Australia is an attractive market for foreign-owned companies looking to expand, hire local staff and build a proper on-the-ground presence. However, employing people in Australia involves more than issuing an employment contract and running payroll. Australian employment law is highly regulated, and as an employer, you need to navigate overlapping obligations under the Fair Work Act 2009 (Cth), modern awards, the National Employment Standards, superannuation laws, state and territory leave legislation, work health and safety laws and, in some cases, migration and tax requirements.
For overseas head offices, navigating the modern award system requires a real adjustment. Practices that are commercially standard in another jurisdiction can create risk in Australia if they do not account for minimum entitlements, award coverage, working time rules, payroll compliance and termination protections. Liability also extends beyond the employing entity in some circumstances, including potential personal exposure for company directors and officers where there are serious compliance failures.
The award-based system
A key feature of the Australian employment system is the modern award regime. A modern award is a legally binding industrial instrument made by the Fair Work Commission. It sets minimum terms and conditions for particular industries, occupations or classes of employees.
Modern awards commonly regulate matters such as:
- minimum wage rates;
- classification structures;
- ordinary hours of work and notice periods;
- overtime and penalty rates;
- allowances;
- consultation obligations;
- rostering and span of hours; and
- leave related provisions, including annual leave loading, where applicable.
Modern awards do not apply to every employee. Whether an employee is award covered depends on the nature of your business, your employee’s actual duties, seniority, qualifications, level of responsibility and the specific terms of the award itself. Job title alone is not determinative. This is particularly tricky with professional staff, where it is not always immediately obvious whether an award applies and, if so, which one.
The right to disconnect
Employees in Australia have a mandated “right to disconnect”. In practical terms, this means employees can refuse to monitor, read or respond to work-related contact outside their working hours unless that refusal is unreasonable. This includes a right to turn off emails, phone calls, text messages and workplace messaging apps.
Importantly, the right does not mean you can never contact staff outside ordinary hours. The issue is whether the employee’s refusal to engage with that contact is unreasonable in the circumstances. For international businesses operating across time zones, this creates day-to-day challenges out of hours if it is not handled carefully. It is essential to set clear contractual obligations around availability, urgent contact, meeting times and who is genuinely required to be contactable after hours.
Mandatory retirement contributions: superannuation
As an employer, Australia requires you to make mandatory contributions into your employees’ retirement savings, known as superannuation. From 1 July 2025, the superannuation guarantee rate is 12% of an employee’s ordinary time earnings. Employees may also choose to make additional voluntary contributions, often through salary sacrifice arrangements.
Superannuation must be paid into your employee’s complying superfund each pay day. Failure to pay superannuation correctly or on time will result in superannuation guarantee charge liabilities, interest, administrative penalties and, in some cases, exposure under the Fair Work Act 2009 (Cth), an applicable modern award or enterprise agreement. It also creates personal liability for your company’s directors.
Long service leave
Long service leave is a state-based legislative entitlement that rewards employees for continuous service with the same employer. It is in addition to other leave entitlements and public holidays. As long service leave is primarily governed by state and territory legislation, the relevant rules and entitlements depend on where the employee works.
Continuous service is not always broken simply because an employee takes leave or is away from work for a period. It also usually applies to intra-group transfers including overseas offices. Depending on the jurisdiction, parental leave, workers compensation absences and some periods of unpaid leave may still count, or may not break continuity, particularly where there is an expectation that your employee will return to work.
Long service leave accrues over the course of employment, but the point at which your employee becomes entitled to take or be paid out that leave varies from state to state and depends in part on the circumstances of their departure from your business. Casual employees are also entitled to long service leave if their service has remained continuous, even where their work pattern has been irregular.
Once an employee is entitled to take long service leave, you usually need to agree with your employee when and how the leave will be taken. As a foreign employer, the key point is that you should not treat long service leave as your optional or informal benefit. It is a statutory entitlement and should be built into your payroll, record-keeping and termination planning from the start. Some industries have compulsory, portable long service leave into which you must contribute (e.g. construction, cleaning, hospitality).
Work health and safety and state-based legislation
Work health and safety is another area that catches foreign employers by surprise. Australia’s work health and safety laws are by and large harmonised, but the system is still implemented and enforced at the Commonwealth, state and territory levels and there are nuances between different jurisdictions. In practice, this means you need to understand which regulator and which legislation applies to your Australian operations.
Most jurisdictions have adopted versions of the model WHS laws, but there are local variations and Victoria continues to operate under its own occupational health and safety legislation. This is not just a technical distinction. Different states and territories have different regulators, codes, notification requirements, enforcement approaches and industry-specific rules.
If your business operates across more than one Australian state or territory, a single national WHS policy may not be enough unless it has been checked against the requirements in each relevant jurisdiction. This is particularly important if you operate in higher-risk industries, such as construction, manufacturing, mining equipment, industrial chemicals, health and life sciences, warehousing, logistics or field-based work.
WHS obligations also extend beyond having a handbook on file. You must identify hazards, manage risks, consult with workers, provide appropriate training and supervision, keep records and respond properly when incidents occur. All officers of a business have personal due diligence duties, so overseas directors and senior decision-makers must not assume that Australian safety compliance can be left entirely to local staff. This is important because there is personal criminal liability for duty holders under WHS codes for serious ongoing breaches. In most states, it is illegal to insure against this personal liability (defence costs excluded).
The practical point is simple: before hiring in Australia, you need to work out where your employees will be working, what work they will actually be doing, and which state, territory or Commonwealth WHS rules apply. Getting this right early makes it easier to prepare appropriate employment documents, workplace policies, training processes and incident response procedures.
Unfair dismissal and redundancy
While setting up and hiring new staff is often the exciting part, it is worth taking a moment to ask: what happens if we need to let them go? Australian law gives eligible employees the ability to bring an unfair dismissal claim if they say they were dismissed without a proper reason, without a fair process or in circumstances that were harsh, unjust or unreasonable. Redundancy situations also need to be handled carefully.
Unfair dismissal proceedings are dealt with by the Fair Work Commission. Broadly, the Commission will look at issues such as:
- whether there was a valid reason for dismissal, such as misconduct, ongoing poor performance or genuine operational requirements.
- whether you followed a fair process, including giving your employee a reasonable opportunity to respond to allegations, improve performance or be consulted about a proposed redundancy.
Matters in this jurisdiction are listed for conciliation first, where the parties try to resolve the dispute without a formal hearing.
If a matter does not resolve at conciliation, it proceeds to a hearing before a Commission Member. Evidence may be filed and witnesses may be cross-examined. The Commission can order reinstatement or compensation if it finds the dismissal was unfair.
The jurisdiction is an attractive one for employees as it is a ‘no costs’ jurisdiction. This means that the successful party in the proceedings does not recover their legal costs against the losing party. It means there is little risk for an employee to bring proceedings and these types of claims are common.
How Argyll Law can help
This is a brief overview of Australia’s employment law framework. It is a technical area of law, particularly where you are hiring across multiple states or territories, engaging professional staff, using overseas templates or managing Australian employees from another time zone. It is more complex when considering directors’ duties. As a foreign employer hiring new employees in Australia, it is sensible to deal with these issues early rather than trying to fix them once a dispute or payroll issue has already arisen.
Argyll Law assists with employment contracts, award coverage and classification, workplace policies, superannuation and leave compliance, redundancy planning and managing employee exits in a way that reduces your risk of a claim. If your business is entering the Australian market, or if your existing Australian employment arrangements need a check-up, we help you put practical systems in place before small compliance issues become expensive ones. See our employment law for employers service page for more information.
We’re genuinely pleased if you’ve found this resource useful. However, reading or downloading it does not create a solicitor–client relationship between you and Argyll Law. If you’d like tailored legal advice or to explore whether working together would be the right fit, we’d welcome a conversation.
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