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Awards and enterprise agreements


When you accept the job your employer should inform you which award or enterprise agreement you are working under. This should be included in your letter of offer. See also: Letter of offer

Awards and enterprise agreements are legal documents. They outline the minimum entitlements you must receive for working in a particular industry or for doing a certain job. Some of these entitlements include:

  •  hours of employment
  •  pay rates
  •  penalty rates like overtime
  •  casual loadings
  •  meal allowances
  •  leave entitlements
  •  employment protection.

Awards and enterprise agreements also set out your general responsibilities as an employee as well as the responsibilities of your employer.

Your employer must pay you at least what you are entitled to under the award or agreement that applies to your job.

If you are employed under a contract your employer must pay you at least the minimum wage and entitlements as set out in the appropriate award.

Displaying awards in the workplace

Your employers should exhibit a copy of the relevant award in your workplace so you can see what your wages and entitlements are.

Adult award rates of pay

The majority of awards and agreements stipulate an age at which all employees must be paid the full adult rate of pay. Typically, this is 21 years of age but can be younger under some awards. 

Most awards make provision for adult and junior wages. Minimum rates for juniors tend to be lower than those for adults. They are often differentiated by age group. See also: Junior Rates of Pay.

Junior rates of pay

Junior rates of pay are based on the age of an employee and are usually set as a percentage of the adult rate. Junior rates of pay are found in many awards and agreements.

Job classification

Your job classification should be written on your letter of offer. Jobs are classified into categories which correspond with the amount of training, skill, competencies, knowledge or experience required to do them. Each job classification has a specific rate of pay related to it which is set out in awards and agreements. An example of a job classification is: Junior shop assistant under 16 years of age.

Benefits of an award

You may prefer to work under the conditions of an award because:

  • awards provide minimum conditions of employment and rates of pay that apply across an industry or occupation
  • awards must contain provisions that set ordinary hours of employment, pay equity between males and females, redundancy entitlements, sick leave, part-time, casual employment and grievance and dispute resolution procedures
  • the rates of pay and conditions of employment are legally enforceable
  • rates of pay and conditions of employment cannot be reduced by the employer
  • minimum rates of pay are subject to review through national wage case decisions.

Enterprise agreements

If you are employed under an enterprise agreement your work contract would have been negotiated voluntarily between your employer and the employees or the union on behalf of the employees. Enterprise agreements set out the minimum conditions of employment for employees engaged in particular types of work in one particular enterprise. Agreements may cover some or all of the employment conditions under the appropriate award.

Enterprise agreements must comply with all workplace laws and, in general, employees should not be worse off under the agreement compared to awards.

An enterprise agreement:

  • has terms that override any award provisions
  • must comply with all employment laws requiring minimum entitlements to parental, annual and long service leave
  • must be in writing and signed by, or on behalf of, the parties and the parties to the agreement must be named
  • must state the employees who will be covered by the agreement
  • must be for a set term of not more than three years but can continue in force beyond that term until terminated.

Benefits of an enterprise agreement

Employees may prefer to be covered by an enterprise agreement because:

  • it is a collective agreement that can identify and address the particular needs of a business
  • the rates of pay and conditions of employment must not be less than those contained in an award and can provide greater entitlements
  • employees can be represented in negotiation by a union or it can be negotiated by a nominated committee of employees
  • if the conditions of an enterprise agreement are breached an application for remedy of the breach or recovery of entitlements can be made.

Enterprise bargaining

Enterprise bargaining is the process which employers and employees use to negotiate a set of rules and conditions for their workplace, which results in an enterprise agreement. Another term to describe enterprise bargaining is ‘workplace bargaining’.

Fixed-term contract

A fixed-term contract:

  • is an employment contract with a defined end date
  • may be linked to a specific date or completion of a project
  • may apply to employees covered by awards or agreements in certain circumstances
  • is more commonly used for employees not covered by awards or agreements, such as senior management.

Individual contract of employment

An individual contract of employment:

  •  would apply where an employee is not covered by other types of employment contracts, awards or agreements
  • is where most conditions of employment and the rate of pay are negotiated between the employee and employer
  • is not required to be registered with any industrial court, but if the contract is broken an application for a breach of contract may be made in the courts under ‘common law’
  • contains some conditions of employment such as annual leave, long service leave and parental leave, specified by legislation and these minimum entitlements still apply to the employee
  • cannot provide lesser entitlements than those contained in an award or agreement if the employee’s employment is covered by an award or agreement but can add to or provide additional benefits.


Award-free employees/ contracts

Not everyone is covered by an award. Some employees have the terms and conditions of their contract of employment mutually agreed upon with the employer. However, employment contracts are still covered by some employment laws which provide minimum entitlements such as annual and long service leave, occupational health and safety and workers compensation.

( [NSW IR Homepage]
» Employers » Recruiting staff » Conract of employment

( [NSW IR Homepage]
» Employers » Recruiting staff » Awards [Fair Work Online Homepage]



Copyright © 2011 Money Stuff

An initiative from NSW Fair Trading


Last Updated: 26 November 2012

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This information must not be relied upon as legal advice. For more information about this topic, refer to the appropriate legislation.

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