The Fair Work Act 2009 is the principal legislative instrument governing the employment  relationship in Australia. The Fair Work Commission and the Fair Work Ombudsman  (both established under this Act) are the government agencies charged with providing  for workplace-related supervision, assistance and redress for employees and employers.

The employment of most employees in Australia is  governed by the national workplace relations system.  Within that system, employment is primarily regulated  through the use of industry specific modern awards or  enterprise agreements negotiated between an employer or  employers and employees (or union officials on behalf of  employees) for a particular workplace. 

The National Employment Standards (NES) also apply to  employees under the national workplace relations system.  These standards provide a guarantee of basic minimum  benefits for employees. These ten conditions cover working  hours, leave, flexible work arrangements and termination  of employment and cannot be supplanted to the  employee’s disadvantage by a modern award, enterprise  agreement or individual employment contract.

Issues arising on hiring individuals

Immigration

Any non-Australian or non-New Zealand citizen seeking  permission to work in Australia will need to apply for a  visa from the Department of Immigration and Citizenship  (DIAC). If eligible, an employer can also sponsor an  individual to work in Australia.

Employment Documentation

Every employee in the national workplace relations  scheme must be given a copy of the Fair Work Information  Statement. This document provides information relevant  to employment, including the NES, modern awards,  agreements, the right to association and termination  of employment.

Discrimination

Employees have the right under the Fair Work Act and  various other state and national anti-discrimination  statutes not to be discriminated against due to race, colour,  sex, sexual preference, age, physical or mental disability,  marital status, family or carer’s responsibilities, pregnancy,  religion, political opinion, national extraction and social  origin. Anti-discrimination principles apply from the  time of job application and throughout the employment  relationship.

Issues arising from the employment relationship

Working hours

Employees covered by the national workplace relations  system generally have a standard working week of 38  hours, as provided for by the NES. Employers are not able  to request or require employees to work more than the  standard 38 hours and an employee can refuse to work  extra hours if they are unreasonable. 

As a matter of practice, working hours above 38 hours a  week are often agreed to between employer and employee  as being ‘reasonable’ and overtime may be provided for in  an applicable award or agreement. 

The NES also specifies that carers can request flexible  working hours with their employer if they have been  working for that employer for at least 12 months prior to  the request for flexible hours or, for casual workers, have  a history of employment with the company and expect to  continue in that employment.

Wages

The minimum wages for employees are set out in the  relevant industry award or enterprise agreement. There is  also a national minimum wage (currently AUD 15.96 per  hour or AUD 606.40 per week) for employees not covered by  an award or an agreement, and other minimum wages set  for junior workers, trainees and apprentices.

Casual workers and independent contractors

Casual workers are paid based on the number of hours  they work. Casual work is not guaranteed from week to  week, nor is any notice required for termination. Casual  workers do not accrue holiday or personal leave. Instead,  they receive a casual loading.

Independent contractors work autonomously and are  typically hired for specific tasks. A contractor typically  organises their own hours of work and can work for more  than one organisation at a time. They generally do not  receive any employee benefits from the organisation(s).

Superannuation

Employers are currently required to pay a 9.25%  superannuation contribution in addition to salary or wages  for full-time, part-time and casual employees. An employee  is able to select the fund that the superannuation  contribution is paid into and can also make their own  additional superannuation contributions.

Leave

Under the NES, full-time employees (other than casual  employees) are entitled to four weeks’ paid holiday leave  a year, with a supplementary leave allowance for shift  workers. This leave accrues over the course of the working  year and rolls over from year to year if unused. Unused  holiday entitlements are paid out to the employee on  termination. 

Employees are also entitled to 10 paid personal leave days  a year (which accumulate from year to year), covering  personal illness as well as the need to care for a member  of their immediate family or an emergency. Employees  (including casual employees) are also entitled to take  2 days’ unpaid carers leave on each occasion they are  required to care for an immediate family member.

An employee covered by an award, enterprise agreement or  individual contract may have different leave entitlements  from those provided in the NES provided those  entitlements are in excess of those minimum standards.

Parental leave

Once an employee has worked for their employer for 12  months, they are entitled to 12 months’ unpaid parental  leave upon the birth of a child or adoption. In addition,  certain periods of paid parental leave may be available to  an employee. The employee is also able to return to the  same or an equivalent position once they return from  unpaid parental leave.

The position of casual employees as regards parental leave  depends on their employment history and expected future  continuous employment with their employer, as they are  generally not entitled to leave unless they are a long-term  casual employee.

Trade unions

Membership of a union is voluntary and discrimination of  an employee on the basis of membership of a trade union  is not permitted. All unions are registered with the Fair  Work Commission.

A trade union representative is able to enter Australian  workplaces in certain circumstances, such as investigating  a breach of a workplace-related law, if they represent  workers at that particular workplace and they hold a  current right of entry permit issued by the Fair Work  Commission.

Issues arising from the termination of the employment  relationship

Termination

The termination provisions of the NES provides a minimum  protection for employees which cannot be undermined  in an award or agreement. Under these provisions, an  employer is able to terminate a contract of employment  upon written notice. The amount of notice required is up to  5 weeks depending on length of service with the company.  An award, agreement or individual contract might provide  for alternate notice terms in excess of the minimum  standards and provision for payment in lieu of notice  is permitted. 

There are some situations where no notice is required, such  as for serious misconduct or for a casual employee.

Redundancy

Under the NES, an employee is entitled to redundancy  pay if the employer decides that the position is no longer  required or upon the bankruptcy or insolvency of the  company and the worker has been with the company for at  least 12 months. 

Redundancy entitlements provide employees with up to 16  weeks’ pay, based on their length of service to the company.  A modern award, agreement or individual contract may  provide for an alternative redundancy scheme for an  employee provided it is more beneficial than that provided  for under the NES.

Unfair dismissal

The unfair dismissal provisions of the Fair Work Act apply  to national workplace relations employees. A minimum  period of service applies in order to qualify an employee to  bring an unfair dismissal claim and the employee must not  be a high income earner. 

Under the unfair dismissal scheme, if a dismissal is  harsh, unjust or unreasonable, or is not a case of a  genuine redundancy, the employee is able to challenge  that dismissal in the Fair Work Commission. Specific  considerations apply for a small business. An unfair  dismissal claim must be lodged with the Fair Work  Commission within 21 days of the dismissal. The  Commission has powers of redress such as reinstatement  and payment of compensation to the wronged employee.