Employment of workers in Australia is governed by federal and state/territory legislation, which address matters such as:
- annual leave;
- long service leave;
- compulsory superannuation contributions by employers;
- workers' compensation;
- occupational health and safety (OHS);
- discrimination;
- redundancy;
- unfair contracts; and
- unfair dismissal.
Many workers' employment is also governed by federal industrial awards or agreements in relation to matters such as minimum rates of pay, working hours, overtime rates, sick leave, annual leave and entitlements on termination of employment. The main federal statute dealing with employment law is the Fair Work Act 2009 (Cth).
The Fair Work Act requires employers to comply with enforceable minimum employment terms and conditions which are referred to as the National Employment Standards. The National Employment Standards set out 10 minimum workplace rights and entitlements for all employees covered by the national workplace relations system.
The Fair Work Act recognises a number of modern awards. Modern awards are industry or occupation-based enforceable employment standards which set out mandatory, minimum conditions for employers and employees. Modern awards do not apply to high-income earners (i.e. those employees who are paid a guaranteed amount of at least A$123,300 a year (indexed annually).
Executive remuneration is also subject to regulation under the Corporations Act. Part 2D.2 of the Corporations Act prescribes the maximum permissible termination payment that may be given to a person holding a managerial or executive office in a company without shareholder approval. Further, additional obligations exist that:
- prohibit key management personnel from voting on remuneration matters;
- require companies to disclose details relating to the use of remuneration consultants; and
- in respect of listed companies:
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- require a general meeting to be held for the re-election of directors if shareholder concerns on the remuneration reports of the company are not adequately addressed over two consecutive years; and
- prohibit key management personnel from hedging their incentive-based remuneration.
OHS requirements exist at the state/territory level and have recently been harmonised across Australia. In certain situations, the employer's obligations may extend to independent contractor arrangements. These requirements are stringent and strongly enforced and significant penalties may apply for non-compliance.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
