The roll out of the National Disability Insurance Scheme (NDIS) was completed on 1 July 2016. It has a number of implications for the way in which work is carried out in the disability services sector.
Flexibility
The use of individual client plans and the increasing focus on home and community care services may require employees to work at a variety of different locations at irregular or unpredictable hours.
Such changing work patterns may have implications under existing employment contracts and Modern Awards. For example, they may require the payment of penalty rates or travel allowances.
Accordingly, employers should engage in a thorough review of their existing employment contracts and the applicable Modern Award or Enterprise Agreement in order to get a clear picture of the implications of changing work patterns for their business.
It may be worth considering drafting Individual Flexibility Arrangements to account for any such changing work patterns. These allow employers to vary the terms of the relevant Modern Award or Enterprise Agreement in order to ensure that the working arrangements of its employees are best suited to the needs of the organisation. They must, however, leave the employee better off overall. This means that the terms of the IFA must place employees in a more favourable position than the relevant Award or Enterprise Agreement.
It is also crucial to know that employees of non-small business employers have a statutory “right to disconnect” under the Fair Work Act. This means they may refuse to monitor, read, or respond to work-related contact outside of working hours, unless it would be unreasonable to do so.
Cash Flow
The shift to individual funding arrangements is also likely to reduce the predictability of the cash flow of disability services providers.
Employers should be mindful that cash flow problems do not provide an excuse for a failure to comply with the Fair Work Act 2009 and to pay employees their Modern Award Entitlements. As Judge Riethmuller of the Federal Circuit Court of Australia said in Fair Work Ombudsman v Foure Mile Pty Ltd [2013] FCCA 682, [22]-[23]:
“if workers are to be employed, regardless of the state of the business, the minimum terms and conditions must be remunerated on at least the minimum terms and conditions provided for in the legislation and the awards.”
Accordingly, all disability service providers should engage in a careful business planning process prior to the roll out of the NDIS. They should make a realistic projection of their likely cash flow, and use it as a basis for determining how much they will be able to spend on employees, and whether it is more appropriate to engage workers under permanent or casual contracts.
Competition
The NDIS promotes a significant increase in competition in the disability services market.
Competition is often understood as implying the need to reduce business costs by limiting employee entitlements. This view is somewhat naïve. A business is unlikely to provide the high level of service necessary to thrive in a competitive and customer-driven market if its employees are dissatisfied with their employment arrangements, or worried about the insecurity associated with unpredictable casual work.
Employers should endeavour to strike an appropriate balance between sustainable business costs and attractive employee incentives. A good rule of thumb is to ensure that employees are at least receiving their Modern Award or Enterprise Agreement entitlements and Fair Work Act 2009 entitlements, and that there are opportunities for career and salary progression to incentivise productivity.
Mergers
Many commentators have noted that the roll out of the NDIS is likely to incentivise disability service providers to merge. JFM Law has written a detailed guide about such mergers that is specifically targeted at not for profit organisations in the disability services sector.
There are two important employment law issues that should be considered by disability service providers that are considering undertaking a merger.
First, before undertaking a merger, disability service providers on both sides of the transaction should ensure that the other party does not owe any outstanding entitlements to employees, such as unpaid wages or superannuation contributions.
Secondly, disability service providers should be mindful the Fair Work Act 2009 has a number of implications for the accrued entitlements of employees. There are circumstances in which employers who will cease to exist as part of a merger may be required to pay out the accrued entitlements of employees who are being transferred to a new employer.
How can JFM Law Help?
It is important that your organisation is fully prepared for the roll out of the NDIS. Contact JFM Law on (02) 9199 8597 for a no obligation chat or email us.
The information contained in this post is current at the date of editing – 03 October 2025.
