Employment relations in Australia are complicated since the application of laws needs to be confirmed with reference to state laws based on the background of Australia adopting a federal system, and even though at a glance the laws may appear to be advantageous to employers, comprehensive understanding is required since there may be various other laws that prescribe the protection of employees.

Furthermore, while due cause for dismissal is not directly required under laws, the Fair Work Act 2009 (Cth) prescribes that employees are protected from unfair or unreasonable dismissal, and it is relatively easy for an employee to contest the validity of one's dismissal, and in effect, it is acknowledged that due cause is required for dismissal.

With regard to the employment of foreigners, while highly skilled engineers, doctors and entrepreneurs are treated warmly in comparison to that of neighboring nations, Australia tends to protect their own citizens.

Key points to consider regarding labor management, characteristics of labor practices, and status of recent labor policy in Australia

Overview of Australia and Australian law

The Commonwealth of Australia is uniquely divided into six states and ten territories. Australia, while being a commonwealth country that generally follows common law traditions similar to the United Kingdom's legal system, has both state, territory (hereafter referred to in this overview as the "state level"), and federal laws and regulations that may both apply in any given area of law, which is also similar to the United States of America's legal system. Employment law and industrial relations are no exception and are governed by both federal and state laws.

Heavier obligations on the employer compared to other Asian countries

Following many years of political reforms at both the federal and state levels, labor law in Australia, compared to other Asian countries such as Japan and Singapore, imposes a significant number of obligations on each employer through legislation, regulations, common law, and industrial instruments, such as modern awards and enterprise agreements. Please see the sections below on the details of such obligations imposed on the employer. Furthermore, trade unions in Australia arguably retain a prominent role and influence in the employer-employee relationship in Australia. Please see Section 2 below for more details.

As such, Australia is arguably more protective of employees than other Asian countries such as Japan. The imposition of various minimum employment standards for each employee, such as the National Employment Standards (as set forth below under Section 2) and the National Minimum Wage (as described below in Section 4), have implications on the overall costs of running a business and being an employer in Australia.

New changes to the Fair Work legislation

Secure Jobs, Better Pay
The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) introduced significant industrial relations reforms to the Fair Work Act. These reforms include the following areas:

  • Workplace sexual harassment
  • Pay secrecy
  • Flexible work
  • Fixed term contracts
  • Unpaid parental leave

Minimum Wage Increase
From 1 July 2023, the National Minimum Wage and award minimum wages were increased.

Closing Loopholes
The Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (Cth) received royal assent on 14 December 2023 and introduced major changes to the Fair Work Act including the following:

  • Labor hire equal pay orders
  • Criminalization of intentional wage underpayments
  • Further protection of employees experiencing family and domestic violence
  • Redundancy pay exceptions
  • New rights of workplace delegates

The second tranche of amendments under the Fair Work Legislation Amendment (Closing Loopholes) Bill is currently discussed, which includes the following:

  • Significant increase in maximum penalties for a breach
  • New definition of casual employees
  • New definition of an independent contractor relationship
  • Advisory minimum standards and unfair termination regime for gig workers and road transport contractors
  • Fair Work Commission’s power to determine model terms for enterprise agreements
  • Franchisee’s collective bargaining power
  • New restrictions for employers covered by a multi-employer agreement to make a single-enterprise agreement

Protecting Worker Entitlements
On 22 June 2023, the Fair Work Legislation Amendment (Protecting Worker Entitlements) Act 2023 (Cth) was passed to introduce further protections of employees’ entitlements under the Fair Work Act including the following:

  • Restrictions on employee pay deductions
  • Superannuation as a National Employment Standard
  • Flexible unpaid parental leave
  • Fair Work Commission’s power to replace enterprise agreements
  • Migrant workers’ rights and entitlements under workplace laws

Please refer to section 6 for further information concerning these changes.

Overview of basic labor laws in Australia

Overview of the Fair Work Act 2009

The federal legislation, the Fair Work Act 2009 (Cth) (the "Fair Work Act"), is the main statute with respect to employment law in Australia and applies to most employers in Australia. Failure to comply with the Fair Work Act may attract stiff penalties and/or fines.

In addition to the Fair Work Act, there are other state and federal legislation that regulates other issues that may arise during the course of an employment relationship in Australia. Examples of such legislation include anti-discrimination, compulsory workers compensation insurance, superannuation, and work health and safety legislation. We will cover the general law associated with these topics below, but the main focus of this overview will be on the Fair Work Act.

Overview of National Employment Standards, Modern Awards, and Enterprise Agreements

The Fair Work Act sets a comprehensive standard with respect to minimum conditions of employment that all employers must provide to all employees in Australia with exceptions for public sector employees. The Fair Work Act sets only the minimum standard; therefore, for employing executives, a company is required to consider the effect of both the Fair Work Act and the Corporation Act 2001 (Cth) and to clarify the relationship between the company and the executives in the Executive Agreement, so as to prevent any disputes or misconduct. These minimum conditions set forth in the Fair Work Act are generally covered by the following:

  1. National Employment Standards (NES);
  2. Modern Awards; and
  3. Enterprise Agreements and Registered Agreements
  4. (Note: See details below.)

National Employment Standards1

National Employment Standards prescribe 12 minimum employment entitlements in order to ensure the minimum wages and working conditions are fair to all workers. The details are set forth below.

Modern Awards

Modern Awards are legally binding instruments that operate with the force of legislation and prescribe additional minimum terms and conditions of employment for particular industries and occupations. Employers in the industries and occupations to which awards apply must comply with the terms of the applicable awards in addition to the National Employment Standards. Currently, there are more than 110 industry or occupation awards that cover most people who are employed in Australia.

Enterprise Agreements

An enterprise agreement is a collectively bargained agreement between an employer and a group of employees (or their representative) in a particular class or category to create an agreement that provides for terms and conditions, in addition to the minimum terms and conditions of employment. For example, the enterprise agreement may apply to all employees of a company or groups of employees based on a particular trade classification or based on a certain geographical area.

Registered Agreements

A registered agreement is an agreement that is registered with Australia's national workplace relations tribunal, the Fair Work Commission; the provisions of this agreement may be included in an enterprise agreement, or this may be an agreement with respect to other types of collective agreements.

National Employment Standards

The 12 minimum employment entitlements covered by the National Employment Standards are set forth in the table below, and they must be followed with respect to all employees (with some exceptions for casual employees). These entitlements also apply in cases where there may be other agreement, awards, or enterprise agreements in place.

Summary of entitlement
Maximum hours of work
38 hours per week, plus reasonable extra hours. Please see Section 4 for the considerations in respect of reasonable extra hours as prescribed by the legislation.
Public holidays
Employees are entitled to a paid day off on each public holiday, unless the employer reasonably requires the employee to work. There are eight public holidays listed under the Fair Work Act are as follows: and the number of public holiday will also depend on the public holidays set by each state and territory.
The eight public holidays listed under the Fair Work Act are:
  • New Year’s Day (1 January 2024)
  • Australian Day (26 January 2024)
  • Good Friday (29 March 2024)
  • Easter Monday (1 April 2024)
  • Anzac Day (25 April 2024)
  • Monarch’s Official Birthday (10 June 2024)
  • Christmas Day (25 December 2024)
  • Boxing Day (26 December 2024)
Annual leave
Full time employee are entitled to 4 weeks paid leave per year. Some shift workers are entitled to 5 weeks paid leave per year.
Casual workers are excluded from both entitlements.
These leaves can only be taken for a period agreed between the employee and the employer, and the employer should not unreasonably refuse to agree to the employee's request of annual paid leave.
Flexible working arrangements
Certain employees have a legal right to request flexible working arrangements, for example if, among others, they have worked with the same employer for at least 12 months and they are the parent, or have responsibility for the care, of a child who is school aged or younger, have a disability or are 55 years or older.
Parental leave
Up to 12 months unpaid leave in addition to a right to request for additional 12 months unpaid leave for an employee who has completed at least 12 months of continuous service with the employer.
Long service leave
Paid long service leave for long-serving employees. The qualification and the duration of leave is governed by the legislation of each state and territory,
Personal/carer's leave and compassionate leave
This leave can only be taken if the employee is not fit to work because of personal illness or injury or having to provide care for an immediate family in the employee's household that suffers the aforementioned. Up to 10 days paid personal/carer's leave per year (not applicable to casuals) and two further days of unpaid carer's leave as needed.
Two days compassionate leave as needed (which is unpaid for casual workers) if a member of their immediate family or household, dies, sustain a personal injury, or contracted personal illness that is a serious threat to his/her life.
Community service leave
Unpaid leave for voluntary emergency activities and leave for jury service.
Notice of termination of employment, notice period and redundancy pay for eligible employees based on age and/or length of service
Fair Work Information Statement
This document must be provided to all new employees before or as soon as practicable after the employee starts employment. Please see below for more information.
Convert from Casual to Permanent Employment
Casual conversion provides casual employees with a pathway to becoming permanent employees. Only casual employees who have worked for an employer for 12 months or more must be offered the option to convert to full-time or part-time (permanent) employees. This requirement does not apply to small business employers (15 of fewer employees) but a written response stating reasonable grounds for the refusal must be provided. Employers (excluding small business employers) must make a written offer to convert the casual employee within 21 days after the employee's 12-month anniversary if the employee has worked for the employer for 12 months and worked on a regular/ongoing basis for the last six months, and could continue working the hours in question on a full-time or part-time basis.
Employers must pay superannuation contributions for eligible employees under the superannuation guarantee laws.

In March, 2021, the Fair Work Act 2009 (Cth) was amended to define what constitutes casual employment. “Casual employee” is someone who accepts an offer of employment made by the employer on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work. In determining whether an employee meets the criteria, only a set of considerations must be made, such as whether the employer can elect to offer work, whether the person can elect to accept or reject work, and whether the employment is described as casual employment. Currently the Fair Work Legislation Amendment (Closing Loopholes No. 2) Bill 2023 is being discussed in Parliament, and if made into law, the definition of a casual employee may change to include the actual employment relationship as well as what is written in a contract.

Casual employees do not have a right to annual leave, and employers can terminate the employment without notice. Casual workers are only entitled to two days unpaid caregiver's leave, two days unpaid compassionate leave (per occasion), ten days paid family and domestic violence leave, unpaid community service leave and casual to permanent employment conversion (see the Fair Work Information Statement of the above National Employment Standards and the Casual Employee Information Statement that outlines casual conversion requirements). Casual conversion requirements are casual employees’ rights (and the employers’ obligations) that have been introduced by the above amendments to the Fair Work Act 2009 (Cth), whereby a casual employee who has worked for an employer for at least 12 months and has, during the last 6 months of that time, worked a regular pattern of hours on an ongoing basis may be entitled to be offered, or request, conversion to full-time employment or part-time employment. Small businesses with less than 15 employees may be exempted from the casual conversion requirements.

Occupational Health and Safety

All employers must take all reasonably practicable steps to ensure that workplaces are safe and without risk to the health of the employees at the workplace. These obligations are enforced strictly at the state level, which may include criminal prosecution for employers who have not complied with the necessary state or territory legislation and regulations, and the penalties may even include imprisonment for individuals found to be in breach of the law.

In addition, the relevant state laws that govern workplace health and safety may require employers to provide information necessary to protect all persons from risks to health and safety arising from work carried out as part of the conduct of the business. For example, in the state of New South Wales, pursuant to the Work Health and Safety Act 2011 (NSW), businesses that design, manufacture, import, supply, or install plant, substances, or structures shall, among others, provide adequate information to each person who are at or in the vicinity of a workplace and whose health or safety may be affected by the aforementioned activities.

It is highly critical for employers to comply with the relevant legislation and regulations of each state and territory as the consequences for noncompliance are severe and are not limited to just profitability or reputational losses.

Workers Compensation

If an employee suffers an injury in the course of employment, the person may be able to claim regular or lump-sum payments from the workers' compensation scheme set up by each Australian state or the Commonwealth Government. Currently, there are 11 workers' compensation schemes in Australia (three Commonwealth and eight state/territory) and pursuant to the legislation of each state and territory, it is generally mandatory for all employers to have a workers' compensation insurance policy.

Protections against adverse action

The employer must not take an adverse action against an employee because the employee has exercised a workplace right or a third party has exercised a workplace right for the benefit of the employee.

Pursuant to the Fair Work Act, an adverse action extends beyond dismissal, and examples include inuring the employee in employment and altering the employee's position to the employee's prejudice or discriminating against the employee in question. The Fair Work Act also specifies a series of activities that are considered the workplace rights, and such a workplace right arises when, among others, a person is

  • entitled to the benefit of a workplace law;
  • able to initiate or participate in a proceeding under a workplace law; or
  • able to make a complaint or inquiry to a regulator with respect to the employee's employment.

Protection against discrimination

Australian legislation protects an employer taking adverse actions (as described above) against an employee on the basis of a protected attribute. Examples of protected attribute include the following:

  • Age
  • Gender
  • Race
  • Color
  • Sexual orientation
  • Marital status
  • Pregnancy
  • Family or caregiver's responsibilities
  • Religion
  • Social origin
  • National extraction
  • Physical or mental disability
  • Political opinion

Recent amendments to the Fair Work Act taking effect in December 2022, aligned the Act with other commonwealth anti-discrimination legislation. Specifically, protections were added concerning breast feeding, gender identity, and intersex status, as well as clarifications to achieving equality in the workplace.

There is specific legislation at the federal, state levels with respect to generally ensuring antidiscrimination and equal opportunities that the prudent employer should be aware of and comply with. These include the following:

  • The Racial Discrimination Act 1975 (Cth)
  • The Sex Discrimination Act 1984 (Cth)
  • The Australian Human Rights Commission Act 1986 (Cth)
  • The Disability Discrimination Act 1992 (Cth)
  • The Age Discrimination Act 2004 (Cth)

In December 2022, the Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Act 2022 (Cth) took effect, implementing changes to the Sex Discrimination Act 1984 (Cth), Australian Human Rights Commission Act 1986 (Cth), Workplace Gender Equality Act 2012 (Cth), Age Discrimination Act 2004 (Cth), Inspector General of Intelligence and Security Act 1986 (Cth), Disability Discrimination Act 1992 (Cth), and Racial Discrimination Act 1975 (Cth).

The amendments introduced new orders primarily for the purposes of stopping discrimination, upholding human rights and gender equality. Some of the key provisions and changes include the following:

Positive Duty Obligation for Employers to Prevent Sexual Harassment in the Workplace – Sex Discrimination Act 1984 (Cth) (SD Act)

The SD Act has a new Positive Duty requirement, whereby all employers or business owners must implement reasonable and proportionate measures to eliminate unlawful sexual harassment and discrimination in the workplace. To determinate what constitutes reasonable and proportionate measures, the nature, size, and resources of the respective business must be examined in light of the cost and practicability of eliminating such conduct.

The Australian Human Rights Commission – Australian Human Rights Commission Act 1986 (Cth) (AHRC Act)

The amendments to the AHRD Act were introduced to empower the Australian Human Rights Commission to enforce Positive Duty obligations (outline above).

Measures to Counteract Hostile Working Environments – Sex Discrimination Act 1984 (Cth) (SD Act)

The SD Act was amended to prohibit conduct that subjects another person to a sexually hostile working environment. Importantly, the reasonable person test is applied to determine whether, having regard to all the circumstances, it could be inferred that a workplace is intimidating, humiliating, or offensive. When assessing the conduct, the seriousness and repetitiveness of the conduct and the role and influence of the offending party need to be examined,

Legal Proceedings – Australian Human Rights Commission Act 1986 (Cth) (AHRC Act)

The amendments concerning the AHRC Act now allows representative bodies to make representative applications in the Federal Courts on behalf of an individual. Furthermore, the president of the AHRC now only has the authority to terminate complaints which took place over 24 months ago.

Protection against bullying and harassment

Australian legislation also protects an employee from bullying in the work environment. According to the Fair Work Act, bullying is defined as repeated and unreasonable acts directed toward a person or group of people at work and pose a risk to health and safety. This definition includes moral or physical harassment in the workplace. An exception to this is reasonable management action carried out in a reasonable manner, such as when a supervisor takes reasonable disciplinary action for a person's misconduct.

In Australia, the Fair Work Commission facilitates the Workplace Advice Service where eligible people and employers can access free legal assistance about anti-bullying and other employment-related matters. Furthermore, the Fair Work Commission is given the authority to conduct the arbitration or hearing process without going to court. The Fair Work Commission will decide the best way to handle complaints; however, it cannot order a pecuniary penalty.

Unions' influences

According to the Australian Bureau of Statistics (ABS), the rate of union membership has been continuously decreasing in Australia, whereby since 1992, the proportion of employees who were in trade unions has fallen from 41% to 12.5%.2 Despite the rate of union membership, trade unions arguably still carry a fairly influential role with the employer, particularly for matters concerning union members. The following are some examples of the influences that a trade union has in an Australian workplace:

Representation to negotiate

Employees who are members of a trade union can have union representatives represent and assist them in enterprise agreement negotiations.

Support person

At a disciplinary hearing, an employee is entitled to have a support person to assist in the discussion, and the employee can elect a union representative for such a role. Pursuant to Section 387(d) of the Fair Work Act, any dismissal involving any unreasonable refusal by the employer to allow a support person at a dismissal discussion will result in unfair dismissal.

Political influence

The Australian Workers Union is affiliated with the Australian Labor Party, which had been in opposition at the federal level since 2013 until it has become the ruling party at the 2022 Australian federal election.

Modern Slavery Act

In 2015, the Parliament of the United Kingdom enacted the Modern Slavery Act 2015 ("UK Act") to combat modern slavery in the UK. Modern slavery refers to any situation where a worker cannot refuse or leave work because of threats, violence, coercion, abuse of power, or deception. Under the UK Act, a business entity shall, in order to identify and eradicate any act of slavery as described above, submit an annual statement related to the risk of modern slavery in its operations and supply chain to the government. The Australian Parliament followed the step to enact the Modern Slavery Act 2018 (Cth) ("AU Act"), and under the AU Act, all Australian entities or other entities carrying on business in Australia with the minimum annual consolidated revenue of AUD 100 million shall be obligated to submit such report. Notably, the AU Act does not impose penalties for not submitting the report; however, the government may publicize those who do not comply with the AU Act, which can be a reputational risk to companies. The Parliament of NSW once introduced a state level Modern Slavery Act 2018 (NSW) (“NSW Act”), which imposed a similar reporting obligation with the lower threshold of AUD 50 million annual turnover and penalties up to AUD 1.1 million for noncompliance. After the Parliamentary review, the NSW government passed the Modern Slavery Amendment Act 2021 (NSW) and withdrew the reporting obligation altogether. Businesses are now only subject to one reporting obligation under the AU Act.

Duty to create Workplace Policies and Procedures in Australia

Fair Work Information Statement

In contrast to Japan, there are no express requirements contained in the Fair Work Act for Australian employers to create workplace policies and procedures and register such policies and procedures with any relevant authority.

However, all employers are required to provide a Fair Work Information Statement to new employees as part of the National Employment Standards. A Fair Work Information Statement must be provided to all new employees before or as soon as practicable after the employee starts working. It must contain the information required under the Fair Work Act, which includes the following:

  • National Employment Standards (NES)
  • Modern awards
  • Agreement making under the Fair Work Act
  • Right to freedom of association
  • Role of Fair Work Commission and Ombudsman
  • Termination of employment
  • Individual flexibility arrangement
  • Right of entry, including the protection of personal information by privacy law


Under the Fair Work Act and Fair Work Regulations 2009 (Cth), employers are also obliged to keep detailed records for each employee for seven years with respect to the following records:

Type of record
Required information
  • Employee's and employer's name
  • Whether the employee's employment is full time or part time
  • Whether the employee's employment is permanent, temporary or casual
  • Date of the employee's commencement date
  • Australian Business Number of the employer (if any)
  • Pay rate paid to the employee
  • Gross and net amounts paid
  • Details of any incentive-based payment, bonus, loading, penalty rate, or other monetary allowance or separately identifiable entitlement paid
  • Deductions from the gross amount
The pays of all employees need to be documented with pay slips, which can be issued electronically or in hard copy and need to be issued to each employee within one working day of the employee being paid.
Hours of work
  • The number of overtime hours worked and when the overtime started and finished in respect of any penalty rates or loadings paid for overtime worked
  • Hours of employee work, for casual employees or part-time employees paid based on time worked
  • Copy of written agreement if employer and employee agreed to average the employee's work hours
  • Any leave taken
  • Amount of leave an employee has
  • If employee can cash out an amount of leave:
    o Copy of agreement to cash out amount of leave
    o Amount paid, amount of leave cashed out, and payment date
  • If an employer agrees for an employee to take annual leaves in advance under an award, the employer has to keep a copy of the agreement, which has to state the amount of leave taken and the day the leave starts.
Superannuation contributions
  • Amount paid
  • Pay period
  • Payment date
  • Name of super fund
  • Reason for employer paying into super fund (for example, a record of the employee's super fund choice and the date they made that choice)
Superannuation contributions are not required to be recorded if the employer pays a defined benefit interest in a defined benefit fund.
Individual flexibility agreement under award or a registered agreement (if applicable)
  • Copy of written agreement
  • Copy of notice/agreement in terminating the flexible agreement
Guarantee of annual earnings
  • The guarantee
  • Date the guarantee was cancelled (if applicable)
End of Employment
  • Manner of termination (specifying details)
  • How much notice was provided, if any
  • Name of person who terminated the employment

In addition to the above, minor/child employment records must also be maintained (if applicable) under certain state and territory legislation.

The above records must also be kept in the required form pursuant to legislation and must be

  • kept in the English Language,
  • kept in legible form,
  • kept in manner that is readily accessible to inspection by a Fair Work Inspector, and
  • kept for seven years.

An employer must adhere to the privacy requirements under the Privacy Act 1988 (Cth) when maintaining the above records, which are elaborated below.

A breach of the regulations with respect to the above records may result in the Fair Work Inspectors imposing a fine or the employer being taken to the courts if such employer's failure to meet the regulation's requirements is serious, willful, or repetitive. Currently, the maximum penalty for a serious contravention is AUD 187,800 for individuals and AUD 939,000 for corporations.

Privacy protection requirements

Under the Privacy Act 1988 (Cth), an Australia employer must comply with 13 Australian Privacy Principles if it is an APP Entity, meaning a governmental agency or an individual or private organization (for example, body corporate, partnership, or trust) that is not a small business operator (i.e. an annual turnover is more than AUD 3 million) or registered political party. APP Entities and their related body corporates must not breach the Australian Privacy Principles (as set forth in detail in the Privacy Act 1988 (Cth)), which include obligations on the relevant employer to, among others, obtain appropriate consent and take reasonable steps in protecting their information from misuse, interference, loss, and unauthorized access, modification, and disclosure. Though the handling of employee records is generally exempted from complying with the Privacy Act 1988 (Cth), the applicability of the exemption is limited depending on the type of information, purposes for which it is handled and type of workers (e.g., employees, contract workers, and labor hires). The records can generally be only accessed by the employer, payroll staff, employee, and authorized individuals. An employer must make the records available if an employee or a Fair Work inspector requests to see the relevant records.

After keeping the employment records for seven years after termination of employment and the employer is no longer required to retain the records under any other Australia law or a court/tribunal order to retain the information, the employer must, as soon as practicable but only if it is lawful and reasonable to do so, destroy the information or ensure the information is de-identified.

Furthermore, an APP Entity is obligated to report actual or suspected information leaks or loss to the Office of the Australian Information Commissioner (OAIC) when the leak or loss is likely to result in serious harm to an individual whose personal information is involved.

Following the introduction of the recent Privacy Legislation Amendment (Enforcement and Other Measures) Act 2022 (Cth), failure to comply with the Act exposes the breaching entity to a civil penalty up to AUD 50 million, three times the benefit of a contravention, or (where the benefit can’t be determined) 30% of domestic turnover. New changes also include broader powers for OAIC to investigate, liaise with other regulators and review privacy compliance, as well as powers to issue infringement notices for failure to provide information when mandated.

Additionally, as a result of the amendment, Australian privacy laws shall be extended to apply to organizations doing business in Australia, regardless of whether the personal information is collected in Australia.

Overview of the wage system (bonuses, retirement benefits, and overtime pay) in Australia


An employee in Australia is entitled to the minimum wage, which is set by the applicable modern award (as explained above in Section 2) or registered agreement (as explained above in Section 2). An employee's minimum wage can depend on numerous factors, for example age, type of employment (whether full time, part-time, casual, fixed term), hours and times of work, job classification, duties, qualifications, and level of responsibility. In addition, if the employee's employment comes under an award, the wages in a registered agreement cannot be less than the base wages in an award, and if there is no applicable award, the wages in a registered agreement cannot be less than the national minimum wage. Please note that this is only in relation to the base wages. The applicable penalties, loadings, and allowances with respect to the employee will be pursuant to the registered agreement.

If no award or registered agreement applies to an employee, the employee is entitled to be paid at least the national minimum wage, which is reviewed by the Fair Work Commission every year and can result in an increase to the minimum wage. If there is any increase, it is also applied to award wages and any changes to the wages usually commence from the first pay period on or after July 1 each year.

The Fair Work Act prohibits employers from deducting money from the pay of employees without their written authorization, unless otherwise agreed by the employee and permitted by law. Employees must be paid at least monthly and may be paid weekly and fortnightly.


The Australian superannuation system is designed to ensure that an employee manages to save sufficient money in a fund over the working life to deliver a private income during retirement.

All employers are required to pay superannuation for all employees with the exception of certain relevant casual employees in accordance with the prevailing rates as set forth by the superannuation legislation.

The current minimum rate of superannuation required to be paid by employers into a superannuation fund is 11% (the percentage of the period between July 1, 2023 and June 30, 2024) of the employee’s income with respect to all relevant employees who are over 18 years old or under 18 years old and work over 30 hours a week.3 Prior to 1 July 2022, there was a threshold removing the need for employers to pay superannuation to employees earning less than AUD $450 per month, which has since been abolished.4

Overtime payment

While the National Employment Standards sets that the maximum ordinary hours of work are 38 hours per week, if the employer requests reasonable overtime, the employee will generally be required to comply. There is no mathematical formula prescribed with respect to the calculation of overtime, but the following will be taken into account to determine if the additional hours are considered reasonable:

  • Any risk to an employee's health and safety from working the additional hours
  • The employee's personal circumstances, including family responsibilities
  • The needs of the workplace or enterprise in which the employee is employed
  • Whether the employee is entitled to receive overtime payments, penalty rates, or other compensation or a level of remuneration that reflects an expectation of working additional hours
  • Any notice given by the employer of any request or requirement to work the additional hours
  • Any notice given by the employee of the intention to refuse to work the additional hours
  • The usual patterns of work in the industry or the part of an industry in which the employee works
  • The nature of the employee's role and the employee's level of responsibility
  • Whether the additional hours are in accordance with averaging terms included in a modern award or enterprise agreement that applies to the employee or with an averaging arrangement agreed to by the employer and employee
  • Any other relevant matter

Overtime entitlements and requirements are generally stipulated by the employment agreement, any applicable modern award, or registered agreement, and in some industries, relevant laws and legislation; they will also depend on other factors with respect to an employee, such as position and types of employment (part time, full time, etc.). Employees can also receive time off in lieu as compensation for overtime.5

Methods and points to consider regarding dismissal in Australia


Termination of employment can occur and be executed in a number of ways, including through an exercise of contractual or statutory right of termination, by agreement, or through the operation of law.

Notice Requirements

There are minimum periods of notice at termination set forth in the National Employment Standards. Employees are entitled to notice of termination or payment in lieu of notice. However, the length of notice required for an employee will depend on the duration of the employee's period of continuous service and age. The below is a summary of the required relevant minimum prescribed notice period for termination; however, it is still prudent to check the specific award or registered agreement for any specific notice periods.

Employees who are also over 45 years old and have worked for at least two years for the same employer are entitled to an additional week of notice in addition to the minimum prescribed notice period stated below:

Notice Period
Relevant length of continuous service
1 week
Not more than 1 year
2 weeks
More than 1 year, but not more than 3 years.
3 weeks
More than 3 years, but not more than 5 years
4 weeks
More than 5 years

However, the employment agreements may stipulate a longer period of termination notice, especially in particular for senior employees or executives, which may range from at least one to three months.

The reciprocal treatment is expected for employers: employees are typically required to provide the same minimum or agreed period of notice to their employer when the employee is terminating the employment agreement.

Termination by employer - summary dismissal

If an employee is summarily dismissed for serious misconduct, the minimum period of notice will not apply. Examples of where the courts have found such serious misconduct to have occurred include (among other examples) the following:

  • Falsifying a medical certificate
  • Failing a drug test
  • Assaulting a colleague

The Fair Work Regulations 2009 (Cth) provides the following as examples of serious misconduct:

  • Theft
  • Fraud
  • Assault
  • Employee is intoxicated at work
  • Employee refuses a lawful and reasonable instruction consistent with the contract of employment

Termination payments

An employee may receive a termination payment as part of their final pay at the time of termination. Examples of such termination payment include any accrued outstanding wages for work performed, any accumulated annual leave that was not taken, and if applicable, any annual leave loading, accrued, or pro-rata long service leave or redundancy pay. In addition to these, an employee may be eligible for other contractual entitlements on termination.


If an employee is made redundant by the employer due to the employer not needing the employee's job to be done by anyone or the employer becoming insolvent or bankrupt, the employee will be entitled to redundancy pay (also known as severance pay) and a notice period. The Fair Work Act considers that a job to be genuine redundancy if

  • the job is no longer required to be performed by anyone due to changes in operational requirements in the employer's enterprise, and
  • the employer complied with any applicable consultation obligations in modern award or enterprise agreement with the employees regarding the redundancy.

As per the guidance provided by the Fair Works Ombudsman, the consultation requirements for an employer making a job redundant are to

  • notify the employee who may be affected by the proposed changes,
  • provide employees information about these changes and expected effects,
  • discuss with the employees to avoid and minimize negative effects on them, and
  • consider employees ideas or suggestions on the changes proposed.

If a redundancy is found not to be genuine, the employee could potentially claim unfair dismissal. However, if there is a basis for a genuine redundancy, the retrenched employee is entitled to retrenchment benefits, such as redundancy pay.

Pursuant to the Fair Work Act, the entitlement to redundancy pay is calculated based on a sliding scale and by reference to the length of the employee's continuous service prior to the redundancy and the applicable award or registered agreement.

The table below sets out the redundancy pay period for their respective years of continuous service:

Employee's period of continuous service
with the employer on termination
Pay Period
At least 1 year but less than 2 years
4 weeks
At least 2 years but less than 3 years
6 weeks
At least 3 years but less than 4 years
7 weeks
At least 4 years but less than 5 years
8 weeks
At least 5 years but less than 6 years
10 weeks
At least 6 years but less than 7 years
11 weeks
At least 7 years but less than 8 years
13 weeks
At least 8 years but less than 9 years
14 weeks
At least 9 years but less than 10 years
16 weeks
At least 10 years
12 weeks

However, please note that employers are not required to pay redundancy pay to employees who

  • were employed for a specific task, project, time period, or season;
  • were casual employees;
  • were trainees and apprentices engaged only for the length of their training agreement;
  • were employees of a business with fewer than 15 employees;
  • were terminated because of serious misconduct;
  • have worked for fewer than 12 months; or
  • the modern award document (which sets out pay and condition of employment) expressly excludes the applicability of redundancy pay.

The employer can apply to the Fair Works Commission to reduce the amount of redundancy pay.

Unfair Dismissal

Under the Fair Work Act, an employee is dismissed if the employment has been terminated on the employer's initiative or if the employee resigned but was forced to do so because of the employer's conduct.

An employee may make unfair dismissal claims if their dismissal was harsh, unjust, or unreasonable. Reinstatement or compensation are potentially amongst the orders that an employer may receive if unfair dismissal is established by the employee. Each Australian small business employer, who employs fewer than 15 employees at one time, is also subject to the Small Business Fair Dismissal Code formulated under the Fair Work Act. Pursuant to the Small Business Fair Dismissal Code, employees of such a small business employer may claim unfair dismissal only after they have completed 12 months of service with the employer before being dismissed. If the small business employer had complied with the Small Business Fair Dismissal Code, it will assist in protecting the business against such an unfair dismissal claim from the employee.

New changes to the Fair Work legislation

Secure Jobs, Better Pay
The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) (Secure Job, Better Pay Act) introduced significant industrial relations reforms to the Fair Work Act. These reforms include the following:

  • Workplace Sexual Harassment
    Workplace sexual harassment is specifically prohibited under the Fair Work Act from 6 March 2023. The protection under the Fair Work Act applies to sexual harassment in connection with work and applies to
    • workers, including employees, contractors, work experience students, and volunteers;
    • future workers; and
    • people conducting a business or undertaking.
    The protection applies unless the employer can prove that it took all reasonable steps to prevent the sexual harassment. The amendments also gave the Fair Work Commission greater powers to deal with workplace sexual harassment.
  • Pay Secrecy
    The Secure Job, Better Pay Act introduced new workplace rights to share information about pay among employees and a prohibition against a pay secrecy provision in employment contracts. These new rights and prohibition commenced on 7 June 2023, except for existing contracts entered before 7 December 2022 that have pay secrecy provisions. If the existing contracts are changed or renewed after 7 December 2022, the employers are prohibited from taking adverse action against the employees for sharing pay information among themselves, and they are also prohibited from including a pay secrecy provision in contracts with employees.
  • Flexible Work
    On 6 June 2023, the right to request flexible working arrangements commenced application to
    • employees, or a member of their immediate family or household, experiencing family and domestic violence; and
    • employees who are pregnant.
    Employers are prohibited from refusing a request from an employee for a flexible working arrangement unless the employer fulfils certain obligations, such as to discuss the request with the employee and make a genuine effort to find alternative arrangements to accommodate the employee’s circumstances.
  • Fixed-Term Contracts
    From 6 December 2023, new rules apply when hiring people on fixed-term contracts, including a requirement to give prospective fixed-term employees a copy of the Fixed-Term Contract Information Statement and a prohibition against engaging a fixed-term employee for longer than two years, including any extensions or renewals. There are certain protections for employees on fixed-term contracts, such as a prohibition against employing someone else to do the same or substantially similar work instead. These provisions ensure that employees are hired as permanent employees where appropriate.
  • Unpaid Parental Leave
    From 6 June 2023, new rules apply to employers responding to requests for extending unpaid parental leave, including the timeframe and forms of responses.

Minimum Wage Increase
From 1 July 2023, the National Minimum Wage and award minimum wages were increased as shown below:

  • The National Minimum Wage increased to $882.80 per week or $23.23 per hour, and
  • award minimum wages increased by 5.75%.

Closing Loopholes
The Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (Cth) received royal assent on 14 December 2023 and introduced major changes to the Fair Work Act including the following:

  • From 15 December 2023, orders may be sought against a labor hire employer to pay their employees supplied to a host employer at least the same rate of pay as they would receive under the host employer’s enterprise agreement, or other kind of workplace instrument.
  • Intentional wage underpayments are criminalized with significantly increased penalties from 1 January 2025.
  • From 15 December 2023, it is unlawful for an employer to take adverse action against employees experiencing family and domestic violence.
  • From 15 December 2023, the small business exception to the obligation to pay redundancy payments no longer applies to non-small employers that become a small business employer by downsizing leading up to the redundancy.
  • From 15 December 2023, workplace delegates of a union or an employee organization are entitled to new rights and protections, including reasonable access to the workplace to represent the organization’s industrial interests and to paid time for workplace delegate training.

The second tranche of amendments under the Fair Work Legislation Amendment (Closing Loopholes) Bill is currently discussed, which includes the following:

  • Significant increase in maximum penalties for a breach
  • New definition of casual employees
  • New definition of an independent contractor relationship
  • Advisory minimum standards and unfair termination regime for gig workers and road transport contractors
  • Fair Work Commission’s power to determine model terms for enterprise agreements
  • Franchisee’s collective bargaining power
  • New restrictions for employers covered by a multi-employer agreement to make a single-enterprise agreement

The details of these amendments are currently being discussed in Parliament.

Protecting Worker Entitlements
On 22 June 2023, the Fair Work Legislation Amendment (Protecting Worker Entitlements) Act 2023 was passed to introduce further protections of employees’ entitlements under the Fair Work Act, including the following:

  • From 30 December 2023, employers can only make deductions from pay with employees’ permission in writing where the deductions are mainly for the employee’s benefit. Specific record-keeping obligations also apply.
  • From 1 January 2024, the National Employment Standards includes a right to superannuation contributions. This means that employees may take action against employers under the Fair Work Act for unpaid or underpaid superannuation.
  • From 1 July 2023, unpaid parental leave can be taken more flexibly, including an entitlement to taking up to 100 days of the 12 months leave flexibly during the 24 months period after the birth of the child.
  • From 1 July 2023, in certain circumstances, the Fair Work Commission can make a workplace determination that sets terms and conditions of employment which replace an enterprise agreement.
  • From 1 July 2023, the Fair Work Act clarifies that migrant workers have the same rights and entitlements under workplace laws as other employees regardless of the migration status under the Migration Act 1958 (Cth) including any breach of the Act.

Types of foreign national visas and acquisition requirements


There are many types of visas applicable to foreign workers and some of these include, but are not limited to, the following:

Visa options for employers to sponsor overseas workers to work in Australia
Type of visa
Description of visa
Temporary Skill Shortage (subclass 482)
This visa allows Australian employers to sponsor workers for a temporary visa lasting from two years to four years.
Employer Nomination Scheme
This visa is a permanent visa, and is only for the employers who are operating in Australia.
Regional Sponsored Skilled Migration Scheme
This visa is in respect of a position in a regional area of Australia that is approved by a Regional Certifying Body.
Global Talent Employer Sponsored Program
This visa allows employers to sponsor workers for highly skilled niche positions that cannot be filled by Australian workers and through other standard visa programs such as the Temporary Skill Shortage visa.
Temporary Work (Short Stay Specialist) Subclass 400 Visas
This visa is in respect of highly specialized work (for example, skills relating to overseas technology or where the required skill set is in limited supply in Australia) which are not ongoing in nature, or work that is in Australia's interest (for example, impact on Australia's diplomatic, trade or business interests), and the visa lasts only about a short period of about a few months.
Training Subclass 407 Visas
This visa is for occupational trainees or as part of a professional development program, and is generally valid for about 2 years.
Temporary Activity Subclass 408 Visas
This visa is in respect of a foreign worker as an invited participant for an event or sport-related activities, as a religious worker, as a domestic worker, for research activities with an Australian educational institution, for entertainment related activities, or as part of a special program, and generally valid for about 2 years.

In addition to the above visas, there are also visas tailored to professionals, tradespersons, or other skilled workers who may qualify for skill migration to Australia that may be applied by the worker on their own and/or after nomination by an Australian state or territory government. There are also visas with respect to business owners who are looking to establish a business in Australia, purchase a business in Australia, or are migrating to Australia as a business owner or investor. While these visas will not be the focus of this overview, the details of such visas (and respect to other visas, including family and spousal visas) can be found at the website of the Australian Government Department of Home Affairs.6 We note that the Australian government makes periodic, if not regular, amendments to the visa schemes for foreign workers and skilled migration.

In April 2017, the Australian government implemented a major amendment to this work visa, and the 457 visa, which was generally regarded as the most versatile for Japanese companies, was completely abolished and replaced with a new working visa (Temporary Skill Shortage visa). This law amendment will be described in detail below.

Abolition of the 457 visa and commencement of a new Temporary Skill Shortage visa (TSS visa)

Prior to its abolition in April 2017, most employers applied for 457 visas for employees as standard business sponsors if the relevant employer met various sponsorship obligations and trading benchmarks. This was also the most common for Japanese corporations in Australia.

As mentioned above, in accordance with the major reforms, the Australian government abolished the 457 visa and replaced it with a new Temporary Skill Shortage visa (subclass 482) (“TSS visa”), which was introduced on 19 March 2019 in a move to prioritize the interests of Australian domestic workers.

Temporary Skill Shortage Visa (subclass 482).

There are mainly two categories of TSS visa, namely (1) a short-term stream of the maximum length of two years (or four years if international trade obligations apply), and (2) a medium-term stream of the maximum length of four years.

As similarly to the subclass 475 visa, before applying for this visa, the employer must be at least a standard business sponsor approved by the Department of Home Affairs. Furthermore, the occupation the employer nominates must be on the Short-Term Skilled Occupation List (STSOL) or the Medium and Long-Term Strategic Skilled List (MLTSSL). Currently, there are more than 200 occupations listed on the short-term stream and nearly 300 occupations on the medium-term stream, with the chief executive or managing director and corporate general manager being listed for the medium-term stream.

The qualified applicant must also be paid a base salary of at least the temporary skilled migration income threshold (which is the minimum amount of income to ensure that the applicant can support himself or herself), and the proposed salary meets the market rate for such a position.

The above is some of the similar nomination requirements for a 457 visa that will continue to apply. Furthermore, Labor Market Testing will continue to be required whereby the standard business sponsors must advertise the position locally and conduct interviews before hiring an overseas worker for nominated position in order to ensure efforts are made to hire local Australian citizens or permanent residents. For each temporary overseas worker, employers will also need to contribute to the Skilling Australians Fund in the amount of AUD 1,200 per year or part year for small businesses (annual turnover of less than AUD 10 million) and AUD 1,800 per year or part year for all other businesses, which will be payable in full at the time the worker is nominated.

Alternatively, the employer may sponsor a skilled worker if the employer enters into a labor agreement with the Australian government if, among others, standard immigration options are not suitable, and the employer must provide evidence, among others, that there is a genuine and systemic shortage of such skilled workers in Australia, that there are no suitably qualified Australian workers available despite the employer efforts to recruit in Australia, and that the employer is committed to training Australians.

Implementation of new work visa system (Global Talent Scheme)

The Australian government has introduced a completely new work visa system called the Global Talent Scheme from August 2019. In order to attract the innovative talents, the Global Talent Employer Sponsored program (GTES) allows the sponsor company to nominate the potential employee not currently enlisted in STSOL or MLTSSL for this new visa scheme. The sponsor company has to prove that innovative people cannot be recruited and gain visas within the current TSS visa scheme, as well as talent that cannot be found in the Australian job market. In December 2020, 52 corporations in Australia entered into a GTES agreement with the government to participate in the program.

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  1. Release date:17/09/2017 Update date:24/06/2024