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HR Terms in Plain English

Below are some common terms used when talking about HR and compliance with Australian employment laws such as the Fair Work Act 2009.

Compliance (or non-compliance)

This term describes whether a business is (or isn't) meeting their obligations under the law.

A business that is giving their employees the correct minimum entitlements is compliant with the Fair Work Act 2009. If a business isn't giving their employees all the correct entitlements they're non-compliant.

Instrument

Not to be confused with a guitar or piano - when we say 'instrument' (or 'industrial instrument'), we're taking about all of the types of legal arrangements that can give an employee their minimum entitlements. Instruments include:

  • awards (see below)
  • agreements
  • legislation.

Award

An 'award' is a type of instrument (see above). Awards cover an occupation or industry and have the minimum terms and conditions that apply to employees who are covered by them. This can include:

  • minimum wages
  • when ordinary hours can be worked
  • penalty rates for weekends, evenings and public holidays
  • overtime rates
  • loadings for shiftworkers
  • allowances
  • leave
  • cashing out leave
  • redundancy entitlements.

There are 122 modern awards that cover most employees in Australia.

Loading

A loading is an extra payment made on top of an employee's base rate of pay.

Loadings generally come from an employee's award or agreement and are expressed as a percentage. They are paid for different reasons including:

  • being a casual employee
  • working early morning or late night shifts
  • taking annual leave.

Pro-rata

Pro-rata means proportionate. We usually use this term when we're talking about part-time employee entitlements.

For example, for leave entitlements, part-time employees are entitled to the same things as full-time employees - but on a pro-rata basis. This means that it's based on the number of hours they work.

Example

Full-time employees get at least 4 weeks annual leave every year. Part-time employees also get 4 weeks, but it's paid based on the number of hours they work per week.

So if a part-time employee works 20 hours per week, they accumulate 4 weeks after 12 months - which is 80 hours (4 x 20). Full-time employees who work 38 hours per week get 152 hours (4 x 38).

Shutting down

Many businesses decide to close down over slow business periods, such as between Christmas and New Year. This is called a shut down. In some cases employers can require their employees to take leave while the business is closed.

Find out more about > Australian Employment Law