The system of ‘modern awards’ operating under Pt 2-3 of the Fair Work Act 2009 (Cth) (FW Act) — along with the National Employment Standards (NES) in Pt 2-2 forms the ‘safety net’ of minimum employment conditions for employees covered by the FW Act.

Mandatory, permissible and proscribed terms

Part 2-3, Division 3 contains provisions setting out terms that are mandatory, permissible and proscribed in modern awards:

• • Mandatory terms include provisions relating to the coverage of modern awards, flexibility clauses and dispute settlement provisions.
• • There is a wide range of permissible terms in modern awards, relating to common terms and conditions of employment such as minimum wages, classifications, types of employment, overtime/penalty rates and leave entitlements.
• • Moderns awards must not include provisions that would breach Pt 3-1 of the FW Act, discriminatory provisions, or terms dealing with various other types of proscribed subject matter.

See Mandatory, permissible and proscribed terms.

Interaction of award terms and the NES

As a general rule, modern awards may not contain provisions excluding the NES or any provision of the NES. However, modern awards may include terms that are expressly permitted by Pt 2-2 of the FW Act, as well as terms that are ancillary/supplementary to the operation of the NES.

See Interaction of award terms and the NES.