Australian employment law: 10 key features

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Generous leave entitlements and a unique legal framework characterise Australian employment law. Qian Mou highlights 10 interesting aspects of workplaces down under.

1. Modern awards

Minimum entitlements for employees in particular sectors and occupations are set out in modern awards. There are currently 122 of these awards in force and most industries are covered by one.

Modern awards generally cover minimum wage, hours of work, annual leave and overtime pay, along with other significant terms.

2. Enterprise agreements

Enterprise agreements contain terms and conditions negotiated between an employer and a trade union or group of employees.

Modern awards do not apply to employees who covered by an enterprise agreement. However, employees will be better off overall under the enterprise agreement than under the modern award.

3. Parental leave of 24 months

Employees with at least 12 months’ continuous service are entitled to take up to 12 months of unpaid parental leave in connection with the birth or adoption of a child.

After taking parental leave, the employee may request up to 12 months’ additional leave, although this request may be refused on reasonable business grounds.

4. Long service leave

Employees are entitled to a lengthy period of paid leave after a significant period of continuous service. This can range from six weeks’ leave after seven years’ service, to thirteen weeks’ leave following 10 years’ service, depending on the employee’s state or territory of employment.

Employees may be entitled to a pro rata payment in lieu of their accrued long service leave if their employment is terminated.

5. Personal/carer’s leave

Full-time employees are generally entitled to 10 days’ paid personal/carer’s leave per year, which can be used in the case of personal illness or to care for family members.

Personal/carer’s leave accrues over the course of a year and carries over to subsequent years if it is not used.

6. Transfers of undertakings

Employment relationships do not transfer automatically following the sale of a business. Rather, new owners of a business may offer employment to some or all of a workforce following a sale.

In some circumstances, terms and conditions of employees set out in enterprise agreements or modern awards will continue to apply.

New employers may be required to recognise an employee’s prior length of service for the purpose of calculating workplace entitlements.

7. Unfair dismissal

Certain employees are eligible for unfair dismissal protection. One condition of eligibility is continuous employment for six months, or one year if their employer has with fewer than 15 employees (a small business).

A dismissal is unfair if it is harsh, unjust or unreasonable, is not a genuine case of redundancy (if redundancy is claimed), or in the case of small businesses, is not consistent with the Small Business Fair Dismissal Code.

8. Redundancy payments

Certain employees who are dismissed on the grounds of redundancy are entitled to statutory redundancy pay ranging from four to 16 weeks’ pay, or to amounts set out in applicable modern awards or enterprise agreements.

Employees with less than one year of continuous service or employees of small businesses are not entitled to statutory redundancy pay.

9. Notice periods

Employees are generally entitled to statutory minimum notice of termination by the employer.

In practice, it is normal for contracts of employment to provide for a longer period of notice by the employer.

10. Gender equality indicators

Employers (other than public authorities) with 100 or more employees are required to report on gender equality indicators annually.

Employers must provide information on the gender composition of the workforce; equal remuneration between women and men; availability and use of flexible working arrangements; consultation with employees on gender equality issues; and sex-based discrimination in the workplace.

Employers (other than public authorities) with 500 or more employees must put in place additional policies and strategies to achieve objectives related to the equality indicators.

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