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What is Employment Law?

Employment law is a broad area of legislation that defines the relationship between you and your employees.

The main sources of employment law in Australia are

  • legislation (federal, state and territory laws);
  • industrial instruments; and
  • the common law.

The Fair Work Act 2009 is arguably the most important piece of employment law in Australia. It provides the minimum terms and conditions for the majority of employees in Australia that are covered by the national workplace relations system. The National Employment Standards (NES), contained in the Fair Work Act 2009 set out 11 minimum entitlements which apply to most employees in the private sector.

However, it is not the only piece of workplace relations legislation in Australia, as it is supplemented by other federal, state and territory laws, nor does it apply to every workplace in Australia. For example, Western Australia maintains its own state-based workplace relations system that partially covers the private sector in that state.

Employment law covers a range of matters that relate to the employer and employee relationship such as wages and working conditions, through to dismissal and discrimination on grounds of age, race, or sexuality, for example.

Why Does Employment Law Exist?

The purpose of employment law is to regulate the relationship between employers and employees, while in some cases also protecting the rights of job applicants and former employees.

There is legislation that applies to all national system employers across Australia – in other words, to most employers in Australia. This is regardless of territory, states, business model or industry.

The objective of this legislation is to place responsibility on the employer to ensure that their employees are treated fairly and are receiving the minimum employment rights and entitlements for the industry they work in and the job they do within that industry – including minimum pay, leave entitlements, redundancy, periods of notice for termination, and more.

This legislation ensures consistently fair dealings for all employees and in some cases potential employees – such as during the recruitment process – and governs day-to-day workplace interactions,  right through to the dismissal procedure.

Benefits of Employment Law

Employment Law provides certainty for both employer and employees as to rights and obligations and may also provide the following benefits:

For Employees

  • Be treated fairly and equally, including in regards to pay, maximum working hours, working conditions, safety, rest and meal breaks, leave entitlements, notice periods, and dismissal.
  • Be informed of their rights and responsibilities
  • Increased job security and motivation
  • Reduced risk of exposure to unsafe working conditions

For Employers

  • Be informed on how to treat your employees fairly in all aspects of their employment.
  • Promotes ethical business practices
  • Improved reputation and workplace culture
  • Increased productivity and morale

Recently Changed Laws in Australia

Every year, there are both minor and major changes to Australia’s employment regulatory landscape. Some changes affect only certain businesses and industries, while other changes affect every workplace across the country regardless of their industry.

With a history spanning over 100 years of reform, the state of the Australian industrial relations system is constantly evolving. Employment law changes range from major reforms through to smaller yet still vital changes that happen every year. For example, the Fair Work Commission reviews the national minimum wage every year for employees covered by the national workplace relations system.

Over the last couple of decades, employers have seen WorkChoices arrive in 2005, only to make way for the Fair Work Act introduced in 2009, which in turn gave us the National Employment Standards, then Modern Awards in 2010. In 2014, new anti-bullying provisions gave extended powers for the Fair Work Commission to deal with bullying. More recently, the modern awards have been updated as reflected by the 2020 in their title or had temporary provisions added to provide more flexibility to businesses to enable them to weather the effects of the COVID-19 pandemic.

Here are some of the most significant changes to employment legislation so far in 2021:

Minimum Wage Rates

Each year, the Fair Work Commission reviews Award Minimum Wages and sets the National Minimum Wage for award-free employees (which are those employees not covered by an award or an enterprise agreement) in a decision called the National Minimum Wage Order.

The decision impacts businesses and employees that fall under the National Workplace Relations System. These are businesses that are covered by the Fair Work Act 2009 (the Fair Work Act).

This year, the national minimum wage will increase by 2.5% and the increase will take place from the start of the first full pay period on or after 01 July 2021 for award free employees. Award minimum wages will be staggered per industry and introduced as of the first full pay period on or after 01 July 2021, 01 September 2021 and 01 November 2021 respectively, depending on the award that applies

Updates to Legislation regarding Sexual Harassment

On 8 April 2021, the Australian Government released ‘A Roadmap for Respect: Preventing and Addressing Sexual Harassment in Australian Workplaces’ (Roadmap for Respect) based on the [email protected] report containing recommendations by the Australian Human Rights Commission to prevent sexual harassment in the workplace through changes to the Sex Discrimination Act and the Fair Work Act as well as workplace Health and safety legislation.

On 24 June 2021, a Bill proposing amendments to the Sex Discrimination Act, The Fair Work Act and the Human Rights Act was introduced into Federal Parliament. The Sex Discrimination and Fair Work (Respect at Work) Amendment Bill 2021 proposes protections against sexual harassment and other forms of sex discrimination in the workplace, and includes amendments to the Fair Work Act to explicitly include sexual harassment in the definition of serious misconduct.

Casual Employment

Earlier this year, the Fair Work Act 2009 (the Fair Work Act) was amended with regards to Casual Employees, effective from 27 March 2021 to include a definition of casual employment. This was to provide certainty in light of a series of Federal Court decisions, decisions in which it was found, in some circumstances, “casual” workers could be considered a permanent employee for the purpose of entitlements such as annual leave. In addition, the Court ruled that there were issues with offsetting casual loading against these entitlements in some cases (see WorkPac Pty Ltd v Robert Rossato [2020] FCAFC 84). This decision is currently under Appeal in the High Court.

Under the new definition, a person is a casual employee if they accept a job offer from an employer on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work.     

Whatever is agreed at the time the employee was employed will determine whether the employee is a casual or not even if they have worked a regular pattern of work ever since they started. Casual employees do not get paid sick or annual leave, but they receive a casual loading on top of their normal pay to compensate.

In addition, the legislative changes also incorporate casual conversion rights into the Fair Work Act. An employer who has 15 or more employees must make an offer to their casual employee to convert to full-time or part-time permanent employment if the employee:

  • has worked for their employer for 12 months, AND
  • has worked a regular pattern of hours for at least the last 6 of those months on an ongoing basis, AND
  • the employee could continue working those hours as a permanent employee without significant changes

unless the employer has reasonable business grounds not to offer the employee permanent employment that are known or reasonably foreseeable at the time.

An employer with fewer than 15 employees does not have to offer permanent employment, but their casual employees may become entitled to request casual conversion if certain conditions are met.

Underpayments

Employees must be paid at least the minimum entitlements for the job they do and the industry they are in. The minimum amount of pay they should receive will generally depend on the applicable industrial instrument, e.g. a modern award or an enterprise agreement.

An underpayment is when an employee is not paid their minimum entitlements for the work they do and when they do it. These entitlements may include overtime rates, penalty rates, payment for annual leave or leave loading, and allowances, for example.

You may not know you have underpaid an employee until the employee raises the matter or the Fair Work Ombudsman conducts an audit.  Legislation has been introduced in Victoria regarding the deliberate underpaying of employees.

To help identify if you are paying your employees correctly you should review wages against the relevant industrial instrument and / or the national minimum wage.  Make sure you keep up to date with any pay increases or award changes, e.g. annual minimum wage increases, which usually take place from the first full pay period on or after 1 July each year.

Staying Up To Date With Employment Law

As an employer, you have an obligation to comply with all aspects of Australian employment law and ensure your employees can work comfortably in a safe and secure environment – free of bullying, discrimination, and harassment.

It is your responsibility to inform yourself as to your employment obligations, and it is recommended you  regularly update any workplace policies and procedures in your employee handbook accordingly. We can help you understand your obligations regarding changing workplace entitlements. Call us for free initial advice on 1300 207 182.

[1] WorkPac Pty Ltd v Robert Rossato [2020] FCAFC 84

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Frequently Asked Questions

  • What Is Employment Legislation?

    Employment legislation regulates the employment relationship between an employer and their employee. It generally also provides a framework to resolve any disputes between employers and employees that may arise.

  • What Are The Five Major Employment Laws In Australia?

    Here is a list of some of the most important workplace relations legislation that governs industrial relations and employment relationships in Australia:

  • What Are Employer Rights In Australia?

    As an employer, you have few rights other than to expect employees to carry out their duties to a reasonable standard, follow reasonable management directions, and abide by their contract and workplace policies and procedures. However, you have a number of obligations and responsibilities towards your employees under the Fair Work Act and other industrial relations legislation.

  • When Do You Need To Think About Employment Law?

    As an employer, you should keep employment legislation constantly in mind to make sure you are meeting your obligations, so it is important to remain abreast of any changes in employment legislation that may affect your business.

    For example, most employers in Australia are covered by the National workplace relations system set out in the Fair Work Act 2009. This means your business will be covered by the National Employment Standards and may also be covered by an industrial instrument such as a modern award, enterprise agreement or other registered agreement. This legislation is updated frequently by the Fair Work Commission.

  • What Is The Main Purpose Of Employment Law?

    The purpose of employment legislation is to regulate the employment relationship between employer and employee. It generally also provides a framework to resolve any disputes between employers and employees that may arise.

    The objective of this legislation is to place responsibility on the employer to ensure that their employees are treated fairly and are receiving the minimum employment rights and entitlements for the industry they work in and the job they do within that industry – including minimum pay, leave entitlements, redundancy, periods of notice for termination, and more.

  • What Are Some Changes In The Workplace In The Last 20 Years?

    Major changes to workplace and industrial relations legislation over the past few years include Work Choices 2005, the Fair Work Act 2009 introducing the NES and related industrial Instruments, and most recently the Bill incorporating recommendations from the [email protected] report.

  • How To Keep Up To Date With Legislation Changes In Australia?

    Employsure can help you keep up to date with changes to workplace and employment legislation. Call us for free initial advice on 1300 207 182

  • How Does Legislation Affect Business Operations And Workplace Relationships?

    Employment legislation regulates the employment relationship between an employer and their employee. It sets out the rights and responsibilities of employees and employers, and generally also provides a framework to resolve any disputes between employers and employees that may arise. Depending on the legislation, it may provide minimum entitlements and protection for employees,  ensure healthy and safe work practices, enable flexible working arrangements and provide for equality and fairness at work.

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