Employment Regulations
Australian employment law appears complex and confusing when looking from outside view although in some ways there are many similarities to other countries. Other factors that complicate matters include the differences between states in payroll administration. For these and many other reasons the following are only guidelines in the broadest sense, and professional legal services are recommended when employing in Australia.
Employment Law in Australia multiple levels of influence: aside from its foundation in common law principles, there is minimum standards defined by legislation (primarily the “Fair Work Act”). However if the employment falls under a statutory “Award” it may have differing or extra conditions on top of the legislation. Collective agreements such as “Enterprise Bargaining Agreements”, can apply specific conditions on the top legislation or Award.
While employment law was mostly unified with the introduction of the Fair Work Act, the state of Western Australia did not fully acquiesce to referral of power to the federal government. Most types of employers are covered by the federal government, and employment law in general in Western Australia remains highly similar, but as a warning, there may be variations in obligations and standards.
Exceptions include State employees working in public sector agencies from New South Wales, Queensland, South Australia and Tasmania, local council workers in New South Wales, Queensland and South Australia, and in Western Australia where the Fair Work Act legislation only covers workers employed by a “constitutional corporation”, which includes trading and financial corporations, corporations formed outside of Australia, and federal government agencies.
Key Factors to Consider When Employing in Australia:
There are several key areas to be aware of within Australia’s employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department. These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the local laws and rules for both local employees as well as foreign nationals.
Contracts
All employees in Australia will have a common law contract of employment that specifies the terms and conditions of employment.
Employee Entitlements
Statutory Working Hours
38 hours
Paid Public Holidays
The public holidays for 2019 in Australia are as follows:
- New Year’s Day (1 January)
- Australia Day Holiday (28 January)
- Good Friday (19 April)
- Day following Good Friday (20 April)
- Easter Sunday (21 April)
- Easter Monday (22 April)
- Anzac Day (25 April)
- Queen’s Birthday (10 June)
- Labour Day (7 October)
- Christmas (25 December)
- Boxing Day (26 December)
Public Holiday Pay Rate
Public holiday pay rates differ depending on the state or territory in which the employee is working. A public holiday pay calculator is available on the Australian Government Fair Work Ombudsman website.
Working on Sundays
Employees are allowed to work on Sundays and are entitled to a penalty rate i.e. a higher pay rate. This depends on the award, enterprise agreement and/or employment contract under which they are working. The relevant weekend pay rates for an award can be found here.
Disclosure and Confidentiality of Personal Information
The Privacy Act 1988 (Privacy Act) regulates the collection and handling of personal information through minimum privacy standards. These are known as the Australian Privacy Principles (APPs) and apply to all private sector business with an annual turnover of more than $3 million, all private health service provides and all government agencies.
In most cases, the Privacy Act and the APPs will not apply to employee records, and only apply if the information is used for something that is not directly related to the employment relationship. Complying with privacy laws is a matter of best practice of businesses.
Employee Protection and Anti-discrimination Rights
The Australian Human Rights Commission Act 1986 (Cth) protects employees from discrimination in the workplace due to their race, gender, religion, political opinion, medical record, criminal record, and trade union activity, in addition to other factors. The Fair Work Ombudsman receives complaints from employees who are experiencing discrimination, bullying, harassment or other adverse treatment in the workplace.
Time Off Work
Community service leave: The employee is entitled to paid time off of up to 10 days for jury service (after 10 days is unpaid) and unpaid leave for voluntary emergency work.
Medical Leave
All full-time employees (except casual employees) are entitled to a minimum of 10 days paid personal leave each year. These days can be used for time off for sickness. The employee can take personal leave if they or an immediate family member is sick, injured or has an unexpected emergency. In addition, employees may take up to two days of unpaid leave under ‘compassionate’ grounds – such as due to the death of a family member and 2 days unpaid caregiver’s leave.
Annual Leave Accrual Entitlement
An employee (other than a casual employee) is entitled to 4 weeks of paid annual leave for each year of service with the employer. An employee classified as a ‘shiftworker’ is entitled to 5 weeks of paid annual leave.
Does accrual start from first day of work
Yes
Annual Leave Expiry
Annual leave does not expire.
Annual Leave Monthly Accrual
1.67 days of annual leave is accrued per month, pro-rated for each day worked.
Annual leave reporting frequency
Monthly
Annual Leave Accrual Cash Out
Annual leave may be cashed out as long as the employee will have at least 4 weeks of annual leave left over. This needs to be supported by a written agreement between the employer and employee.
Annual Leave Accrual paid to Employee
The annual leave accrual is paid to the employee through payroll.
Managing pre-existing Annual Leave
Pre-existing annual leave can be carried over into the GEO employment.
Accrued Leave at Termination
At termination, accrued annual leave must be paid out in full (unless it can be carried over into a new employment).
Negative annual leave accrual
By agreement between the employee and employer, the employee may be entitled to ‘annual leave in advance’ where they are paid for more annual leave days than they have accrued. Unless specifically covered by the award, if the employment terminates whilst the employee has a negative leave accrual, there is no recourse for the employer to deduct that amount from the termination payment.
Paid Sick Leave Entitlement
All full time employees are entitled to a minimum of 10 days paid personal leave which can be used for sick leave.
Maternity Leave in Australia
Employees in Australia are eligible for unpaid parental leave if they have completed at least 12 month of service with the employer.
The employee should inform their employer of their intention to take unpaid parental leave by giving at least 10 weeks written notice. Each eligible member of an employee couple may take a separate period of up to 12 months of unpaid parental leave. If only one person is taking leave, that employee may request up to 12 months.
For a pregnant employee, leave can start up to six weeks before the expected date of birth. If the employee is not giving birth to the child, leave starts on the date of birth or placement of the child.
Employment Termination
Resignation / End of Service Payment
A transitional entitlement for employees as outlined in an applicable pre-modernized award, pending the development of a uniform national long service leave standard
Severance / Redundancy Pay
The Fair Work Australia website reports that for any wages and holiday time owed, the employer must also pay a severance if theemployee is made redundant. If the employee has at least one year of continuous service and the employer employs 15 (i.e. does not fall under the ‘Small Business’ code) can be entitled to a maximum of 16 weeks pay).
Termination of Employment
The Fair Work Australia website reports that an employer must provide a minimum period of notice, as follows:
- Less than 1 year: 1 week
- Between 1 and 3 years: 2 weeks
- Between 3 and 5 years: 3 weeks
- Over 5 years: 4 weeks
If the employee is over 45 years old, and has completed at least two years of service, additional one week’s notice is required.
The Fair Work Australia website explains the termination procedure in Australia. The employer must have cause for termination, and in particular it must not be unlawful (e.g. discriminatory on grounds of race, gender, etc) and not be “harsh, unjust or unreasonable”. Generally the employer must show they took reasonable steps, such as performance reviews and several formal warnings, and counselling the employee to give them a proper opportunity to understand and rectify any performance issues. Employees can be dismissed under the context of a redundancy so long as the redundancy is genuine.
Fixed-term contracts can allow the relationship to expire at the end of the term specified in the contract.
Probation Period
Probation period is also known as “minimum employment period”. According to IHR Australia, the maximum period in Australia is six months, or up to twelve months for small business employers (businesses with fewer than fifteen staff).
