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 fair work legislation – Changes to bargaining, job security, gender equality and new protections

The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) introduced the most significant industrial relations reforms since the introduction of the Fair Work Act. The key changes concern

  • agreements covering multiple employers;
  • bargaining disputes;
  • industrial action;
  • terminating agreements;
  • enterprise agreement approval processes;
  • pay equity;
  • respect at work;
  • discrimination;
  • fixed/maximum term contracts;
  • flexible working requests;
  • unpaid parental leave extension requests;
  • abolishment of the Australian Building and Construction Commission (ABCC);
  • establishment of the National Construction Industry Forum; and
  • abolishment of the Registered Organisations Commission (ROC).

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

Reforms with respect to foreign workers' temporary visa schemes

The Australian government announced the reform with respect to the foreign workers' temporary visa scheme in April 2017, and the reform took effect on March 18, 2018. Therefore, companies that consider employing foreign workers or relocating workers from abroad to Australia are required to respond to the reform. Please see Section 7 below for more details.

Even though significant mitigation measures were implemented by the Australian government against the reforms above, their trend towards tightening the restrictions on employment of foreign nationals has stayed the same; therefore, the combination of the above factors and the other issues summarized in this overview below has gradually created a challenging business environment for businesses and employers in regard to employing foreign workers who are not already citizens or permanent residents of Australia or have the appropriate permanent visas with work entitlements.

COVID-19 vaccination issues in the workplace

While the Australian government's policy is that receiving a vaccination is generally voluntary, there are certain mandates and restrictions on the employers' conduct in relation to COVID-19 vaccinations in the workplace. The main points are discussed in Section 8 below.

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 11 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 Works 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 11 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 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:
  • 1 January (New Year's Day)
  • 27 January (Australia Day)
  • Good Friday
  • Easter Monday
  • 25 April (Anzac Day)
  • 27 April (Anzac Day (Declared Public Holiday))
  • the Queen's birthday holiday (on the day on which it is celebrated in a state or territory or a region of a state or territory)
  • 25 December (Christmas Day)
  • 26 December (Boxing Day)
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.

From March 27, 2021, the Fair Work Act 2009 (Cth) has been 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. 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), five days unpaid 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.

During the COVID-19 pandemic, the relevant state laws require businesses to comply with physical distancing and density requirements, notify the state regulatory body of any COVID-19 case arising out of work, and comply with all other state and federal public health directions (both general and industry-specific). The COVID Safe Plan (and the variations of it in each state), setting out risk management measures to fight against the spread of the virus, must be implemented in certain sectors. For example, in the state of New South Wales, businesses, such as gyms and hospitality venues (restaurants, cafes, clubs, etc.) must prepare their COVID Safety Plan using industry-specific checklists and be registered with the regulatory body as COVID Safe.

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 has been in opposition at the federal level since 2013 and was recently the ruling party at the federal level from 2007 until the 2013 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. The Fair Work Act revised in October 2017 increased penalties for employers that breach their record-keeping responsibility, and currently, the maximum penalty for a serious contravention is AUD 133,200 for individuals and AUD 666,000 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.

Failure to comply with the Act exposes the breaching entity to a civil penalty up to AUD 2.22 million, which may be significantly increased by the currently proposed reforms to the Privacy Act 1988 (Cth). The exposure draft and the discussion paper of the reforms that have been released for public submissions focus on regulating the handling of personal information by the online platforms that trade in personal information in response to the Digital Platforms Inquiry by ACCC and Australian Law Reform Commission reports in 2014, and limit or abolish the employee records exemption and small business exemption, as well as tighten the consent requirements.

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 10.5% (the percentage of the period between July 1, 2022 and June 30, 2023) 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 fair work legislation – Changes to bargaining, job security, gender equality and new protections

The Fair Wok Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth), which received royal ascent on 6 December 2022, introduced the most significant industrial relations reforms since the introduction of the Fair Work Act. The key changes implemented through this Act include the following:

Agreements Covering Multiple Employers
As a consequence of these amendments, employers can be obliged to bargain for agreements that cover multiple employers and employees can seek to take protected industrial action or bargaining orders in support of these agreements.

Bargaining Disputes
The Fair Work Commission was given broader powers to intervene and make workplace determinations where it is difficult for bargaining to take place.

Industrial Action
Limitations concerning protected industrial action in relation to multi-enterprise agreements were removed and a new obligation to attend Fair Work Commission mediations or conciliations before protected industrial actions is taken was introduced.

Terminating Agreements
The scope for termination of enterprise agreements was significantly reduced, particularly during bargaining.

Enterprise Agreement Approval Process (BOOT and Pre-approval Requirements)
Some of the changes under this section include

  • bargaining can now commence when an employee bargaining representative gives notice in certain circumstances;
  • some preapproval requirements have been removed;
  • limitations have been implemented on the use of start-up enterprise agreements;
  • the Better Off Overall Test (BOOT) has been simplified and must involve a collective assessment;
  • parties may apply for a reassessment of the BOOT during the life of the enterprise agreement, e.g., if employees' work patterns change; and
  • the Fair Work Commission has been given the power to amend an enterprise agreement during the approval process.

Pay Equity
The Fair Work Commission has greater scope to make Equal Payment Orders and prohibitions on pay secrecy clauses in employment contracts. Additionally, two expert panels were established within the Fair Work Commission dealing with pay equity and the care and community sector.

Respect at Work
Prohibitions on workplace sexual harassment have been implemented whereby principals shall be vicariously liable for acts of their employees or agents. The Fair Work Commission has also been given greater powers to deal with sexual harassment disputes.

Minor amendments have been made to the anti-discrimination provisions of the Fair Work Act to reflect Commonwealth anti-discrimination laws.

Fixed/Maximum Term Contracts
Prohibitions have been set in place on fixed/maximum terms contracts in certain circumstances.

Flexible Working Requests
There is now expanded scope for employees to request flexible work arrangements.

Unpaid Parental Leave Extension Requests
Expanded obligations on employers in response to requests for extensions of unpaid parental leave.

The Objects of the Fair Work Act
The objects of the Fair Work Act have been expanded to include promotion of job security and gender equality.

Abolishment of the Australian Building and Construction Commission (ABCC)
The ABCC has been abolished, with functions transferred to the Fair Work Ombudsman.

Establishment of the National Construction Industry Forum
The forum has been established to provide advice to the Australian government concerning work in the building and construction industry.

Abolishment of the Registered Organizations Commission (ROC)
This committee shall be abolished with powers transferred to the Fair Work Commission.

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.

Abolishment of Administrative Appeals Tribunal (AAT)

The Administrative Appeals Tribunal (AAT), a government body which made decisions with respect to migrant and refugee visas shall be abolished in 2023 with a new body to be established in 2023. This will critically affect appeals with respect to visa applications for migrants and foreign workers.

Visa Restrictions under COVID-19

Australia further relaxed its COVID-19 restrictions and border control measures as follows:

  • From 9 September 2022, it was mandated that face masks would no longer be required on flights traveling to Australia.
  • From 6 July 2022, proof of vaccination status, digital passenger declarations, and travel exemptions for unvaccinated travelers would no longer be required to enter Australia.

Despite the above, since circumstances surrounding the pandemic can change rapidly, all travelers and visa holders should check the latest information on the Department of Home Affairs website.

COVID-19 vaccination issues in the workplace

Though at the federal level, vaccinations are generally voluntary, there are varying vaccine mandates across different industries and states/territories in Australia. Specifically, state and territory governments have issued public heath orders with respect to workers in industries including aged care, quarantine and transportation, health care and schools and early childhood education.8

Even if the law does not mandate vaccination, employers may still impose a mandatory vaccination policy on employees so long as it is a lawful and reasonable direction and complies with the employment agreement, applicable modern award, applicable enterprise agreement , and relevant legislation (e.g., general protections under the Fair Work Act 2009 (Cth) and the antidiscrimination law).

Whether it is a lawful and reasonable direction depends on a range of factors, such as the nature of each workplace, the extent of community transmission, public health orders, effectiveness of vaccines, work health and safety obligations, and each employee's circumstances,9 and the employers must make their own decisions appropriate to their workplace.

The Fair Work Ombudsman provides general guidance as follows: types of work are separated into 4four categories — Tier 1 work where employees are required to interact with people with an increased risk of being infected (e.g., hotel quarantine and border control); Tier 2 work where employees have close contact with people who are particularly vulnerable to the health impacts (e.g., health care or aged care); Tier 3 work where there is interaction or likely interaction between employees and other people, such as customers (e.g., stores); and Tier 4 work where employees have minimal face-to-face interaction (e.g, working from home), and an employer's vaccination direction to Tier 1 or Tier 2 work is more likely to be reasonable, while Tier 4 work is unlikely to be reasonable. Reasonableness of a vaccination direction for Tier 3 work will depend on the risk of community transmission and the necessity of the workplace to be operating in the community.

The employee may refuse to comply with a lawful and reasonable direction of the employer. If the employee refuses to comply with a legitimate reason, such as a medical condition, the employer should consider other options, such as alternative work arrangements. If the employee does not have a legitimate reason, disciplinary action may be taken only if it is reasonable under the circumstances in accordance with the general protection provisions of the Fair Work Act 2009 (Cth) (though it is generally not permitted to suspend employees without pay). Because of the various employee protections against dismissal or adverse action in Australia, employers should seek legal advice in connection with these matters.

Generally, employers may require evidence of vaccination or the medical condition from employees if they give a lawful and reasonable direction to vaccinate. The requiring of evidence must also be a lawful and reasonable direction. Such evidence is personal information that is sensitive information under the Privacy Act 1988 (Cth); therefore, the collection of the information requires the employee's consent and compliance with other privacy obligations under the Act, such as providing an information notice.

Flexibility arrangements and pandemic leave

The provisions added to the Fair Work Act 2009 (Cth) allow flexible work arrangements to employers. Those provisions apply to employers who are receiving JobKeeper payments, as well as those who previously qualified for the JobKeeper scheme but no longer qualify (or choose not to participate) from 28 September 2020 and demonstrate a 10% decline in turnover for a relevant quarter.

If the provisions apply, the employers may temporarily give directions to (i) stand down an employee (e.g. reducing employee's hours or days of work), (ii) change an employee's usual duties (but the pay rate cannot be reduced), or (iii) change an employee's location of work (e.g. work from home). The employers may also make agreements with the employees to change their days and times of work.

The directions must be reasonable, taking into account all the circumstances that include any caring responsibilities that the employee has, and if the direction applies to a category of employees, any unfair effect on others. Employees working under a JobKeeper enabling stand down direction still accrue their usual leave entitlements and redundancy pay for the period the direction applies, as if the direction had not been given. The directions will expire on 29 March 2021.

Furthermore, the Fair Work Commission made determinations varying a list of Modern Awards to add two weeks of unpaid pandemic leave and annual leave flexibility where the employees may agree with the employer to take twice as much annual leave at half their normal pay. The unpaid pandemic leave may be taken where the employee is required to self-isolate or is prevented from working because of the measures implemented by the government. Further amendments are made to the certain awards. Companies are encouraged to confirm if their relevant modern awards are affected.

Proposed omnibus amendments to the Fair Work Act

The Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020 has been introduced in the Parliament, which proposes to reform the Fair Work Act 2009 (Cth) on, among others, the following topics:

  1. Casual employment

    The Bill attempts to address the uncertainty arising from WorkPac v. Rossato [2020] FCAFC 84 as discussed in Section 2.3 above, by introducing a definition in the Fair Work Act 2009 (Cth). Under the Bill, a worker is a casual employee if, at the time of offer and acceptance of employment, they had “no firm advance commitment to continuing and indefinite work according to an agreed pattern of work.” To determine whether there was such a commitment, regard must be given to a set of considerations, such as whether the employer can elect to offer work and the employee can elect to accept work and whether the person will work only as required. Furthermore, the employers will be required to provide the relevant employees with a Casual Employment Information Statement to explain the casual employment criteria.

    Furthermore, employers will be required to offer a full-time or part-time position to casual employees who have worked for 12 months and during the last 6 months of that period have worked on a regular basis, unless there are reasonable grounds not to offer the position. If a casual employee has been offered a full-time or part-time position and has not refused the offer, the employee then will have a residual right to request the conversion at a later time.

    As an attempt to prevent casual employees from double-dipping in entitlements, the Bill makes it clear that, if the employee is later found to have been a permanent employee, any casual earnings having been paid to the employee will be set off against any claim as a permanent employee.

  2. Flexible work arrangements

    As a continuance of the flexible work arrangements facilitated during the COVID-19 pandemic, the Bill allows employers in certain industries (such as retail and hospitality industries) to issue flexible work directions. The restrictions similar to those discussed in Section 7.2 above will apply.

    The Bill also allows employers and part-time employees to agree to work additional hours without overtime rates in the industries mentioned above. To be eligible, the part-time employees must be working at least 16 hours per week and the shift length must be at least 3 hours. Overtime will still be payable if the hours exceed 38 hours per week or otherwise specified in the modern award.

  3. Collective agreements

    Employers may enter into greenfields agreements7 for a term of eight years (the usual term is four years) for new construction projects that are worth AUD 500 million or more, or AUD 250 million for a project of national significance, affording more certainty for major projects.

    Furthermore, a number of amendments are proposed in relation to the enterprise agreement that includes changes to BOOT (Better Off Overall Test) that is a test used by the Fair Work Commission in determining whether to approve enterprise agreements.

  4. Increased penalties

    Civil penalties for contraventions with provisions regarding remuneration will be significantly increased. Furthermore, underpayment will be criminalized, attracting a maximum penalty of four years' imprisonment and/or a fine of up to AUD 5.55 million for corporations.

    Employers are encouraged to follow up closely with the development of the reforms because there may be further changes to the proposed Bill.

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