrespective of any contractual arrangements between the parties.

In addition, there are various provisions in the FW Act that cannot be excluded by contract. They relate to issues such as unfair dismissal and other employment protections, and the same goes for employers’ and employees’ rights and obligations under federal, state and territory anti-discrimination statutes and occupational health and safety legislation.

The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) (Secure Jobs, Better Pay Act) amended the FW Act such that, as from 7 December 2022, by s 333B of the FW Act:

• an employee has the right to disclose or not to disclose their remuneration or the terms and conditions of their employment that are reasonably necessary to determine remuneration outcomes (s 333B(1)); and
• an employee has the right to ask any other employee about such matters: s 333B(2).