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When an employee is not covered by an award or agreement they are considered to be award and agreement free. Award and agreement free employees may have an employment contract. They are also entitled to at least the: national minimum wage.
The main difference between a Modern Award and an EA is that EAs only apply to the employees of one particular organisation. They are tailored to suit that particular business and employees are negotiated internally and then approved by the FWC. Modern Awards are standardised and non-negotiable.
After a job offer letter is accepted by the prospective employee and the employer, it becomes a legally binding contract.
Employment Contracts and Awards the Interrelation A contract cannot take away the rights of employee which are a part of their minimum legal entitlements. Thus, these standards will continue to apply and override any employment contract in place which provides lesser entitlements than the applicable award or NES.
Depending on the circumstances, an employer can issue a new employment contract that refers to the correct award and then seek the employee's agreement to the new contract (although an employee's agreement may not diminish potential back pay obligations).
An award is an enforceable document containing minimum terms and conditions of employment in addition to any legislated minimum terms. In general, an award applies to employees in a particular industry or occupation and is used as the benchmark for assessing enterprise agreements before approval.
So what is the main difference between the two? The main difference between a Modern Award and an EA is that EAs only apply to the employees of one particular organisation. They are tailored to suit that particular business and employees are negotiated internally and then approved by the FWC.
Pay rates and the method of payment. Working hours and overtime. Conditions. Meal breaks. Holidays and leave of various types. Loading and allowances. Special rates for dangerous or piece work. Employment, grievance and termination procedures.
A breach of an award could be sued for both statutory penalty and contractual damages. On this view, awards could only override the terms of a contract of employment where those terms were inconsistent with those of the award(2).