Australia has a copious number of attractive industries and markets for foreign businesses and investors. Whether in FinTech, mining, agriculture, or renewable energy, there are certainly lucrative opportunities for markets of all types. Consider everything here when hiring employees in Australia.
If you’ve already established yourself in one of these markets, or you’re looking in to expanding into the Australian market, one thing to be aware of is the host of employment laws in the country. While they can seem complex, a simple explanation of what to expect should put you on the path to success.
Table of Contents
Hiring Employees in Australia – Employment law governing body
The Fair Work Act of 2009 (FW Act) is the general basis for all Australia’s established employment law, as well as work, health and safety, and non-discriminatory regulations. The act creates a council, the Fair Work Commission (FWC), which oversees employment regulations, awards, and enterprise agreements.
On an annual basis, the FWC reviews minimum wage requirements for the country. Most recently, the commission deemed the minimum hourly wage in Australia would be AU$18.93.
Additionally, the FW Act states that employment contracts need not be in writing to make them official. Oral contracts suffice and hold up as legitimate. Once employment at an establishment begins, businesses are required to distribute a copy of the National Employment Standards to their new employees. These standards are covered in detail below.
The basics of employment law in Australia
The basics of employment law in Australia are based on the National Employment Standards (NES). This document outlines ten minimum employee entitlements in the workforce which employers must comply with. These minimum requirements are as follows:
- maximum 38-hour work week for full-time employees
- employees who have worked for a company for 12 months or more may request flexible working hours if they meet one of the six categories
- employees are entitled to 12 months of unpaid parental leave and may request an additional 12 months of leave
- full-time employees are entitled to annual, paid leave
- entitled to personal/carer’s leave, compassionate leave, and unpaid family and domestic violence leave
- granted paid leave for jury duty and unpaid leave for voluntary emergency management activities
- paid leave for public holidays
- long service leave
- up to 5 weeks notice of termination and up to 16 weeks redundancy pay
- Fair Work Information Statement
If a company does not comply with these standards, monetary damages may be awarded to employees, as well as possible legal repercussions enforced upon the business.
Trade Unions in Australia
Much like labor culture in New Zealand, unions in Australia play a crucial role in the employment sector. The organization serves as a representative of the employee during disputes with their employer. Moreover, unions can serve as a bargaining tool during negotiations between employees and employers. Because of their vast involvement in the job market, it is important that businesses recognize and work with trade unions and their employees.
Under the FW Act, unions have a variety of rights within the workplace. These rights include, but are not limited to:
- Representation of a member/potential member in legal proceedings
- Entering a workplace to inspect safety standards, given they have proper permits and governmental approval
- Investigating a suspected breach in health or safety protocol
- Require employers to provide them with relevant documentation and/or records
- Entering the workplace to speak with employees
Overall, unions in Australia exercise a fair share of power in the workplace and in regards to employment law. The activity levels of the unions in this country are comparatively higher than most other countries, so it is important to be aware of the rights and roles they play in employment.
Positive workplace environment, key for hiring employees in Australia
In general, these rules and regulations create a workplace environment where employees can feel safe and valued. According to Curtin University’s research report on Australia’s employee happiness in the workplace, over 40% of employees reported being very satisfied with their job. Comparatively speaking, this is a very high and favorable percentage.
Satisfied employees are typically more productive and profitable at work than unsatisfied ones. Employers stand to benefit from the implementation of these laws and the involvement of labor unions. Complying with the minimum standards is expected, but going beyond these and treating employees favorably could reap more benefits for the employer. Overall, abiding by employment law creates a safe and healthy work environment, but going above these expectations will pay off even more.
Frequently Asked Questions about Labor Laws in Australia
In our experience, these are the common questions and doubtful points of our Clients.
The labor laws in Australia, as outlined in the Fair Work Act 2009, ensure that Australian workers have certain fundamental rights. These include a minimum wage, paid leave periods, compensation when necessary, and safe working conditions. Additionally, it is specified that employees should not exceed 38 working hours per week.
Employers in Australia have a legal obligation to ensure a safe working environment for their employees. They are also required to have workers’ compensation insurance in case of any workplace accidents. The Australian Government oversees this system, and there are also state and territory laws that regulate workers’ compensation.
Employees in Australia work up to 38 hours a week, which is equivalent to 7.6 hours per day.
The current national minimum wage in Australia is $23.23 per hour or $882.80 per 38 hour week (before tax). Casual employees who are covered by the National Minimum Wage are also entitled to receive at least a 25% casual loading.
Overtime in Australia is paid according to the Award. Employees are entitled to receive 150% of the minimum hourly rate for the first 2 hours of overtime worked from Monday to Saturday and 200% of the minimum hourly rate for any additional hours. On Sundays, employees are paid 200% of the minimum hourly rate for all hours worked.
Employers and employees in Australia are required to adhere to the notice period when terminating employment unless there is serious misconduct involved. In such cases, employees may receive payment in lieu of notice. The notice period varies depending on the length of service: employees with less than 1 year of service are entitled to 1 week’s notice, while those with more than 1 but less than 3 years of service are entitled to 2 weeks’ notice.
To terminate an employee in Australia, employers must provide written notice of the day of termination. The notice period varies based on the length of service and enterprise agreements. The requirements for termination are as follows:
– Employees with less than one year of service are entitled to one week’s notice.
– Employees with more than one but less than three years of service are entitled to two weeks’ notice.
Alternatively, employers can choose to pay employees in lieu of notice, and this payment must include superannuation. It is important to note that immediate termination is only allowed for serious misconduct, which is defined as conduct that damages the trust between the employer and employee. Employers must also have a valid reason for dismissing an employee, such as poor performance or conduct.
When an employee quits in Australia, their final termination pay should be paid within seven days. This payment should include any outstanding salary up to the termination date, accrued but untaken annual leave, and if applicable, long service leave entitlements. Additionally, the employee should receive payment in respect of their notice period if it is being paid in lieu.
Contact us for help with hiring employees in Australia.
Entering the Australian market presents businesses with a host of opportunities. Inevitably, growing business may need to consider hiring employees. The Australian labor market and its rules can be complicated to navigate. When starting your move to into markets ‘down under,’ contact Biz Latin Hub for all your commercial representation and back office needs
Biz Latin Hub’s award for Business Excellence by the Australian-Latin America Business Council demonstrates the support we receive from Australian institutions to connect businesses and support start-ups in the region.
Reach out to us for assistance in navigating Latin American and Oceanian markets.
The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.