Officially known as the Commonwealth of Australia, it is an island sovereign nation that includes Tasmania and a multitude of other smaller islands. There is no official designated language, but the majority of the population speaks English. Australia hosts an incredibly diverse economy with a low rate of poverty and one of the highest average rates of wealth per adult. Political and economic stability in conjunction with a strategic location makes Australia an ideal destination for expansion.
Employees in Australia are required to have a common law contract that specifies the terms and conditions of employment, specifically the rights and obligations of all parties. The common law employment contract is subject to the regulation and approval of the government in Australia. The regulations may be from state and/or territory legislative bodies. Employment contracts can be specific to a single employee or employment contracts can cover a group of employees. Employment contracts are different and separate from independent contractors.
There are different types of employment contracts in Australia, such as a workplace agreement. This employment contract is a statement of reciprocal rights between all relevant parties. This type of contract allows employers to determine the conditions of employment tailored specifically to an employer’s business.
Another type is an award letter. In certain sectors, employment conditions are laid out in an award letter. Award letters are considered as valid legal instruments that are industry specific. It is important to note that award letters are typically not applicable to high income earners.
Working hours in Australia can be determined by either an employer, the position held by an employee or the sector an employer is operating in. The standard workweek in Australia is 38 hours, over five days. It is not uncommon for employees to work a 40-hour week and receive a half day (four hours) off every other week. Anything exceeding 38 hours per week is considered overtime. Overtime is paid at 1.5 times the ordinary rate of pay for the first three hours (two hours in some industries) and two times the basic rate after that.
Employees in Australia are entitled to sick and care leave, as a combined benefit. This is also referred to as personal/carer’s leave. Full and part time employees receive at least 10 days of paid annual sick and care leave, to use if unable to work due to illness or to care for an immediate family member who is ill. Unused leave is carried over to the next year. Employees can take any accumulated sick or care leave. Employees are paid at their base rate on days they are on personal/carer’s leave. Employees also receive two days unpaid leave to care for an immediate family or household member. Employees are not permitted to take unpaid care leave when they have available paid personal/carer’s leave.
Employees in Australia are entitled to 12 months of unpaid leave for the birth of a child or adoption of a child under the age of 16 years, after 12 months of service. Employees can request another 12 months in addition. Female employees and adoptive parents also may be eligible for up to 18 weeks of parental leave pay at the rate of the national minimum wage. Australia also provides two weeks of pay to fathers and partners related to the birth of a child or adoption. This is called Daddy and Partner Pay. Like paid parental leave, Daddy and Partner Pay is funded and paid by the Australian government. Employers may provide maternity and parental leave benefits separate from those provided by the government. Employer-provided benefits do not impact an employee’s eligibility for parental leave pay or Daddy and Partner Pay. In addition, Australia provides a lump sum payment per child (Newborn Upfront Payment) and an ongoing payment (Newborn Supplement) for the birth or adoption of a child. The Newborn supplement is up to 13 weeks for the first child and 13 weeks for subsequent children. Employees are not eligible for these payments if receiving parental leave pay.
Employees in Australia are entitled to a basic minimum wage per hour/week and applies unless there is another agreement in place for the employer or industry. Wages in Australia can vary depending on the type of employment and/or the capacity in which one is employed. Bonuses are common in Australia and based on annual pay. The average pay increases every 16 months but will vary by industry and level of experience.
In addition to public holidays, full-time and part-time employees receive four weeks of paid annual leave, but as many as six weeks is common. Employees working in shifts may get up to five weeks annual leave. Unused leave can be carried over. An employee may be required to take leave if carrying an excessive balance. Employees may be able to cash out or receive pay for unused vacation. Employees must retain at least four weeks of leave, there must be a written agreement each time leave is cashed out, an employee cannot be forced to cash out and the employee must be paid the same amount as if they had worked. Any unused leave is paid out on termination of employment.
Australia provides public healthcare coverage, Medicare, that covers the costs of most services provided by public hospitals. Private health insurance is common to cover expenses not covered by Medicare, which include dental and optical services. Many employers offer private health insurance benefits. Employers are required to enroll their employees in a superannuation scheme. When choosing which scheme to offer to employees, employers must consider the following - what the required retrenchment is in their state or territory, what supplier is best for the needs of your employees and what will be covered under the scheme. Each state and territory has legislation regarding superannuation that must be complied with.
Termination of employment can occur during the probation period, at the end of the contract term, by the employer (with or without cause) or by the employee. An employer can dismiss an employee without providing notice at the end of a fixed-term contract, for serious misconduct, or if the employee performs certain daily or season work. Serious misconduct includes theft, fraud, assault, failure to follow reasonable instructions and conduct that risks the health and safety of another person or the employer’s business. Absent a fixed-term contract or misconduct, employers must provide notice prior to terminating an employee. This includes employees still within the probation period. Employment contracts and other agreements can establish longer notice periods. Employers can provide pay in lieu of notice. Employers are required to pay severance to employees dismissed due to redundancy. This includes eliminations related to new technologies, business slow-downs, insolvencies, bankruptcies, offshoring and onshore relocations and restructuring. Employers with fewer than 15 employees are not required to pay severance. Employers may also reduce the amount of severance by applying to the Fair Work Commission. Employees may be required to provide notice on resignation. The notice period should be specified in the employee’s contract or other agreement. If no notice period is provided, the employee must provide reasonable notice.
We understand that local laws and regulations change and sourcing an accurate reference guide is not easy. Our data is researched and verified by our team of local international Employment Attorneys, HR and Benefit Professionals and Tax Accountants through our Atlas team and consultants, to ensure information up-to-date and accurate.
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