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Employment in Australia

Australian employment law appears complex and confusing when looking from outside view although in some ways there are many similarities to other countries. Other factors that complicate matters include the differences between states in payroll administration.  For these and many other reasons the following are only guidelines in the broadest sense, and professional legal services are recommended when employing in Australia.

Employment Law in Australia multiple levels of influence: aside from its foundation in common law principles, there is minimum standards defined by legislation (primarily the “Fair Work Act”). However if the employment falls under a statutory “Award” it may have differing or extra conditions on top of the legislation. Collective agreements such as “Enterprise Bargaining Agreements”, can apply specific conditions on the top legislation or Award.

While employment law was mostly unified with the introduction of the Fair Work Act, the state of Western Australia did not fully acquiesce to referral of power to the federal government. Most types of employers are covered by the federal government, and employment law in general in Western Australia remains highly similar, but as a warning, there may be variations in obligations and standards.

Exceptions include State employees working in public sector agencies from New South Wales, Queensland, South Australia and Tasmania, local council workers in New South Wales, Queensland and South Australia, and in Western Australia where the Fair Work Act legislation only covers workers employed by a “constitutional corporation”, which includes trading and financial corporations, corporations formed outside of Australia, and federal government agencies.

For these reasons the following is a very general guide, mainly based on the minimum obligations set out in the federal legislation. 

Key points on employment in Australia

There are several key areas to be aware of within Australia’s employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department.  These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the local laws and rules for both local employees as well as foreign nationals.

  1. Contracts

    All employees in Australia will have a common law contract of employment that specifies the terms and conditions of employment.

Employee Entitlements

Information Explanation
Time Off Work ?

Holiday allowance: Paid days off on public holidays unless it’s reasonable to ask the employee to work.

Community service leave: Up to 10 days paid leave for jury service (after 10 days is unpaid) and unpaid leave for voluntary emergency work.

Medical Leave ?

s reported by FindLaw.com, all full-time employees except casuals are entitled to a minimum of 10 days paid personal leave each year. These days can be used for time off for sickness, for example. The employee can take personal leave if they or an immediate family member is sick, injured or has an unexpected emergency. In addition, employees may take up to two days of unpaid leave under ‘compassionate’ grounds – such as due to the death of a family member and 2 days unpaid caregiver’s leave.

Employment Termination

Information Explanation
Resignation / End of Service Payment ?

A transitional entitlement for employees as outlined in an applicable pre-modernized award, pending the development of a uniform national long service leave standard

Severance / Redundancy Pay ?

The Fair Work Australia website reports that for any wages and holiday time owed, the employer must also pay a severance if the employee is made redundant. If the employee has at least one year of continuous service and the employer employs 15 (i.e. does not fall under the ‘Small Business’ code) can be entitled to a maximum of 16 weeks pay).

Termination of Employment ?

The Fair Work Australia website reports that an employer must provide a minimum period of notice, as follows:

Less than 1 year                                1 week

Between 1 and 3 years                     2 weeks

Between 3 and 5 years                     3 weeks

Over 5 years                                      4 weeks

If the employee is over 45 years old, and has completed at least two years of service, additional one week’s notice is required.


The Fair Work Australia website explains the termination procedure in Australia. The employer must have cause for termination, and in particular it must not be unlawful (e.g. discriminatory on grounds of race, gender, etc) and not be “harsh, unjust or unreasonable”. Generally the employer must show they took reasonable steps, such as performance reviews and several formal warnings, and counselling the employee to give them a proper opportunity to understand and rectify any performance issues. Employees can be dismissed under the context of a redundancy so long as the redundancy is genuine.

Fixed-term contracts can allow the relationship to expire at the end of the term specified in the contract.

Outsourcing Employment Through a GEO Employer of Record Service

Compliance with local employment requirements is just one of the issues foreign companies face when employing staff in Australia. For companies which intend to employ their staff directly through their incorporated Australian entity, professional legal advice is recommended. Shield GEO provides an alternative path for companies to outsource the employment of their staff in Australia.

As a Global Employer Organization (GEO), Shield GEO acts as the Employer of Record and ensures the employment is compliant with host country regulations regarding employment. In addition Shield GEO will handle payroll processing, tax and immigration. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Australia.

The Shield GEO solution is an attractive alternative where:

– the company is looking to employ staff quickly

– the company doesn’t have an appropriately incorporated entity in Australia

– the company wants to work within a defined budget

– the company wants to limit its initial commitment in Australia

– the company needs help with tax, employment, immigration and payroll compliance in Australia

Shield GEO can contract directly with the company to employ and payroll their staff in Australia.  Shield GEO supplies local employment contracts for the staff which ensure that local statutory requirements are met covering issues such as termination, probation periods, leave entitlements and statutory benefits.  Shield GEO is able to advise companies how to cover local employment regulations whilst still providing consistent global employment policies. Understand more about outsourced employment through Shield GEO.



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