Awards and registered agreements set minimum pay rates that employees must be paid. Employees that aren’t covered by an award or agreement are entitled to the national minimum wage as a minimum.

An employer can choose to pay their employees more than they have to.

The Fair Work Ombudsman (FWO) usually only enforces an employer’s obligation to pay minimum entitlements under the Fair Work Act 2009, awards or registered agreements.

However, the FWO will sometimes enforce an entitlement that an employee has under their employment contract that is greater than their minimum entitlements.

These entitlements are known as safety net contractual entitlements.

What is a safety net contractual entitlement?

It’s an entitlement that an employee has in their employment contract that relates to a matter:

• in the National Employment Standards (NES), or
• that can be included in a modern award.

The contractual entitlement will usually be greater than the employee’s minimum entitlement under the NES or award.

Can the FWO enforce safety net contractual entitlements?

Yes. The FWO can enforce safety net contractual entitlements through contravention letters and litigation.

Employees can also apply to a court for an order in relation to a safety net contractual entitlement.

Example

Janine’s minimum hourly rate under her award is $30 an hour.

Under her employment contract Janine’s hourly pay rate is $32. This is her safety net contractual entitlement.

However, Janine has only been paid $30 an hour since her employment started.

This year Janine’s employer has also only paid her 3 weeks’ annual leave instead of 4 weeks. This is a contravention of Janine’s annual leave entitlement under the NES.

Janine’s employer refuses to fix the underpayment. The employer is taken to court over the extensive annual leave underpayment.

This means that Janine may also have her safety net contractual entitlement of $32 an hour enforced alongside the claim for annual leave.