Introduction: Employment contracts, awards and agreements

This and following chapter focus on the rights, entitlements and obligations of employees in Victoria. These derive from a wide range of sources, including statutes, awards, collective agreements, individual agreements and the common law.

The most significant statute affecting employment conditions in Australia is the federal Fair Work Act 2009 (Cth) (“FW Act”). The FW Act:

sets out most of the rights and duties of employees and employers;

sets out the procedure for the negotiation and certification of federal agreements; and

among other things, governs the affairs of federally registered unions (together with other legislation).

This chapter covers a range of topics related to employment conditions, with a particular focus on:

the common law employment contract;

workplace agreements and awards under the FW Act and other legislation;

statutory and common law terms of employment.

This chapter covers termination of employment, enforcement of entitlements and bullying at work.

Interrelationship between statute, awards, enterprise agreements and common law contracts

Terms and conditions of employment contained in legislation, awards or enterprise agreements are generally minimum terms and conditions. This means that the parties can agree by common law contract to, for example, pay more than the minimum for any one or more entitlements in the statute, award or enterprise agreement.

A common law contract of employment cannot provide for less beneficial terms than those contained in a statute, award or enterprise agreement. The employer must provide the employee with at least every minimum term or condition in the statute, award or statutory agreement.

Contracts, awards and enterprise agreement terms and conditions exist side by side, with an employee being entitled to the most beneficial terms that apply. In those circumstances, the employee is legally entitled to the contractual term for ordinary pay and the award term for overtime work.


While most states in Australia have retained their own workplace legislation for state public sector and local government employees, in Victoria the government referred its power to deal with industrial matters to the federal parliament by way of the Commonwealth Powers (Industrial Relations) Act 1996 (Vic). Most Victorian employers and employees were covered by the Workplace Relations Act 1996 (Cth). The Victorian Government referred the power necessary for the FW Act to cover all private and public sector employees and employers in Victoria.

Other legislation also affects working conditions in Victoria, such as the Commonwealth Sex Discrimination Act 1984, Racial Discrimination Act 1975 and Disability Discrimination Act 1992, and the Victorian Equal Opportunity Act 2010, Long Service Leave Act 1992 (replaced on 1 November 2018 by the Long Service Leave Act 2018) and Occupational Health and Safety Act 2004.