Office of the Australian Building and Construction Commissioner.

The FW Act sets out when a person takes adverse action against another person.

It includes actions taken by:

• employers against employees and prospective employees
• employees against employers
• industrial associations
• and against independent contractors.

Adverse action includes dismissal of an employee but also includes a range of other actions such as prejudicing an employee or independent contractor and organising industrial action against another person.

For example:

• an employer takes adverse action against an employee if the employee is dismissed or discriminated against
• an employee takes adverse action against their employer if they stop working.

This term is defined in section 342 of the FW Act.

See Australian Fair Pay Commission

An agreement-based transitional instrument is either an individual agreement-based instrument or a collective agreement-based instrument.

• Individual agreement-based instruments include:
  • Australian Workplace Agreements (AWA)
  • Individual Transitional Employment Agreements (ITEA)
  • Preserved Individual State agreements.
• Collective agreement-based instruments include:
  • Collective agreements
  • Certified agreements
  • Old IR Agreements
  • Preserved Collective State Agreements
  • Section 170MX Awards
  • Workplace Determinations (made between 27 March 2006 and 30 June 2009).

This term is defined in subitem 2(5) of Schedule 3 to the FW (TPCA) Act.

See Australian Industrial Relations Commission.

An additional payment under an industrial instrument (e.g. modern or enterprise agreement) made to an employee for all purposes.

All purpose allowances may be part of base rates of pay in some (limited) circumstances.

Additional payments made to an employee for doing certain tasks, working in certain locations, using a special skill, or for expenses s/he incurs doing his/her job.

Allowances are set out industrial instruments (such as modern awards).

Common allowances include:

• tool allowance
• shift allowance
• industry allowance.

Most allowances in modern awards (other than those that form part of the base rate of pay) commenced from 1 January 2010.

Some allowances may apply for all purposes.

See also industry allowance and all purpose allowance.

A review of minimum wage rates conducted by a Minimum Wage Panel within Fair Work Australia (FWA).

In an annual wage review FWA may set or vary minimum wages in modern awards, and must make a national minimum wage order.

See Australian Pay and Classification Scale.

An employee that is employed under a 'training arrangement'.

A 'training arrangement' is a combination of work and training that is subject to a training agreement or a training contract between the employee and employer that takes effect under a State or Territory law relating to training employees.

See also school-based apprentice.

The Australian Industrial Relations Commission (AIRC) was an independent, national Tribunal that dealt with employment issues including industrial action, termination of employment and award modernisation.

When the FW Act commenced on 1 July 2009 most of the Australian Industrial Relations Commission’s functions were transferred to Fair Work Australia.

However, the Australian Industrial Relations Commission continued in existence, in parallel with Fair Work Australia, to complete matters and processes that it had started before 1 July 2009, including the award modernisation process (until 31 December 2009).

Fair Work Australia completely replaced the Australian Industrial Relations Commission from 1 January 2010.

The Australian Fair Pay and Conditions Standard (commonly referred to as ‘the Standard' or the ‘AFPCS’) - set out 5 minimum conditions about:

1. basic rates of pay and casual loadings
2. hours of work
3. annual leave
4. personal / carer's and compassionate leave, and
5. parental leave and related entitlements.

The Australian Fair Pay and Conditions Standard was set out in the WR Act.

The terms and conditions in the Australian Fair Pay and Conditions Standard other than wages were replaced by the National Employment Standards (commonly referred to as ‘the NES’) in the FW Act and modern awards.

The Australian Fair Pay Commission was responsible for adjusting federal minimum wages and Australian Pay and Classification Scales (commonly referred to as ‘pay scales’ or ‘APCSs’) under the WR Act from 2006 until its repeal in 2009.

The Australian Fair Pay Commission was replaced by the Minimum Wages Panel of Fair Work Australia in 2009.

Australian Pay and Classification Scales were part of the Australian Fair Pay and Conditions Standard in the WR Act. They are commonly referred to as “APCSs” or “pay scales”.

All Australian Pay and Classification Scales included rate provisions that determined basic periodic rates of pay and / or piece rates of pay. They could also include casual loading provisions and frequency of payment provisions.

Australian Pay and Classification Scales could have been derived from a federal award, a Victorian industry sector minimum wage order, State award, a State minimum wage (e.g. State legislation that set out the minimum wage in NSW, QLD, SA, TAS and WA).

On and from 1 July 2009 Australian Pay and Classification Scales became a type of “transitional wage instrument” and are now referred to as “transitional APCSs”.

Wage rates in modern awards replace Australian Pay and Classification Scales.

An Australian workplace agreement (commonly referred to as “AWA”) is an individual statutory agreement between an employer and an individual employee that sets out terms and conditions of employment.

AWAs could not be made after 28 March 2008. However, an AWA made before 28 March 2008 continues to operate as an individual agreement based transitional instrument until it is terminated or replaced.

See Australian workplace agreement.

The following types of instruments are award-based transitional instruments:

• Pre-reform award (all States and Territories) – “AP”
• NAPSAs (all States other than Victoria) – “AN”
• State reference transitional award (all States other than WA) – “AT”
  • Division 2A State reference transitional awards
  • Division 2B State reference transitional awards
• Common rule awards (ACT, NT & VIC)

This term is defined in subitem 2(5) of Schedule 3 to the FW (TPCA) Act.

The minimum rate of pay payable to an employee for his or her ordinary hours of work.

An employee’s base rate of pay may be determined by reference to a number of different sources (including):

• the employee’s modern award
  • Where the model transitional provisions apply, an employee's base rate of pay will be determined by reference to the employee's pre-modern award rate of pay and modern award rate of pay
• an industrial instrument that has a higher rate than the modern award (e.g. an enterprise agreement)
• the National Minimum Wage Order.

This term is defined in section 16 of the FW Act.

A test that Fair Work Australia uses to assess enterprise agreements against modern awards.

Except in limited circumstances, an enterprise agreement will not be approved by Fair Work Australia unless it passes the Better Off Overall Test.

An enterprise agreement will pass this test where Fair Work Australia is satisfied that each employee that would be covered by the agreement would be “better off overall” if the agreement applied to them, rather than the relevant modern award.

See Better Off Overall Test.

Casual loading is an amount paid on top of the base rate of pay to casual employees.

The purpose of a casual loading is to compensate casual employees for not getting certain entitlements that permanent employees receive, such as paid annual leave and personal (sick) leave.

An employer is “cited” to an award-based transitional instrument or a transitional award where the employer is named in the award as a respondent (e.g. in a Schedule at the back).

See also Respondent / Respondency

A classification of employees classifies employees into types for the purposes of pay and other entitlements under an industrial instrument (such as a modern award or enterprise agreement).

A classification outlines the type of work an employee does and sometimes their expected skill level or required qualifications. Different classifications apply to employees doing different work.

To determine an employee’s classification level, it is important to consider:

• the nature of the work performed by the employee
• the employee's skills and qualifications
• the employee's level of responsibility.

Classification structures are included in all modern awards.

A classification pair consists of an employee’s classification level in his/her pre-modern award instrument and the corresponding new classification level in his / her modern award.

A collective agreement is an agreement made between one or more employers and a group of employees or a union representing a group of employees.

See also WR Act collective agreement.

In Victoria, Northern Territory and the Australian Capital Territory pre-reform awards and transitional awards can apply to employers across an industry and /or who employ certain classes of employees (e.g. clerical workers). Those employers are bound to the terms of the award by ‘common rule’ and do not need to be specifically cited as a respondent to the award.

ComLaw is an online database of Commonwealth laws including legislation, bills (draft legislation), explanatory memoranda and legislative instruments (such as regulations).

This service is free and is maintained by the Australian Attorney-General’s Department.

www.comlaw.gov.au

Conciliation is one of the informal processes used by Fair Work Australia (FWA) to facilitate the resolution of a grievance or a dispute between parties by helping them reach an agreement. FWA doesn't impose a decision on the employer and employee in conciliation.

To be a constitutional corporation, an employer must be either:

• a foreign corporation (a corporation incorporated outside Australia that does business in Australia)
• a financial corporation formed in Australia
• a trading corporation formed in Australia.

This term is defined in section 12 of the FW Act and paragraph 51(xx) of the Commonwealth Constitution.

Those employers who were not otherwise part of the national system (e.g. because they were not constitutional corporations) but were bound by a federal award on 27 March 2006 became bound by a transitional award that was only to operate until 27 March 2011.

In all referring States (all States except Western Australia) these awards are now known as State reference transitional awards (except for some employers who are excluded from the reference (e.g. local governments in some States).

In Western Australia they continue to operate until 27 March 2011 as Continuing Schedule 6 instruments.

See also State reference transitional award and transitional award.

A contract of employment is an agreement between an employer and employee about the terms and conditions of employment for the employee (such as wages and other entitlements).

The terms of the contract may be written, oral and in some cases, implied. All employees have a contract of employment, even if an industrial instrument (e.g. modern award) applies to their employment.

A contract of employment can also be referred to as a “contract of service”.

A contract of employment is not a registered or statutory agreement.

Provisions in an industrial instrument (e.g. a modern award or enterprise agreement) that determine who is covered by it.

These provisions are also known as ‘scope clauses’.

Money taken out of an employee's pay by his / her employer.

Deductions are regulated by the FW Act (see Division 2 of Part 2-9 and associated regulations).

Generally speaking, an employer is allowed to make a deduction from an employee's pay if:

• the employee agreed in writing and the deduction is principally for the employee's benefit, or
• the employee authorised the deduction in accordance with an industrial instrument (e.g. a modern award or an enterprise agreement), or
• the deduction is authorised by an order of Fair Work Australia, or
• the deduction is authorised by or under a law or an order of a court.

Generally speaking, an employer cannot make a deduction from an employee's pay if:

• the deduction is for the benefit of the employer and is unreasonable, or
• if the employee is under 18 years of age and the employee's guardian or parent hasn't authorised the deduction in writing.

A type of superannuation fund.

Under this type of fund an employee’s benefit does not depend solely on his / her contributions and earnings, but on other factors such as years of service and average salary. For example, the rules of the fund could provide that benefits are based on an employee’s salary before they retire and / or their length of service.

This is different to an accumulation fund (the most common type of superannuation fund), which invests contributions and provides benefits based on the return on those investments.

Provisions that relate to outworkers in the textile, clothing or footwear industry including terms that regulate minimum work conditions of contract outworkers or impose conditions in relation to giving out work that is normally performed by outworkers.

These outworker terms are referred to as “designated” from modern awards because they cannot be modified in bargaining and they apply to everyone covered by the modern award in the same way.

This term is defined in section 12 of the FW Act.

This is a payment for people whose physical, intellectual or psychiatric impairment prevents them from working, or for people who are permanently blind.

People who can get the Disability Support Pension are aged 16 or over and under Age Pension age, and are:

• assessed as not being able to work or be retrained for work of at least 15 hours per week within 2 years because of illness, injury or disability, or
• permanently blind, or
• participating in the Supported Wage System (SWS).

There are also requirements relating to Australian residency.

For more information refer to www.centrelink.gov.au

When someone is not treated fairly or given the same opportunities because of personal characteristics or attributes.

Under the FW Act, it is unlawful for an employer to discriminate against an employee or prospective employee on the basis of race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

Exceptions apply where the discrimination is:

• authorised by or under a State or Territory anti-discrimination law
• taken because of the inherent requirements of the particular position concerned
• taken against certain persons in good faith for religious reasons

A term of a workplace agreement, enterprise agreement or modern award that discriminates against an employee on the basis of race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

Termination of an employee’s employment by his / her employer.

State awards for a particular enterprise that covered State reference employers (e.g. non-constitutional corporations) and their employees in New South Wales, Queensland, South Australia and / or Tasmania immediately before 1 January 2010 are called ‘Division 2B State enterprise awards’

State awards that covered State reference employers (e.g. non-constitutional corporations) and their employees in New South Wales, Queensland, South Australia and / or Tasmania immediately before 1 January 2010 are called ‘Division 2B State awards’.

Employers must have actually been covered by the former State award on 31 December 2009 in order to be covered by the Division 2B State award.

Division 2B State awards (other than Division 2B enterprise awards) terminate on1 January 2011. Those employers will generally be covered then by modern awards.

A type of transitional award that applies to employers that are non-constitutional corporations (and otherwise not within the national system) (and their employees) in Victoria.

A transitional award is a type of federal award that was in force immediately before 27 March 2006 and applied to non-constitutional corporations.

Division 2A State reference transitional awards are replaced by modern awards (where there a modern award that covers the employee) from 1 January 2010.

See also State reference transitional award and transitional award.

A type of transitional award that applies to employers that are non-constitutional corporations and their employees in New South Wales, Queensland, South Australia and Tasmania.

A transitional award is type of federal award that was in force immediately before 27 March 2006 and applied to non-constitutional corporations.

Modern awards replace Division 2B State reference transitional awards from 1 January 2010.

See also State reference transitional award and transitional award.

Pre-modern award and modern award rates which:

• apply for the same purpose, and
• apply for the same time periods, and
• apply in the same way, but
• are different monetary or percentage amounts.

A pre-modern award and modern award loading / penalty applies in the same way if the entitlements are both:

• paid at the same frequency, such as per hour or per shift, and
• paid as a percentage of the same amount
  • e.g. both penalties are paid as a percentage of the employee’s classification rate, rather than as a percentage of a different amount or paid as a flat dollar amount.

For casual employees, the penalty rates also need to interact with casual loadings in the same way. For example, under the pre-modern award and modern award:

• the casual loadings and the penalties rates are both paid on the base rate of pay, or
• the penalty rates are both paid on the casually loaded rate. That is, the rate found by adding the casual loading to the base rate of pay

This concept is used in the model transitional provisions (in modern awards).

A business, activity, project or undertaking. This term is defined in section 12 of the FW Act

An agreement made under the FW Act (on or after 1 July 2009) between one or more employers and a group of employees in relation to terms and conditions of employment for those employees.

Enterprise agreements can be either:

• a single-enterprise agreement or
• a multi-enterprise agreement.

Single-enterprise agreements are usually made between a single employer and a group of employees. However, they can apply to more than one employer in limited circumstances (e.g. where two or more employers are engaged in a joint venture).

Multi-enterprise agreements are made between two or more employers and groups of their employees.

Single-enterprise and multi-enterprise agreements relating to a new enterprise can also be made between one or more employers and one or more unions before any employees are employed. These types of enterprise agreements are referred to as “greenfields agreements”.

A type of pre-reform award (made by the Australian Industrial Relations Commission before 27 March 2006) that applies to one business, activity, project or undertaking.

Enterprise awards are not replaced by modern awards but the parties can apply to Fair Work Australia to replace an enterprise award with a modern enterprise award.

If the parties do not make an application to ‘modernise’ their enterprise award by 31 December 2013, it will cease to operate.

See also modern enterprise award.

See Australian Fair Pay Commission.

A Tribunal established by the FW Act.

Fair Work Australia is the national workplace relations tribunal. It is an independent body with power to carry out a range of functions covering:

• the safety net of minimum wages and employment conditions
• enterprise bargaining
• industrial action
• dispute resolution
• termination of employment

The Fair Work Ombudsman is an independent statutory office created by the FW Act.

The statutory functions of the Fair Work Ombudsman include promoting harmonious, productive and cooperative workplace relations and ensuring compliance with Commonwealth workplace laws.

In exercising these functions, it:

• offers people a single point of contact for them to get accurate and timely advice and information about Australia’s workplace relations system
• educates people working in Australia about their workplace rights and obligations
• investigates complaints or suspected contraventions of workplace laws, awards and agreements; and
• litigates to enforce workplace laws and deter people from doing wrong in the community.

The functions of the Fair Work Ombudsman are set out in Part 5-2 of the FW Act.

Nicholas Wilson is the current Fair Work Ombudsman.

This is a term used to describe both a pre-reform award and a transitional award.

The Federal Minimum Wage / National Minimum Wage is a safety net for employees in the national workplace relations system. It applies where employees do not have an entitlement to wages under a modern award or pre-modern award.

The current rate is $15.00 per hour / $569.90 per week (for an employee working a 38-hour week).

Where this concept is used before 1 January 2010 it is referred to as the Federal Minimum Wage. Where it is used on or after 1 January 2010 it is commonly referred to as the National Minimum Wage.

The Federal Minimum Wage / National Minimum Wage does not apply to:

• Junior employees;
• Apprentices
• Trainees; or
• Employees with a disability who are covered by a special Federal Minimum Wage / special National Minimum Wage.

Federal Minimum Wage

Fair Work Australia

Office of the Fair Work Ombudsman

Fair Work Act 2009 (Cth)

Fair Work Regulations 2009 (Cth)

Fair Work (State Referral and Consequential and Other Amendments) Act 2009 (Cth)

Fair Work (Registered Organisations) Act 2009 (Cth)

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)

General Employee Entitlements and Redundancy Scheme.

The General Employee Entitlements and Redundancy Scheme is a basic payment scheme established to assist employees who have lost their employment due to the liquidation or bankruptcy of their employer and who are owed certain employee entitlements.

It covers capped unpaid wages, annual and long service leave, capped payment in lieu of notice and capped redundancy pay.

An employee’s dismissal is a case of genuine redundancy if:

• their employer no longer requires the employee's job to be done by anyone because of changes in the operational requirements of the employer's enterprise
• the employer has met any obligation to consult (e.g. with affected employees) about the redundancy.

An employee’s dismissal is not a case of genuine redundancy if it would have been reasonable for the employee to be redeployed within the employer’s enterprise or an associated entity.

This term is defined in section 389 of the FW Act.

A concept under the FW Act requiring parties to act in good faith when negotiating an enterprise agreement.

The requirements include:

• attending, and participating in, meetings at reasonable times
• disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner
• responding to proposals made by other bargaining representatives for the agreement in a timely manner
• giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals
• refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining
• recognising and bargaining with the other bargaining representatives for the agreement.

However, the good faith bargaining requirements do not require:

• a bargaining representative to make concessions during bargaining for the agreement; or
• a bargaining representative to reach agreement on the terms that are to be included in the agreement.

This term is defined in section 228 of the FW Act.

The total amount an employee has earned before income tax and other deductions are taken out.

Pre-modern award and modern award penalty rates that are exactly the same in every way.

To be identical the pre-modern award and the modern award penalty rates must:

• apply for the same purpose; and
• apply for the same time periods; and
• apply in the same way; and
• be the same amount.

For casual employees, the penalty rates also need to interact with casual loadings in the same way. For example, under the pre-modern award and modern award:

• the casual loadings and the penalties rates are both paid on the base rate of pay; or
• the penalty rates are both paid on the casually loaded rate. That is, the rate found by adding the casual loading to the base rate of pay.

This concept is relevant for the application of the model transitional provisions (in modern awards).

See individual flexibility agreement.

A government tax charged on what a person earns. The amount of income tax paid depends on how much is earned and other entitlements and exemptions.

A person or business engaged under a contract for services.

An agreement between an employer and an employee that varies the effect of a modern award or enterprise agreement. The individual flexibility agreement must satisfy the better off overall test. However, there is no requirement to register an individual flexibility agreement.

This term is defined in section 12 of the FW Act.

An individual transitional employment agreement (ITEA) is a statutory written agreement between an individual employee and an employer about the employee’s terms and conditions of employment.

Australian workplace agreements (AWAs) could not be made after 28 March 2008. From then until up to 31 December 2009 ITEAs could be made. ITEAs have a nominal expiry date of 31 December 2009 (or earlier if specified in the agreement).

ITEAs are now individual agreement based transitional instruments.

Industrial action by employees includes:

• performing work in a different way from usual so as to restrict, limit or delay the performance of their work
• failing or refusing to attend work or perform any work at all
• observing a ban, limitation or restriction on performing their work.

Industrial action by employers includes locking employees out of their workplace so they cannot perform any work.

This term is defined in section 19 of the FW Act.

Industrial action can be either ‘protected industrial action’ or ‘unprotected industrial action’.

See protected industrial action and unprotected industrial action.

An industrial instrument recognised or registered under the national workplace relations system sets out minimum conditions of employment for employees to whom they apply or they cover.

Common instrument types include modern awards, enterprise agreements, award-based transitional instruments and transitional minimum wage instruments and agreement-based transitional instruments (e.g. formerly WR Act collective agreements, AWAs, ITEAs and pre-reform certified agreements).

Industrial instruments:

• are made under or recognised by a workplace relations law
• concern the relationship between an employer and employee(s).

An industry allowance is a payment that is made to all employees across an industry, for all hours they work, to compensate for the nature of work in the industry.

Industry allowances may be included in base rates of pay.

An injunction is a court order that requires someone to do / stop doing a specific action.

An instrument code is allocated to an industrial instrument to help people identify what it is.

The instrument types and codes are:

• AN - Notional agreement preserving State awards (NAPSA)
• AP - Pre-reform award
• AT - Transitional award
• AW - Federal award
• MA - Modern award
• RA - Division 2B State award
• RE - Division 2B enterprise award

See Individual Transitional Employment Agreement.

A junior employee under the FW Act is a national system employee who is under 21 years of age.

This term is defined in section 12 of the FW Act.

Some industrial instruments could contain a different definition for a junior employee.

An additional payment made above an employee's base rate of pay, (e.g. for working shift work).

See also casual loading.

This is a leave type that's generally available to employees after they've spent a long period of time with a single employer. For example, they've worked 10 years’ continuous service for the same employer.

Long service leave is part of the National Employment Standards.

An award made by the AIRC as part of the award modernisation process. Future modern awards can be made by FWA.

Modern awards operate together with the National Employment Standards (NES) to provide minimum conditions of employment for employers and employees in the ‘national system’.

Modern awards supplement the NES by setting out additional minimum terms and conditions that apply in a particular industry or occupation including monetary entitlements such as wages, penalty rates and allowances.

Modern awards consolidated and replaced terms and conditions of employment that were previously contained in certain federal instruments (e.g. pre-reform awards and NAPSAs).

Modern awards also include minimum wage entitlements that were previously contained in the Australian Fair Pay and Conditions Standard (e.g. pay scales and the federal minimum wage).

Modern awards commenced operation on 1 January 2010.

An employee's modern award rate of pay is the rate of pay that is written in his or her modern award plus any increases made by Fair Work Australia in its annual wage review.

This may be different to an employee’s base rate of pay.

See also base rate of pay.

A type of modern award that covers only one enterprise (business, activity, project or undertaking) rather than an industry or occupation.

The model transitional provisions were created by the Australian Industrial Relations Commission (AIRC) as part of the award modernisation process.

The model transitional provisions provide for the ‘phasing in’ of increases or decreases in certain monetary entitlements in five set instalments over four years (20% per year) beginning from the first full pay period on or after 1 July 2010 and ending at the first full pay period on or after 1 July 2014, when modern award rates apply in full.

Most, but not all modern awards include the model transitional provisions. If a modern award includes the model transitional provisions, they are included in a schedule at the back of the modern award.

See notional agreement preserving State awards

The National Employment Standards (NES) are minimum standards of employment that apply to national system employees from 1 January 2010.

1. Maximum weekly hours
2. Requests for flexible working hours
3. Parental leave and related entitlements
4. Annual leave
5. Personal / carer’s leave and compassionate leave
6. Community service leave
7. Long service leave
8. Public holidays
9. Notice of termination and redundancy pay
10. Fair Work Information Statement.

The National Employment Standards are set out in Part 2-2 of the FW Act.

The standards about parental leave and notice of termination also apply to employees that are not national system employees (see Part 3-6 of the FW Act).

The National Minimum Wage (previously the Federal Minimum Wage) is a safety net for employees in the national workplace relations system. It applies where employees do not have an entitlement to wages under a modern award.

If an enterprise agreement applies and there is no modern award coverage, the base rate of pay under the enterprise agreement cannot be less than the national minimum wage.

The current rate is $15.00 per hour / $569.90 per week (for an employee working a 38-hour week).

Where this concept is used before 1 January 2010 it is referred to as the Federal Minimum Wage. Where it is used on or after 1 January 2010 it is commonly referred to as the National Minimum Wage.

The National Minimum Wage / Federal Minimum Wage does not apply to:

• Junior employees;
• Apprentices
• Trainees; or
• Employees with a disability who are covered by a special National Minimum Wage - formerly referred to as the special Federal Minimum Wage.

An order made by FWA in an annual wage review to determine the national minimum wage.

An employee to whom the national workplace relations system applies because he or she is employed by a constitutional corporation, the Commonwealth, in certain industries, is employed in a Territory, or a State reference employer.

See also State reference employers and employees.

The national workplace relations system which was introduced in and from July 2009 by the FW Act and related legislation (such as the FW (TPCA) Act, the FW (State Referrals) Act and the FW (RO) Act). It applies to most employers and employees in Australia.

Key features of the national workplace relations system include the National Employment Standards and modern awards. These entitlements came into effect from 1 January 2010.

See nominal expiry date.

See National Employment Standards.

The 'nominal expiry date' in an industrial agreement is the expiry date in name only. This means an agreement continues to exist and apply beyond a nominal expiry date.

There are different rights and obligations under the FW Act and the FW (TPCA) Act in relation to industrial action and termination / replacing an agreement depending on whether or not the agreement has passed its nominal expiry date.

Non-constitutional corporations are employers that are not constitutional corporations.

Non-constitutional corporations include:

• sole traders
• partnerships
• certain State government public sector employers, and
• corporations whose predominant activity is not trading or financial.

See also constitutional corporation.

Pre-modern award and modern award penalty rates that are not equivalent.

Non equivalent penalty rates:

• apply for different purposes; and / or
• apply for different time periods; and / or
• apply in different ways (e.g. one is paid on the base rate and the other is paid on a loaded rate).

For casual employees, the penalty rates will be non-equivalent if they interact differently with casual loadings. For example, under the pre-modern award and modern award entitlements will be non-equivalent if:

• a modern award casual loading and penalty rate are both paid on the base rate of pay; but
• a pre-modern award penalty rate is paid on the casually loaded rate. That is, the rate found by adding the casual loading to the base rate of pay.

This concept is relevant for the application of the model transitional provisions (in modern awards).

See also equivalent penalty rates.

Notional federal agreements that preserved terms and conditions of employment from State awards and / or State legislation that applied to employees of a constitutional corporation in NSW, QLD, WA, SA and TAS immediately before 27 March 2006.

The Office of the Fair Work Ombudsman was created by the FW Act.

It consists of the Fair Work Ombudsman, staff, and Fair Work Inspectors appointed by the Fair Work Ombudsman.

The Office of the Fair Work Ombudsman assists the Fair Work Ombudsman to undertake discharge his / her statutory functions in the national workplace relations system.

Occupational health and safety

An outworker is an employee (or a contractor in the textile, clothing or footwear industry) who works at residential premises, such as their own home, or other premises that are not regarded as business premises.

This term is defined in section 12 of the FW Act.

Overtime is often defined in an industrial instrument (e.g. a modern award or enterprise agreement) as time worked in excess of 38 hours or outside of ordinary hours. It could be defined differently in a particular instrument.

Industrial instruments will often provide for overtime work may be paid at a higher rate of pay.

Overtime entitlements in modern awards are not covered by the model transitional provisions.

A partnership is the legal relationship created when two or more people go into business together.

This relationship is generally regulated by State or territory legislation.

A term encompassing maternity leave, paternity leave and adoption leave.

Parental leave is part of the National Employment Standards. Non-national system employees also have rights to parental leave under the FW Act (see Part 6-3).

An employee who works less hours than a full-time employee.

Part-time employees generally receive the same entitlements and benefits as full-time employees, but on a proportional (pro-rata) basis.

See Australian Pay and Classification Scale.

A record of pay that employers must provide to employees within one working day of paying them for the work they perform for the employer.

The rules about what must be included in pay slips are set out in regulation 3.46 of the FW Regulations.

A higher rate of pay for work done outside usual working hours, such as late at night or on public holidays.

For the purposes of the model transitional provisions, a penalty rate means:

• Saturday, Sunday, public holiday, evening or other penalty; and
• shift allowance/penalty

FWO does not consider overtime to be a penalty rate.

Personal leave is part of the National Employment Standards and includes:

• paid personal / carer’s leave;
• unpaid carer’s leave; and
• compassionate leave.

An employee is entitled to 10 days of paid personal leave per year in accordance with the National Employment Standards.

Personal leave was also part of the Australian Fair Pay and Conditions Standard.

The process of implementing certain monetary entitlements in modern awards in five 20% increments over a four year period from the first full pay period on or after 1 July 2010 in accordance with the model transitional provisions (in modern awards).

This can involve modern award entitlements ‘phasing in’ and pre-modern award entitlements ‘phasing out’.

A pieceworker is an employee who is described or defined as a pieceworker in a modern award or enterprise agreement that applies to that employee.

These are usually employees that are paid by output or piece they produce rather than by time. Piecework is common in the textile and horticulture industries.

This term is used to describe employers that became part of the national workplace relations system from 27 March 2006 as a result of the Work Choices changes to the WR Act. These employers are constitutional corporations (e.g. bodies corporate) that were employing staff and covered by State systems immediately before 27 March 2006.

It does not include employers that were already part of the national system at this time (e.g. because they were bound by a federal award).

An employee's pre-modern award rate of pay is found in the transitional minimum wage instrument (e.g. pay scale or in some cases a transitional award or common rule), that applied or would have applied to him / her immediately before 1 January 2010.

In most cases, the pre-modern award rate of pay will be compared against the corresponding modern award rate of pay to determine an employee's base rate of pay.

A term used by the Office of the Fair Work Ombudsman (not a legal term) to refer to both award-based transitional instruments and transitional minimum wage instruments. These instruments have been or will be replaced by modern awards from 1 January 2010.

The term pre-modern award includes all of the following types of instruments:

• Award-based transitional instruments
  • Pre-reform awards (all States and Territories) – “AP”
  • NAPSAs (all States other than Victoria) – “AN”
  • State reference transitional awards (all States other than WA) – “AT”
    • Division 2A State reference transitional awards
    • Division 2B State reference transitional awards
  • Common rule awards (ACT, NT & VIC)

• Transitional minimum wage instruments
  • Australian Pay and Classification Scales (APCS) (referred to as a transitional APCS from 1 July 2009). These are commonly referred to as “pay scales”.
  • The standard Federal Minimum Wage (FMW) (referred to as the transitional standard FMW from 1 July 2009).
  • A special Federal Minimum Wage (referred to as a transitional special FMW from 1 July 2009).
  • The 20% default casual loading in the Australian Fair Pay and Conditions Standard (referred to as the transitional default casual loading from 1 July 2009).

A number of these instruments are defined separately in this glossary.

Terms and conditions of employment in award-based transitional instruments and transitional minimum wage instruments that have been or will be replaced by modern awards.

Modern award entitlements replace pre-modern award entitlements including:

• monetary entitlements such as allowances and penalty rates that were set out in award-based transitional instruments (e.g. pre-reform awards and NAPSAs)
• minimum wage entitlements that were previously contained in transitional minimum wage instruments (e.g. casual loadings and base rates of pay).

A type of industrial instrument that was made by the Australian Industrial Relations Commission before 27 March 2006.

Pre-reform awards set out minimum conditions of employment for some or all of an employer’s employees.

Pre-reform awards could apply by:

• citation (where the employer is a named respondent)
• respondency where the employer was a member of an employer association that was bound to the pre-reform award
• common rule across an industry (in Victoria, the ACT and/or the NT)
• WR Act transmission of business or transfer of business under the FW Act.

Most pre-reform awards (other than enterprise awards) were replaced by modern awards on 1 January 2010. From 1 July 2009 they became a type of “award based transitional instrument”.

This is a type of collective agreement that was made before 27 March 2006. It was certified in accordance with the WR Act by the Australian Industrial Relations Commission.

This type agreement stops operating when it is:

• terminated by Fair Work Australia; or
• replaced by an enterprise agreement.

Pre-reform certified agreements that apply to non-national system employers and employees that were certified on the basis of settling an industrial dispute will cease to operate on 27 March 2011.

A preserved State agreement (PSA) is a federal agreement that retains the terms and conditions of State employment agreements that applied immediately before 27 March 2006 in New South Wales, Tasmania, Western Australia, South Australia and Queensland to constitutional corporations and their employees. Any terms of a State award that determined terms and conditions of employment of the employee or State or Territory legislation that determined certain “preserved entitlements” will also form part of the PSA.

PSAs could be either collective (apply to a group of employees) or individual (apply to only one employee).

The percentage of the transitional percentage that is added to or subtracted from the modern award penalty / loading rate.

This term is used in the model transitional provisions (in modern awards).

Industrial action which is immune in most cases from any State or federal laws..

There are a number of requirements under the FW Act which must be satisfied before industrial action can be “protected”.

These requirements include:

• the action must be in relation to a proposed enterprise agreement for a single enterprise (business, project or undertaking)
• the action cannot be taken before the nominal expiry date of an existing agreement or workplace determination
• the party wanting to take the action has been and is genuinely trying to reach agreement
• the party wanting to take the action has observed notice requirements and complied with any orders or declarations
• the action is not taken in relation to unlawful terms or as part of pattern bargaining (where the action is taken by employees)
• the action is authorised (in advance) by secret ballot (where the action is taken by employees)
• action by employers must be in response to industrial action by an employee or bargaining agent

Redundancy occurs where an employer no longer needs the job that was done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of staff.

This can occur when an employer is re-structuring its business and / or introducing technological changes. It can also occur where an employer becomes insolvent or bankrupt.

Redundancy entitlements are part of the National Employment Standards (from 1 January 2010).

Where this term is used in relation to a federal award (i.e. a pre-reform award or a transitional award) it means an employer that is required to comply with the terms and conditions in the award because the employer is:

• cited (named in the award);
• a member of an employer organisation that is named in the award;
• part of industry where a common rule applies (in Victoria, the ACT and/or the NT); or
• subject to a transfer of business or WR Act transmission of business that has taken place.

Where this term is used in a dispute or court case, it means a party to a proceeding that was initiated by someone else (the complainant).

The rights and obligations of a permit holder, generally a union official, to enter work premises.

A national system employee to whom a school-based training arrangement applies. These are employees that are working as apprentices while they are also still attending school (usually secondary school).

A 'training arrangement' is a combination of work and training that is subject to a training agreement or a training contract between the employee and employer. The training arrangement must take effect under a State or Territory law relating to training employees.

This term is defined in section 12 of the FW Act.

A national system employee (other than an apprentice) to whom a school-based training arrangement applies.

A 'training arrangement' is a combination of work and training that is subject to a training agreement or a training contract between the employee and employer. The training arrangement must take effect under a State or Territory law relating to training employees.

This term is defined in section 12 of the FW Act.

A training arrangement undertaken as part of a course of secondary education.

A 'training arrangement' is a combination of work and training that is subject to a training agreement or a training contract between the employee and employer. The training arrangement must take effect under a State or Territory law relating to training employees.

This term is defined in section 12 of the FW Act.

A type of award that was made by the Australian Industrial Relations Commission before 27 March 2006 where the parties could not reach agreement by themselves.

Section 170MX awards that apply to non-national system employers and employees will cease to operate on 27 March 2011.

An employee who works fixed hours of work (shifts or rosters) that are outside or partly outside of normal working hours (e.g. 9am – 5pm).

In accordance with the National Employment Standards, shift workers are entitled to five weeks of annual leave from 1 January 2010. Whether an employee is defined as a “shift worker” will depend on the definition of shift work within the modern award or agreement that applies to them.

For the purposes of determining annual leave entitlements under the Australian Fair Pay and Conditions Standard (from 27 March 2006 – 31 December 2009), a shift worker was an employee who:

• was employed in a business that rosters 24/7 (around-the-clock) shifts
• was regularly rostered to work these shifts
• regularly worked on Sundays and public holidays.

Shut down is when an employer temporarily closes their business or any part of the business for a short period. For example, some businesses shut down between Christmas and New Year.

Industrial instruments (e.g. modern awards and enterprise agreements) may include rules about when shut downs can occur.

Leave that employees can take when they can't attend work because they are sick or injured.

Sick leave is a type of personal leave under the National Employment Standards.

Under the National Employment Standards employees are entitled to 10 days’ paid personal leave (for sick and paid carer’s leave) per year. Paid personal leave accumulates from year to year.

An employer that employs less than 15 employees, including full-time, part-time and regular and systematic casual employees.

However, for the purposes of unfair dismissal (until 31 December 2010) a small business employer is an employer that employs less than 15 full-time equivalent employees, including full time, part time and regular and systematic casual employees .

Small or medium enterprise.

An individual who runs his / her own business as an individual, rather than through a partnership or company.

See also non-constitutional corporation.

The Special Federal Minimum Wage (also known as the 'Special FMW') applies to certain employees with a disability.

The Special FMW does not apply to employees with a disability who are covered by rates of pay in a modern award or a pay scale (modern awards and pay scales can contain special provisions for employees with a disability).

Where this concept is used before 1 January 2010 it is referred to as a special Federal Minimum Wage. Where it is used on or after 1 January 2010 it is referred to as a special National Minimum Wage.

A type of transitional award that covers one or more State reference employers (and their employees). Specifically, State reference transitional awards cover employers that are non-constitutional corporations.

A transitional award is type of federal award that was in force immediately before 27 March 2006 and applied to non-constitutional corporations.

State reference employers and employees are part of the national workplace relations system as a result of referral of industrial relations powers from their respective State (all States other than WA).

State reference transitional awards can be replaced by modern awards.

See also Division 2A State reference transitional award and Division 2B State reference transitional award.

Employers and employees who are part of the national workplace relations system as a result of referral of industrial relations powers from a State.

All States other than Western Australia have referred their industrial relations powers to the Commonwealth. However, some State referrals have excluded certain employers and employees in a State (e.g. Local or State government) who will still be covered by a State system rather than the national system.

The Supported Wage System is a productivity-based wage assessment for an employee with a disability.

See also special Federal Minimum Wage / special National Minimum Wage.

Both the FW Act and modern awards provide that the implementation of modern awards are not intended to result in the reduction of an employee’s take-home pay.

If an employee suffers a reduction in his or her take-home pay as a result of transitional arrangements under the model transitional provisions, the employee or his/her union can apply to Fair Work Australia for a take-home pay order.

A take-home pay order can require an employer to retain existing rates of pay to ensure that employees do not suffer a reduction in their take-home pay.

An employee’s take-home pay will be assessed on an overall basis, taking into account that some entitlements may increase, and some may decrease under transitional arrangements.

For more information about take home pay orders contact Fair Work Australia www.fwa.gov.au

The records an employer must keep under workplace laws about the employment of each of their employees.

An employer whose business includes trading activities that form a 'significant' or 'substantial' proportion of its overall activities.

Trading activities are, for example, buying, selling, exchanging or bartering goods and services or being engaged in the business of commerce.

An employee who is employed under a training arrangement.

A 'training arrangement' is a combination of work and training that is subject to a training agreement or a training contract between the employee and employer that takes effect under a State or Territory law relating to training employees.

See also school-based trainee.

A combination of work and training that is subject to a training agreement or a training contract between the employee and employer that takes effect under a State or Territory law relating to training employees.

This term is defined in section 12 of the FW Act.

A transfer of business occurs where:

• a whole or part of a business that has existing employees is purchased or otherwise transferred (e.g. in a re-structure) to a new employer
• an employee is employed by the new employer within 3 months of the business being purchased / transferred; and
• the employee is undertaking substantially the same work for the new employer.

There are rules in the FW Act about what happens to an employee’s entitlements where there is a transfer of business. In general, the rules provide that industrial instruments (e.g. enterprise agreements) that applied to the employee before the transfer continue to apply to the employee (and the new employer) after the transfer.

The transfer of business rules in the FW Act commenced from 1 July 2009. For ‘transfers’ that occurred prior to this time, see WR Act transmission of business.

The dollar difference amount between an employee’s pre-modern award and modern award wage rates (including any applicable industry allowances) that is calculated as at 1 January 2010 for the employee’s classification and frozen for that classification for the duration of the transitional provisions (e.g. until 1 July 2014).

This term is used in the model transitional provisions (in modern awards).

A type of federal award that was in force immediately before 27 March 2006 and applied to non-constitutional corporations which were not otherwise part of the national system (e.g. because they were named in the award).

In the national workplace relations system, there are different types of transitional awards.

‘Continuing Schedule 6 instruments’ are transitional awards that are not supported by a referral of industrial relations powers from a State. These types of instruments cease to operate on 27 March 2011. After this time, employees and employers covered by one of these instruments will fall back into the State systems.

‘State reference transitional awards’ are transitional awards that are supported by a referral of industrial relations powers from a State. These types of instruments can be replaced by a modern award.

See also State reference transitional award and Continuing Schedule 6 instrument.

The difference between two equivalent loading / penalty rates (frozen as at 1 January 2010). This term is used in the context of working out loading and penalty rate entitlements in accordance with the model transitional provisions.

This term is used in the model transitional provisions (in modern awards).

Transitional minimum wage instruments set out an employee’s pre-modern award entitlement to minimum rates of pay.

The following types of instruments are transitional minimum wage instruments:

• An Australian Pay and Classification Scale (APCS) (referred to as a transitional APCS from 1 July 2009). These are commonly referred to as “pay scales”.
• The standard Federal Minimum Wage (FMW) (referred to as the transitional standard FMW from 1 July 2009). The FMW is currently $15.00 per hour.
• A special Federal Minimum Wage (referred to as a transitional special FMW from 1 July 2009). This is a special minimum wage that applies to employees with a disability.
• The 20% default casual loading in the Australian Fair Pay and Conditions Standard (referred to as the transitional default casual loading from 1 July 2009).

This term is defined in subitem 5(3) of Schedule 9 to the FW (TPCA) Act.

Unfair dismissal occurs when the employee's dismissal (termination of employment) is:

• harsh, unjust or unreasonable, and
• not a genuine redundancy, and
• the employer has not adhered to the Small Business Fair Dismissal Code (if relevant), and
• the employee is protected by unfair dismissal provisions in the FW Act.

This term is defined in section 385 of the FW Act.

For more information about unfair dismissal contact Fair Work Australia www.fwa.gov.au

Where an employee’s employment is ended by his / her employer for a reason or reasons that are discriminatory or otherwise against the law.

Industrial action that is not protected industrial action. For example, industrial action that is taken before the nominal expiry date of an enterprise agreement would be unprotected industrial action.

Unprotected industrial action may be in breach of the FW Act and may be subject to action under the FW Act.

See also industrial action and protected industrial action.

These are orders that were made by the Australian Industrial Relations Commission to set out minimum wage entitlements for employees in Victoria that were not covered by a federal award in 1996.

If an employee became covered by a federal award (e.g. by common rule) after 1996 the wages in that federal award replaced the wages in the Victorian industry sector minimum wage order.

From 27 March 2006, Victorian industry sector minimum wage orders were replaced by Australian Pay and Classification Scales “derived from” that Victorian industry sector minimum wage order.

This means that employees who obtained their wage rates from a Victorian industry sector minimum wage order before 27 March 2006 had their wage rates regulated by an Australian Pay and Classification Scales “derived from” that Victorian industry sector minimum wage order from 27 March 2006.

See also Australian Pay and Classification Scale (pay scale).

Fair Work Australia can make 3 types of workplace determinations relating to low paid employees, bargaining and industrial action.

A workplace determination is similar to an enterprise agreement but is determined by Fair Work Australia when the parties cannot reach agreement on their own.

The process and content of workplace determinations are regulated by the FW Act.

Workplace Relations Act 1996 (Cth)

An agreement that was made by the Australian Industrial Relations Commission (by arbitration) where the parties could not reach agreement on their own.

Basic periodic rate of pay was a concept that was used in the WR Act to describe an employee’s base rate of pay. An employee’s basic periodic rate of pay did not include incentive-based payments and bonuses, loadings, monetary allowances, penalty rates or any other similar separately identifiable entitlements.

Basic periodic rates that were included in pay scales were hourly rates of pay.

This term was defined in section 178 of the WR Act.

A rate of pay that was payable to an employee based on a measurable output or task rather than the number of hours worked.

This term was defined in section 178 of the WR Act

The term collective agreement was defined in the WR Act (section 4) to mean:

• an employee collective agreement
• a union collective agreement
• a union greenfields agreement
• an employer greenfields agreement, or
• a multiple-business agreement.

These types of agreement were made between 27 March 2006 (under the WR Act) and 1 July 2009 (when the FW Act commenced).

This concept was used in the WR Act to describe what happened when an employer became the “successor, transmittee or assignee of the whole, or a part, of (an existing) business” and became the new employer for any employees of that business.

In deciding whether there had been a transmission of business, courts and tribunals considered whether the business did the same things when it was run by the new employer as it did when it was run by the old employer and whether assets (tangible or intangible) moved from the old employer to the new employer.

The WR Act set out rules about what happened to an employee’s entitlements when there had been a transmission of business. In general, the rules provided that industrial instruments (e.g. workplace agreements and federal awards) that applied to the employee before the transmission of business continued to apply to the employee (and the new employer) after the transmission for a period of time.

This concept was replaced by ‘transfer of business’ under the FW Act from 1 July 2009.

See also transfer of business.