A successful business largely depends on its employees. By creating working contracts that include the right terms and benefits there will be no misconception and the perfect work-life balance can be created. At Bradford Jacobs, this is our aim, and we support companies in over a hundred countries with creating compliant and balanced labor contracts. Our team keeps track of Australian laws and regulations daily to be duly aware of updates that can be implemented in working contracts. By using our PEO and EOR service we can provide compliant labor contracts for employees in Australia, including local benefits.
To support your plans, we made this guide including the basics of employment contracts in Australia. After reading this guide you will know everything about the conditions, laws, and benefits to include in an Australian employment contract..
How Do You Hire Australia Employees?
Foreign companies hiring employees in Australia must operate within an employment framework based on federal and state legislation. The Fair Work Act (2009) and National Employment Standards (NES) are the main legal factors governing employment law in Australia. ‘Modern Award’ and Enterprise Agreements can apply to individual workplaces and companies and are industry- and legislation-based agreements that set minimum pay and conditions. Australia’s Human Rights Act also enforces other regulations in association with several specific acts prohibiting discrimination at all stages of employment.
These considerations come into play during the first stages of hiring and onboarding – drawing up a contract with your new employee. Once Bradford Jacobs’ Professional Employer Organization (PEO) recruitment networks have located the best talent for your company, we step in to give advice on this crucial element of recruitment.
General requirements apply to all contracts. These include:
- New employees must receive a Fair Work Information Statement setting out the essential terms of their role, as soon as possible after beginning work
- Oral agreements are permitted under common law, although written contracts are strongly recommended and should detail essential terms and conditions of employment
- Where work comes under Modern Awards or Enterprise (collective) Agreements, employees should have written confirmation in their contract or job offer specifying the award or enterprise agreement that covers their role
- Workplace agreements, which should exceed minimum limits under National Employment Standards
- Providing copies of company policies on conduct, confidentiality, social media, role and responsibilities, health, and safety, for example
- Contracts are subject to government laws and, in some cases, state legislation
Outsourcing the recruitment and hiring process through Bradford Jacobs’ Professional Employer Organization (PEO) network will give you the security that our in-depth know-how can deal with all these potential problems. Guarantee a trouble-free move into your new territory by trusting our Employer of Record (EOR) services to handle every aspect of payroll compliance.
Types of Employment Contracts in Australia
Under common law, all employees in Australia should have a contract, whether verbal or in writing (which is preferable). Contracts come under Australian Government laws but can also be subject to state and territory legislation.
Workplace (or Enterprise) Agreements set out the rights and obligations between an employer and group of workers. Terms and conditions supplant basic minimums in the National Employment Standards (NES).
Similarly, Awards apply terms and conditions to a particular industry or occupation, and they are also in addition to NES provisions.
Employers and employees also enter into individual contracts. These include:
- Indefinite, Open-ended Employment Contracts: Typically for full-time, permanent employees usually working between 38 and 40 hours each week, on average. They are entitled to written notice or payment in lieu. Terms and conditions can be set by the contract, or by an award or registered agreement. Entitlements include annual, illness and carers’ leave among others.
- Fixed-term Employment Contracts: These apply to a definite time period, say three or six months, or a specific task. Employees can be full- or part-time and are entitled to the same wages and benefits as full-time employees, which may be improved by awards or agreements.
- Part-time Employment Contracts: Generally, for fewer than 38 hours a week but on a regular work schedule, with the same minimum entitlements as full-time employees but adjusted on a pro rata basis.
- Casual Employment Contracts: Tend to work as required without the employer’s commitment to offering future work. To compensate for not having minimum benefits, such as paid illness leave and vacations, their hourly rate is ‘casual loaded’ to a higher hourly rate.
Note: If a full- or part-time contract is mutually changed to casual the same regulations apply as to ending employment. Employees must be given notice of the change and any leave, pay or entitlements must be fulfilled.
Probation Periods: Trial periods typically last between three and six months, during which the individual has the same rights as other employees. If probation is towards full- or part-time work, they accrue rights to paid leave and sickness benefit. If the trial period is unsuccessful, the individual must be given notice and paid for any unused leave.
Apprentice and Trainee Agreements: Individuals enrolled with a Registered Training Organization (RTO) can enter a training agreement with an employer, under guidance of a trained person on a fixed-term basis. Under National Employment Standards (NES) requirements, every employee must receive a copy of the Fair Work Information Statement or a copy of the Casual Employment Information Statement. A contract of employment should cover:
- Full names and addresses of employer and employee
- Start date
- Contract type – indefinite or fixed term for example
- Remuneration and payment schedule
- Place of work
- Outline of employees’ duties
- Maximum hours per week
- Paid vacation entitlement
- Termination, severance, and notice period information
- Which Modern Award or Enterprise Agreements to apply for (if any)
- Company’s policies and procedures