An overview of employment law in Australia

Contributed by CatherineRusso and current to 27 July 2018

Application of federal and state laws

Australia has comprehensive laws governing employment at both state and federal levels that cover minimum terms and conditions, occupational health and safety, privacy, discrimination, superannuation, long service leave and other matters.

For most employers, the terms and conditions of employment are regulated at the federal level under the system established by the Fair Work Act 2009 (Cth) (“FW Act”). The application of the FW Act is limited to ‘constitutional corporations’ (in other words, trading, financial and foreign corporations) or other organisations in a referring State. As Western Australia is not a referring State, meaning it has not referred its employment laws to the Federal government, those employers that are not corporations are covered by the state system.

State system employees are generally employed by sole traders, partnerships (where the partners are individuals not companies) and other incorporated bodies that do not engage in substantial trading and financial activities. In Western Australia, those employers and employees covered by the state system are regulated by the Industrial Relations Act 1979 (WA) (“IR Act”).

The FW Act generally 'covers the field' and overrides state and territory laws that deal with the same subject matter. However, certain employment-related matters such as occupational health and safety, workers compensation, long service leave and equal opportunity continue to be regulated at the state level even for those employees covered by the federal or national system.

The layers of employment law

In Australia, minimum conditions of employment are contained in a number of sources, including the FW Act, and any applicable awards (discussed below). These sources build on each other, meaning that while employers can supplement or exceed the minimum terms and conditions prescribed in either the FW Act (for national system employees) or Minimum Conditions of Employment Act 1993 (WA) (for state system employees), and any applicable awards or agreements, they cannot trade off or ‘undercut’ these minimum standards.

An overview of these minimum conditions is set out in the tables below.

Minimum conditions of employment

National / federal system

The National Employment Standards (“NES”) provides for 10 minimum conditions of employment. These are contained in Part 2-2 of the FW Act and have applied since 1 January 2010. These minimum standards must be provided to all employees in the national system whether or not they are covered by awards or enterprise agreements.

Standard	Explanation
Hours of work (section 62)	For full-time employees, a maximum of 38 ordinary hours each week plus ‘reasonable’ additional hours.
Flexible working arrangements (section 65)	Employees who are parents, carers, have a disability, are aged 55 or older, are experiencing domestic violence or provide care and support to a family member who is experiencing domestic violence have the right to request flexible working arrangements.
Parental leave (section 67 to 85)	Up to 52 weeks of parental/adoption leave and related entitlements, with the ability to request a further 52 weeks leave.
Annual leave (section 87)	4 weeks a year, with an extra 1 week for continuous shift workers.
Persona/Carer’s leave (sections 96, 102, 104)	10 days of paid personal (sick/carer’s) leave per year plus 2 days of unpaid carer’s leave or compassionate leave (per occasion required).
Community service leave (section 108)	The right to take leave to attend jury service and voluntary emergency management activities (eg firefighting).
Long service leave (section 113)	State and territory long service leave entitlements must be retained.
Public holidays (section 114)	The right to be absent from work on public holidays and the right to refuse to work on a public holiday on reasonable grounds.
Notice of termination and redundancy pay (sections 117 and 119)	Dependent on length of service, up to 5 weeks’ notice and up to 16 weeks’ redundancy pay.
Fair Work Information Statement (section 125)	Must be issued to all new employees before, or as soon as practicable after, the employee starts employment.

Some NES entitlements are tied to employment status (that is, whether the employee is engaged on a permanent or casual basis) or length of service (for example, parental leave, notice of termination and redundancy pay).

The NES also include rules about how these entitlements apply in practice (for example, when annual leave can be taken, what documentation is required for personal leave, whether the leave is paid or unpaid etc).

Employers and employees are free to negotiate other terms and conditions not covered by the NES or in excess of the NES, but the provisions of the NES must be provided to employees as a minimum.

State system

The Minimum Conditions of Employment Act 1993 (WA) prescribes minimum standards of employment for all employers and employees covered by the state system in Western Australia, with the exception of persons who are paid wholly by commission, piece workers, certain persons with disabilities in supported employment, volunteers and some persons carrying out duties for the National Trust (WA). Other types of employees may also be excluded by the Minimum Conditions of Employment Regulations 1993 (WA) from time to time.

Condition	Explanation
Hours of work (sections 9A and 9B)	An employee is not to be required or requested to work more than either the employee’s ordinary hours of work, or, if none are specified, 38 hours per week, plus ‘reasonable’ additional hours.
Minimum rates of pay (sections 10 to 14)	Employees are entitled to be paid for each hour worked by the employee in a week the applicable minimum weekly rate divided by 38. The rates of pay are reviewed every 12 months by the Western Australian Industrial Relations Commission (“WAIRC”). The current weekly rates of pay are available from Wageline (on 1300 655 266) or from the Labour Relations section of the website www.commerce.wa.gov.au
Leave for illness or injury or family care (sections 20 to 20B)	2 weeks accrued weekly for periods of absence from work resulting from the illness or injury, or as carer’s leave. Unpaid carer’s leave of up to 2 days (per occasion). It does not apply to casual employees.
Annual leave (sections 23 to 25)	4 weeks, up to 152 hours. It does not apply to casual employees.
Bereavement leave (section 27)	Up to 2 days paid bereavement leave on the death of a member of the employee’s family or household.
Public holidays (section 30)	The right to be absent from work on public holidays and be paid as if required to work on that day.
Parental leave (sections 32 to 39)	Up to 52 weeks of unpaid leave for the birth or adoption of a child, with the ability to request a further 52 weeks leave.

The Minimum Conditions of Employment Act 1993 (WA) has provisions in relation to the form and method of payment to be made to an employee and prevents an employer from directing an employee as to the use of his or her pay and also requires that an employer to only make deductions from an employee's pay authorised in writing.

Under the Minimum Conditions of Employment Act 1993 (WA), certain information about employment changes by an employer that will have a significant effect on the employee, or about impending redundancy, must also be provided to employees.

Long Service Leave

An employee’s entitlement to long service leave is generally provided by the Long Service Leave Act 1958 (WA) (“LSL Act”) whether that employee is covered by the national or state system.

Under the LSL Act, a full time employee is entitled to take:

• 8 2/3weeks of paid leave after 10 years of continuous service,
• plus another 4 1/3 weeks of paid leave for each further 5 years of continuous service after the initial 10 years.

Employees are entitled to a proportionate entitlement on termination after 7 years of continuous service.

Part time and casual employees are also entitled to long service leave on a pro rata basis depending on the number of hours worked.