Doing business in another country or jurisdiction can present unexpected difficulties and challenges. For foreign businesses looking to expand into Australia, complying with Australia’s industrial relations system can be particularly difficult.
However, ensuring that you meet your employment obligations and that you have sound employment practices in place is essential to the success of your Australian operations.
When does the Fair Work Act 2009 apply to your business or employees?
The Fair Work Act 2009 (FW Act) applies to all companies formed within Australia and all of their employees in Australia, and to the employees of foreign corporations operating in Australia. However, the FW Act can apply to employees working in other countries and in particular:
- employees of foreign businesses whose primary place of work is in Australia but who may work in other countries; and
- employees who are employed by companies who are managed and controlled in Australia but who are located outside of Australia
What are employee’s entitlements under the Fair Work Act 2009?
The FW Act sets out minimum conditions of employment for all employees, called the National Employment Standards (NES). The NES are:
- The maximum weekly hours that an employee can be directed to work
- An employee’s right to request flexible working arrangements;
- An employee’s rights to take parental leave, annual leave, personal leave, compassionate leave, community service leave, and public holidays;
- An employee’s right to be given notice if their employment is terminated; and
- An employee’s right to be paid redundancy pay if their employment is terminated by reason of redundancy.
The FW Act also creates instruments called Modern Awards. Modern Awards set out further minimum conditions of employment, such as minimum wages and additional rates of pay for working evenings, weekends, overtime, and public holidays, for employees employed in specific occupations and industries.
For example, the Banking, Finance and Insurance Award 2010 provides minimum conditions of employment for clerical, technical, and middle-managerial employees in the banking, finance, and insurance industries.
The FW Act also provides additional rights to employees if they are deemed to have been unfairly dismissed or bullied, or if they have been adversely treated because they exercised one of their “workplace rights” under the NES or a Modern Award.
What are the consequences of failing to comply with the Fair Work Act 2009?
Failing to understand or comply with your business’ obligations under the FW Act, the NES or Modern Awards can result in employees bringing legal claims against you seeking damages and, in many instances, financial penalties of up to $54,000 against your business and penalties of up to $10,800 against the individual decision-makers within your business.
For directors may be held personally liable for unpaid employee entitlements if they are found to be liable as accessories to the breach.