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The HR Explainer

The HR Explainer provides explanations and definitions of over 300 employment-related topics, to assist you with the issues covered by the HR Advance documents.

Click on the A-Z list below to find the information you need.

Please note this document has not been prepared or reviewed by Australian Business Lawyers & Advisors Pty Limited. If you seek legal advice, please contact Australian Business Lawyers & Advisors at ablawyers@ablawyers.com.au.


Absorption of an increase in wage rates into an over-award payment is only relevant to employees covered by an award or agreement, and following an increase to the minimum modern award rate of pay in an Annual Wage Review decision.
Adoption leave is unpaid leave taken when a child is placed with the employee for adoption, and the employee has responsibility for the care of the child. It comes under the broad provision of parental leave. How to apply for this leave, how much leave can be taken and definitions are explained here.
Adverse action is action taken by a person or industrial association that is unlawful under the general protections provisions of the Fair Work Act. It includes dismissing or refusing to employ a person, and also includes discriminating against a person or otherwise injuring a person in their employment. Adverse action also includes action against an employee because he or she is engaging in a lawful industrial activity, and the dismissal of an employee who is temporarily absent from work due to illness or injury. Adverse action claims present considerable risks for employers.
Enterprise agreements are collective agreements made by employers and their employees under the Fair Work Act, with a number of potential benefits. They must contain specific conditions and must pass a test called the “Better Off Overall Test”. There are also specific provisions for negation and approval of enterprise agreements.
Employers can arrange to test their employees at the workplace to determine whether they are performing work under the influence of alcohol or drugs. A number of issues should be considered before implementing this strategy.
Allowances are extra amounts in addition to the minimum wage rate in a modern award or an enterprise agreement that are paid to an employee in particular circumstances. There are two broad categories and employers need to know how to pay them.
Annual close down is a general closing down of an employer’s business so all employees take annual leave simultaneously, usually over the Christmas-New Year period. Can an employer force employees to take their annual leave at this time?
Annual leave for Australian employees is provided via the Fair Work Act and sometimes by modern awards. Who is entitled to annual leave? How does it accrue? When can it be taken? What pay does an employee receive? Can an employee cash out annual leave? And is it payable on termination of employment?
Some employees are entitled to a 171/2 % annual leave loading which an extra payment to an employee taking annual leave. It is not an entitlement under the National Employment Standards (NES) but is usually provided by a modern award or an enterprise agreement.
The Fair Work Commission is required to conduct and complete an annual wage review each financial year. It varies the National Minimum Wage, usually from 1 July each year. Do employers have to pay the increase?
An annualised salary is a salary arrangement under which an employee receives a pre-determined weekly proportion of a fixed annual salary. The amount is calculated by projecting existing weekly wage rates, penalty payments and monetary allowances. It is not suitable for all types of employees.
Apprentices are provided with on-the-job training by their employer, including appropriate facilities and instruction to acquire the knowledge and skills needed to complete the apprenticeship. They must be allowed paid work time to undertake their formal training with a Registered Training Organisation (RTO). RTOs deliver vocational education and training and/or assessment services. There are different ways an apprentice can be placed with an employer and they have specific wage rates and conditions of employment in certain modern awards.
Certain areas of the Fair Work Act only apply when the employer employs 15 employees or more. When counting the number of employees, the employer must also include employees employed by an "associated entity", such as a subsidiary company.
Award-free employees are not subject to the minimum conditions of employment of a modern award or an enterprise agreement, although they are covered by the National Employment Standards (NES). The distinction is important, particularly in relation to claims for unfair dismissal.
These are industrial instruments that existed under WorkChoices, before the introduction of the Fair Work Act. They still apply for the purpose of determining an employee’s entitlement of accrued benefits.
Modern awards contain the minimum conditions that apply to most employees and form the basis of the Better Off Overall Test (BOOT) that applies to new enterprise agreements. Does an award override the Fair Work Act?