horizons logo
Start hiring

Labor law
in Australia.

SALARY PAYMENT IN Australian Dollar (AUD $)

CONTRACT LANGUAGE English

PAYROLL TAX 15.85%

PAYROLL CYCLE Weekly or bi-weekly

TIME TO HIRE 12 hours

Hire and pay talents
with Horizons in
180+ countries

Australia

    Labor law in Australia – Overview

    Australia has a dual system of labour laws, split between employment issues governed by Commonwealth laws, and then other employment issues governed by the relevant state or territory law. In some instances, common law cases also play a role in disputes. The most important piece of legislation is the Fair Work Act 2009. This act sets out the minimum terms and conditions that apply to most employees working in the private sector, extending to the duties of workers and trade unions as well. Other important laws can be found within the Privacy Act 1988, the workplace health and safety (WHS) model, and the Disability Anti-Discrimination Act 1992.

    These acts cover all employees who have any form of employee-employer relationship except as an independent contractor. The Fair Work Act 2009 does provide some protections to independent contractors but laws offering certain industrial protections to this group can be found within the Independent Contractors Act 2006. Employers have a strict obligation to follow all employment laws, especially to provide to employees a safe workplace, free from harassment and discrimination. Employment laws also offer the same level of protections to foreign national who are living and working in Australia on any of the various working visas.

    Notice period laws in Australia

    Notice period laws in Australia

    There are strict laws that outline the required notice period that an employer must provide to their employee for there dismissal. These timeframes are based on the amount of time that an employee has worked for the employer, including any probation time. Notice periods that employers must give to each respective employee includes:

    • Minimum 1 weeks’ notice if an employee has held employment for 0-1 year
    • Minimum 2 weeks’ notice if an employee has held employment for 1-3 years
    • Minimum 3 weeks’ notice if an employee has held employment for 3 – 5 years
    • Minimum 4 weeks’ notice if an employee has held employment for 5 years or above

    There are also specific laws protecting employees who are aged over 45 years and have held employment with an employer for greater than 2 years, they are entitled to 1 extra weeks’ notice at minimum on top of the standard notice periods outlined above.

    If an employer chooses to dismiss an employee immediately, they are required to make a payment in lieu that equates to the same notice period that an employee would be entitled to if not dismissed immediately. There is no legal minimum notice that employees have to give to resign. However many companies stipulate as part of there policy a given timeframe that employees should abide by if they want to resign. The standard time that many companies ask for is 1 month. Employer must provide a written notice for any dismissals.

    Severance laws in Australia

    If an employee is set to be dismissed based on a business related decision such as the role is being made redundant, then an employee is protected in these circumstances as outlined in the National Employment Standards. How much an employee is entitled to depends on their base salary and the years of employment they have served with the employer.  These thresholds are as follows.

    • 0 to 1 year employment = no severance pay-out
    • 1 to 2 years employment = 4 weeks salary
    • 2 to 3 years employment = 6 weeks salary
    • 3 to 4 years employment = 7 weeks salary
    • 4 to 5 years employment = 8 weeks salary
    • 5 to 6 years employment = 10 weeks salary
    • 6 to 7 years employment = 11 weeks salary
    • 7 to 8 years employment = 13 weeks salary
    • 8 to 9 years employment = 14 weeks salary
    • 9 to 10 years employment = 16weeks salary
    • 10 and above years employment = 12 weeks salary as long service leave is paid out on top of this package

    It is possible for redundancy packages to be reduced for the employer only if they can prove they cannot afford the redundancy owed to an employee or the employee actively finds other employment for the employee.

    Hiring in Australia, Made Easy

    Your business can easily hire employees in Australia without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.

    FAQs

    The Fair Work Act 2009 is the most relevant legal document in Australia that has all related laws to employment issues and the employer-employee relationship, and duties of unions. Other important legal documents that employers must adhere to include the Workplace Health and Safety Act 2011, state level and federal even anti-discrimination laws, and the privacy act 1988. There are a dedicated act that outlines certain protections for independent contractors. 

    It is possible to terminate an employee during their probationary period but standard dismissal notice periods still apply and the requirement of a written contract. You can go over the notice period thresholds in the above section under header “Notice period laws in Australia.”

    Employees can terminate their employment during their probationary period. There are no legal minimums in terms of notice periods, however if a company has stipulated a required notice period in the signed employment contract, then it is up to the employee to abide by the agreement.

    It is the same process to terminate an employee’s employment during or after a probationary period has been undertaken. Notice periods may vary however, depending on time employed with the company.

    Success stories from businesses we’ve helped enter and grow in new markets.

    Client Testimonials

    Get started with Horizons