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  • Legal system, currency, language

    Common law jurisdiction with employment laws that operate at both the federal and state levels. Australian Dollar (AU$). English.

  • Corporate presence requirements & payroll set-up

    A foreign entity can engage employees in Australia subject to business, corporate and tax considerations and proper payroll registration. Personal income tax must be paid by employees on their assessable income. However, employers are obliged to deduct tax from an employee's remuneration (called Pay as You Go or PAYG tax withholding) and also to pay 9.5% of salary (which will gradually be increased to 12%) into the employee's superannuation account (a form of pension system).

  • Pre-hire checks

    Required

    Immigration compliance.

    Permissible

    Permitted with applicant's consent and subject to relevant discrimination laws. Offers of employment may be subject to criminal record checks or medical examination (if necessary to determine fitness for a particular job).

  • Immigration

    Foreign nationals must apply for visas to visit, live and work in Australia. Application is through the various immigration programs and visas administered by the Australian Department of Immigration and Border Protection (DIBP).

    The subclass 457 Temporary Work (Skilled) Visa is the most commonly used visa for employers to sponsor foreign nationals who are skilled workers, and where there is a genuine skills shortage, to live and work in Australia for up to 4 years.

  • Hiring options

    Employee

    Individuals can be recruited on either a full-time, part-time or casual basis (which means that they are employed by hour or by day) or a fixed-term contract for a limited duration.

    Independent contractor

    Independent contractors can be engaged directly by the company or via a personal services company.

    Agency worker

    Agency or temporary workers are used widely by some organizations for short periods. Agency staff are not engaged as employees of the business where they are placed on assignment.

  • Employment contracts & policies

    Employment contracts

    A contract can be oral, but written contracts are strongly recommended and all new employees must be given a Fair Work Information Statement containing key terms as soon as possible after the commencement of employment.

    Probationary periods

    Permissible. No statutory limit, but 3-6 months is common.

    Policies

    Not mandatory, but some policies (especially regarding anti-discrimination and harassment, bullying and occupational health and safety) are strongly encouraged by laws and regulations.

    Third-party approval

    No requirement to lodge employment contract or policies with or get approval from any third party.

  • Language requirements

    No statutory requirements.

  • Minimum employment rights

    Employees entitled to minimum employment rights

    Most employees are covered by federal minimum employment rights; a minority derive minimum rights from state jurisdictions.

    Working hours

    38 hours a week, although the employer may require an employee to work reasonable additional hours.

    Overtime

    Overtime payment (or overtime loading) may be required under an applicable award or enterprise agreement.

    Wages

    National minimum wage as of 1 July 2016 is AU$ 672.70 per week or AU$ 17.70 per hour. This is reviewed annually.

    Vacation

    4 weeks' paid annual leave during each year of service accruing progressively. In addition, an employee is entitled to be absent from work on a day that is a public holiday (8 days in total are observed nationally). Casual employees would not normally be paid for their vacation. To make up for this, they receive extra pay, called casual loading.

    Sick leave & pay

    Employees are entitled to take 10 days of paid personal/carer's leave for each year of service. An employee may take the leave if he/she is not fit for work because of personal illness or injury, or to provide support to a member of the employee's immediate family who requires care or support because of personal illness/injury or an unexpected emergency. Casual employees would not normally be paid for their sick leave. To make up for this, they receive extra pay, called casual loading.

    Maternity/parental leave & pay

    Each member of an employee couple (not necessarily employed by the same employer) is entitled to be absent from work for separate periods of up to 12 months in a single continuous period in relation to the birth or adoption of a child. As a result, the couple employees may take up to a total of 24 months' leave between them. However, if only one person is taking leave as opposed to both persons of the couple, or if one member of an employee couple wishes to take more than 12 months' leave, the employee may request a longer period from the employer. The period of extension cannot exceed 12 months less any period of parental leave taken, or intended to be taken, by the other member of an employee couple.

    If both members of the couple are taking unpaid leave, the leave entitlement has to be used in 2 separate periods. However, there are the exceptions of "concurrent leave" and "keeping in touch" days, where the couple is entitled to take up to 8 weeks of unpaid parental leave at the same time.

    A paid parental leave scheme exists, entitling eligible employees to 18 weeks' paid parental leave at the national minimum wage, to be paid by the government via employers.

  • Discrimination

    The characteristics protected under equal opportunity and anti-discrimination legislation in the various states and territories of Australia, as well as in federal legislation, vary slightly from jurisdiction to jurisdiction. The protected characteristics common to all jurisdictions are: race, color, sex, sexual orientation, age, physical or mental disability, marital or relationship status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction, social origin, gender identity, intersex status or trade union membership.

  • Benefits & pensions

    Under the Superannuation Guarantee scheme, employers are effectively required to contribute 9.5% of employees' quarterly "earnings base" to employee superannuation funds. There is a minimum monthly wage that should be paid before an employee is entitled to the 9.5% and a maximum contribution base. Most employers make regular contributions to the employee superannuation fund rather than making lump sum quarterly or annual contributions.

    Australian law also requires that all employers maintain adequate workers' compensation insurance for the benefit of workers injured during the course of their employment.

  • Data privacy

    Australia has very stringent data privacy obligations. As a general rule, personally identifiable data can only be processed if it is required for the performance of the employment contract and constitutes an employee record. Certain acts and practices are exempt from the application of Australia's data privacy laws, but there are strict criteria which must be met for an exemption to apply. Employee records are generally exempt but this exemption will not apply to documents that come into existence prior to the employment relationship (such as pre-employment/hire documentation). At the time it collects personal information, the employer is required to provide the individual with a statement setting out the company's obligations under Australia's data privacy laws and the individual's rights. Further restrictions apply for sensitive personal data.

    The monitoring of individuals and their data is covered by various surveillance legislation in each state/territory. Essentially, surveillance of employees is prohibited in sensitive areas such as washrooms and change rooms, unless the surveillance device is installed pursuant to a warrant or authorization. Surveillance is permitted in public areas if it conforms with relevant legislation. The monitoring of an employee's use of a work computer (emails and Internet browsing) is governed by specific laws in some states.

  • Rules in transactions/business transfers

    At common law, employees cannot be transferred from one employer to another without their consent.

    Under the Fair Work Act, there are rules which apply if there has been a "transfer of business". The transfer of business rules apply when there is a connection between two employers (including the sale and purchase of all or part of a business, certain outsourcing and in-sourcing arrangements and where the two employers are associated entities), the new employer agrees to employ some or all employees of the old employer and there has been no significant change to the work performed by those employees. The main effect of the transfer of business rules is that a transferrable instrument (ie, a collective agreement) that covered the employee before the transfer will continue to apply after the transfer. The Fair Work Commission can make certain orders altering the effect of the transfer of business rules if it deems it appropriate.

  • Employee representation

    Under federal law, employees can choose to be represented by a union or not. As a consequence, any union validly appointed to represent an employee or employees must be recognized and dealt with according to the law. There are no employee representatives or works councils.

  • Termination

    Grounds

    Termination can be brought about: by mutual agreement; upon expiry of a fixed-term contract; by the employer, with or without notice; or termination (resignation) by the employee.

    Who is subject to termination laws

    Employees who have completed 6 months of service with their employer (or 12 months in the case of a small business employer with fewer than 15 employees) and earn less than the high income threshold (currently AU$ 138,900); or who are covered by a modern award or enterprise agreement, are eligible to make a claim for unfair dismissal.

    Prohibited or restricted terminations

    Employers are prohibited from taking "adverse action" (including termination) against other persons because the other person has or exercises a "workplace right," or engages in "industrial activity," or because of a protected attribute. Further protections include a prohibition on an employer dismissing an employee because the employee is temporarily absent from work because of illness or injury.

    Third-party approval for termination/termination documents

    Not applicable.

    Mass layoff rules

    Reporting requirements apply where a decision is made to make 15 or more employees redundant, including notifying the relevant government agency and relevant unions.

    Notice

    Between 1 week and 4 weeks depending on length of continuous employment (although employment contract may specify longer notice period). Where an employee is over 45 years of age and has completed at least 2 years' continuous service, he or she will be entitled to another week's notice.

    Statutory right to pay in lieu of notice or garden leave

    Employer can pay in lieu of notice. No right to garden leave unless specified in the contract.

    Severance

    The entitlement to severance as a result of a termination by reason of redundancy is based on a sliding scale and calculated by reference to the length of the employee's period of continuous service on termination.

    Period of continuous service Pay
    Less than 12 months of service 0
    12 months to less than 2 years of service 4 weeks' pay
    2 years of service to less than 3 years of service 6 weeks' pay
    3 years of service to less than 4 years of service 7 weeks' pay
    4 years of service to less than 5 years of service 8 weeks' pay
    5 years of service to less than 6 years of service 10 weeks' pay
    6 years of service to less than 7 years of service 11 weeks' pay
    7 years of service to less than 8 years of service 13 weeks' pay
    8 years of service to less than 9 years of service 14 weeks' pay
    9 years of service to less than 10 years of service 16 weeks' pay
    10 years and over 12 weeks' pay
    Note: The scale does drop from 16 weeks to 12 weeks. This is an odd historical anomaly that continues to be the case and is usually justified by the employee's entitlement to long service leave after reaching 10 years' service.

    A "week's pay" is generally calculated on the basis of the employee's entire compensation package (including cash equivalent components).

    Service prior to January 1, 2010 is only counted if the employee had an entitlement to redundancy pay under some other instrument.

  • Post-termination restraints

    Those that protect the employer's legitimate business interests can be enforced if reasonable in all the circumstances.

    Non-competes

    Typically no longer than 12 months (with some exceptions).

    Customer non-solicits

    Permissible.

    Employee non-solicits

    Permissible.

  • Waivers

    Enforceable to waive contractual rights. Statutory entitlements cannot be waived or contracted out of.

  • Remedies

    Discrimination

    If an employee thinks they have been subject to "adverse action" (including dismissal) because of a protected attribute, they may apply for a remedy under the Fair Work Act. Remedies include compensation (there is no cap on the amount of compensation that can be awarded) and reinstatement. A civil penalty can also be ordered.

    Compensatory remedies for discrimination can also be sought under Federal or State anti-discrimination legislation. Damages for economic loss and general damages (for hurt and suffering) may be ordered.

    Unfair dismissal

    If the Commission decides that the employee has been unfairly dismissed, it may order the reinstatement of the dismissed employee (with or without back pay) or, if that is not practicable, the payment of compensation up to a maximum of 6 months' remuneration.

    Failure to inform & consult

    An employer who breaches any of the general protections may incur a penalty. Further, an employee, or a union acting on behalf of a member, may seek an injunction to stop the prohibited conduct or seek compensation (noting there is no cap on the amount of compensation that can be awarded).

  • Criminal sanctions

    There are criminal sanctions for breach of relevant work health and safety laws.

  • Key contacts
    Nicholas Turner
    Nicholas Turner
    Partner DLA Piper Australia nicholas.turner@dlapiper.com T +61 2 9286 8522 View bio

Legal system, currency, language

Australia

Common law jurisdiction with employment laws that operate at both the federal and state levels. Australian Dollar (AU$). English.

Austria

Civil law. Member of the European Union (EU), so required to implement relevant EU Directives. Euro (€). German.

Bahrain

Civil law system — employment matters are governed by Law No. 36 of 2012 (Labor Law) as amended. Bahraini Dinar (BHD). Official language is Arabic.

Belgium

Civil law. Member of European Union (EU), so required to implement relevant EU Directives. Euro (€). Dutch, French and German.

Brazil

Civil law. Brazilian Real (R$). Portuguese. 

Canada

Common law throughout the majority of the country, civil law in the province of Quebec. Canadian dollar (CA$). English and French are both official languages.

China

Civil law. Chinese Renminbi (CNY). Mandarin.

Colombia

Civil law. Colombian Peso (COP $). Spanish.

Czech Republic

Civil law. Member of the European Union. Czech Crown (CZK). Czech.

Denmark

Civil law. Danish kroner (DKK). Member of the European Union (EU), so required to implement relevant EU Directives. Danish.

Finland

Civil law. Member of the European Union (EU), so required to implement relevant EU Directives. Euro (€). Finnish and Swedish.

France

Civil law. Member of the European Union (EU), so required to implement relevant EU Directives. Euro (). French.

Germany

Civil law. Member of the European Union (EU), so required to implement relevant EU Directives. Euro (€). German.

Hong Kong

Common law. The Basic Law of the Hong Kong Special Administrative Region (HKSAR) provides that courts of HKSAR may refer to the precedents of other common law jurisdictions when making decisions. Hong Kong dollar (HK$). English and Chinese.

Hungary

Civil law. Member of the European Union (EU), so required to implement relevant EU Directives. Hungarian Forint (HUF). Hungarian.

India

India uses a common law legal system, except in the State of Goa, which has a civil code. Indian Rupee (INR). India is a multi-linguistic country with many languages and dialects across the country. The official languages of the Union Government are Hindi and English. Individual states are able to set their own official language.

Indonesia

Civil law. Indonesian Rupiah (IDR). Bahasa Indonesia.

Ireland

Common law. Member of the European Union (EU), so required to implement relevant EU Directives. Euro (€). English.

Israel

Strong common law heritage with elements from other legal systems. New Israeli Shekel (ILS). Hebrew and Arabic (English commonly spoken).

Italy

Civil law. Member of European Union (EU), so required to implement relevant EU Directives. Euro (€). Italian.

Japan

Civil law. Japanese yen (JPY). Japanese.

Kenya

Common law. Kenya Shilling (KES or Ksh.) Swahili and English.

Kuwait

Civil law — employment matters are governed by Law No. 6 of 2010 (the Labor Law)(as amended). There are also relevant provisions in the Penal Code and Civil Code. Kuwaiti Dinar (KD). Arabic.

Luxembourg

Civil law. Member of the European Union (EU), so required to implement relevant EU directives. Euro (€). French, German and Luxembourgish.

Malaysia

Common law and statute. Malaysian Ringgit(MYR)/Ringgit Malaysia(RM). Malay/Bahasa Malaysia and English.

Mexico

Civil law. Mexican Peso (MX$). Spanish.

Morocco

Civil law, inspired by French law. Moroccan Dirhams (MAD). Official language is Arabic, but French is common for business purposes.

Mozambique

Civil law. Mozambican Metical (MZM). Portuguese.

Myanmar

New civil laws co-exist with the old British colonial laws and regulations, and the laws and regulations issued by the various military governments over the last fifty years. Further, there has been a liberal application over the last few decades of ''policies and practices'', which are not detailed in any laws or regulations and are often unpublished.

Myanmar/Burmese Kyat (MMK).

The official language is Burmese. English has become increasingly popular in the business community. In practice, dual language (Burmese/English) contracts will be required to ensure that all parties understand the contents of the employment contract.

Netherlands

Civil law. Member of the European Union, so required to implement relevant EU Directives. Euro (€). Dutch.

New Zealand

Common law. New Zealand Dollar (NZ$). English.

Nigeria

The legal system in Nigeria consists of a) Nigerian legislation, b) English law, which includes the common law, doctrine of equity and statutes of general application in force in England on January 1, 1900, c) Sharia law (applicable in some parts of the North) and customary law and d) judicial precedent.

Nigerian Naira (N).

English.

Norway

Civil law. Norwegian Kroner (NOK). Norwegian.

Oman

Federal and civil legal system — employment matters are governed by the Oman Labor Law issued by Royal Decree 35/2003 (Labor Law) (as amended). There are also relevant provisions in the Penal Code and Civil Code. Omani Rial (OMR). Arabic.

Poland

Civil law. Member of the European Union (EU), so required to implement relevant EU Directives. Polish zloty (PLN). Polish.

Portugal

Civil law. Member of European Union (EU), so required to implement relevant EU Directives. Euro (€). Portuguese.

Qatar

Federal and civil legal system — employment matters are governed by Law No. 14 of 2004 (the Labor Law) (as amended). There are also relevant provisions in Law No (4) of 2009 (Sponsorship Law).

Companies established in the Qatar Financial Centre (QFC) will be governed by QFC laws and regulations with the primary employment law provisions being contained in QFC Regulation 10 – Employment Regulations and QFC Regulation 11 – Immigration Regulations. This guide focuses on the state labor laws.

Qatari Riyal (QAR). Arabic.

Romania

Civil law. Member of the European Union (EU), so required to implement relevant EU Directives. Romanian Leu (RON). Romanian.

Russia

Civil law. Russian Ruble (RUB). Russian.

Saudi Arabia

Sharia law. Member of the Gulf Coordination Council (GCC), therefore required to implement the relevant GCC laws. Saudi Arabian Riyal (SAR). Arabic.

Singapore

Common law. Singapore Dollar (SGD). English, Chinese, Malay and Tamil. English is the main language of law and business.

Slovak Republic

Civil law. Member of the European Union (EU), so required to implement relevant EU Directives. Euro (€). Slovak.

South Africa

Common law, civil law and customary law, subject to the Constitution. South African Rand (ZAR). 11 official languages: Afrikaans, English, Ndebele, Northern Sotho, Sotho, Swazi, Tswana, Tsonga, Venda, Xhosa and Zulu.

South Korea

Civil law, though court precedents play an important role. South Korean Won (KRW). Korean.

Spain

Civil law. Member of European Union (EU), so required to implement relevant EU Directives. Euro (€). Spanish.

Sweden

Civil law. Member of European Union (EU), so required to implement relevant EU Directives. Swedish Krona (SEK). Swedish language.

Switzerland

Civil law. Not a member of the European Union (EU), but member of the European Free Trade Association (EFTA). Swiss Francs (CHF). German, French, and Italian.

Taiwan

Civil law. New Taiwan dollar (TW$). Mandarin.

Thailand

Civil law, based on various laws and practices, in particular Napoleonic Code and German civil law. Thai Baht (THB). Thai.

Turkey

Civil law. Turkish Lira (TRY). Turkish.

Uganda

Common law. Uganda Shilling (UGX). Member of the African Union (AU), so required to implement relevant AU Directives. English.

United Arab Emirates

Federal and Civil legal system — employment matters are governed by Federal Law No. 8 of 1980 (the Labor Law) (as amended). There are also relevant provisions in the Penal Code and Civil Code. Dirhams (AED). Arabic.

United Kingdom

Common law. Member of the European Union (EU), so required to implement relevant EU Directives. NB In June 2016, the UK voted to leave the EU. The Brexit process was triggered on 29 March 2017 and will take a minimum of two years. British Pound Sterling (GBP or £). English.

United States

Combination of federal statutory law, state statutory and common law, and local statutory law. Regulations vary significantly from state to state. US Dollar ($). English.

Venezuela

Civil law. Venezuelan Bolívar (VEF). Spanish and Venezuelan native languages.

Vietnam

Civil law. Vietnamese Dong (VND). Vietnamese, but English has become increasingly popular in the business community.