Work Culture

Work Culture

To succeed in business in Australia, it is vital for both employers and employees to have a strong understanding of the business culture. As a global PEO (Professional Employment Organization) it is our goal to be familiar and updated with the business culture in the country we work with and in. By sharing our knowledge about Australian work culture, we want to support your global expansion plans. Therefore, we will address all the aspects of the work culture in Australia to start your expansion well-informed.

Work Culture in Australia

Australian professionals seem able to blend a relaxed workplace environment with a strong focus on hard work that produces results. Early starts often go with a willingness to work extra hours, fitting in brief breaks away from their desks or screens for their favorite coffee! A confident and resilient outlook is reflected in an economy ranked 12th in the world with a GDP of two trillion Australia dollars (€1.28 trillion, US$ 1.44 trillion) and a major player among the ‘Pacific Rim’ nations. Australia ranks fourth among Pacific Rim economies while the economic heavyweights of China, US, Japan, South Korea, Thailand, and India also figure as their major trading partners.

The Organization for Economic Cooperation and Development expects to see growth in Australia GDP in 2022, driven by domestic demand. Apart from the significant tourism and services sectors, incoming foreigners will need to be highly qualified for industries such as science and technology, engineering, energy, mining, and healthcare. This combination of a strong economy, low unemployment and high salaries makes Australia massively attractive – but now it is time to ‘get down to business’ so here are a few tips on taking the right steps … and avoiding the pitfalls!

• Communication: Interaction tends to be direct but friendly; opinions are freely given with potentially difficult developments frequently defused with a joke or mild profanity
• Business Meetings: Scheduled meetings start promptly and stick to the allotted time. Arriving late means you are wasting someone else’s time
• Business Environment: The emphasis is on ‘team’’ rather than hierarchy
• Negotiations: These tend to be direct, with all levels encouraged to have an input
• Attitude: Laws on discrimination and guidelines on behavior are expected to be applied in the workplace
• Punctuality: A largely relaxed work environment does not sacrifice punctuality – Australians start work on time to get the job done
• Greetings: Handshakes, a friendly open demeanor and using first names are the best ‘ins’ when initially greeting counterparts for a business meeting
• Dress Code: Suits and dresses are still the norm in the corporate world, with ‘smart casual’ acceptable among creatives. Negotiations also tend to be direct, with everyone encouraged to give an opinion
• Business Meals: In much the same way that Australians like to separate work from family and leisure time, entertaining business clients to lunch or dinner is not typical

Australia Minimum Wage

Australia’s Fair Work Commission’s annual review raised the basic minimum for full-time workers over 21 years old to AU$772.60 (€497, US$567) per week or AU$20.33 (€13, US$15) per hour, from July 2021 until June 2022. Most employees’ minimum wages are set for the industry or sector where they work, by either Modern Awards or Enterprise Agreements; these cannot undercut the statutory national minimum. The national minimum applies to most private companies in Australia that are regulated by the Fair Work Act (2009) and whose employees are covered by the National Employment Relations System.

Part-time employees are paid the same rate, adjusted pro rata for the hours they work. Casual workers are paid ‘casual loading’ above the minimum rate as they are not entitled to benefits such as sick leave or paid vacations.

Probation Periods in Australia

Probation periods generally last between three and six months, during which the individual has the same rights and statutory benefits as full employees. If the trial is for full- or part-time positions the probationer accrues rights to paid leave and sickness benefit. If the trial period is unsuccessful, the individual must be given notice and be paid for any unused leave.

Working Hours in Australia

The Fair Work Act (2009) decrees an employee’s maximum working week is 38 hours, or 7.6 hours each day. The employer can ask an employee to work reasonable extra hours. This depends on whether, for example, there is provision to pay overtime, or whether the extra hours pose a risk to the employee’s health or personal circumstances. Maximum working hours come under the National Employment Standards and apply to all employees covered by the National Workplace Relations System. The maximum period over which working hours can be ‘averaged out’ is 26 weeks, although employers or employees do not have to conclude an averaging out agreement. Working time fits into a ‘span of hours’ typically between 7am and 6pm.

Legislation allows for the following work breaks:

• Between 4 and 5 hours – 10-min break
• Between 5 and 7 hours – 10-min break; 30-60 min meal break
• Between 7 and 10 hours – 2 x 10-min breaks; 30-60 min meal break
• More than 10 hours – 2 x 10-min breaks; 2 x 30-60 min meal breaks

Overtime in Australia

Employers can ask employees to perform reasonable amounts of overtime, above their normal working hours of 38 a week or 7.6 hours per day. If employees are not covered by a Modern Award or Enterprise (collective) Agreement setting out their overtime entitlement, overtime pay will depend on their individual contract. Some award or enterprise agreements allow employees time off in lieu of working overtime, instead of extra pay. Typically, overtime pay may be 1.5 times normal salary for the first two or three hours and twice the normal hourly rate after this.

Notice Periods in Australia

These begin the day after the employer tells the employee they want to terminate employment and end on the final day of work.

Minimum notice periods apply:

• 1 year or less – 1 week
• More than 1 year to 3 years – 2 weeks
• More than 3 years to 5 years – 3 weeks
• More than 5 years – 4 weeks

Employees over 45 years old receive an extra week’s notice if they have been with the employer for at least two years. Awards, contracts, enterprise (collective) agreements may stipulate longer periods of notice, such as one month rather than one week.

Redundancy, Termination /Severance in Australia

These are covered by National Employment Standards (NES). Grounds for termination include mutual agreement, end of a fixed-term contract, termination with or without notice by the employer and resignation by the employee. Employers cannot terminate employment of individuals who have a ‘workplace right’ or take part in lawful ‘industrial activity’. Termination is prohibited on grounds such as race, gender, age, or disability or if the employee is absent due to illness or injury for less than three months in a 12-month period. In the case of 15 or more collective redundancies the relevant government agencies and trade unions must be informed.

On termination, employees’ severance pay should include:

• Outstanding salary or other remuneration
• Pay in lieu of notice of termination
• Accrued annual leave or long service entitlements
• Balance of any time off taken instead of overtime pay
• Redundancy pay, if eligible

Termination due to redundancy entitles employees to severance pay based on years of service:

• Less than 12 months – Zero
• 12 months to less than 2 years – 4 weeks’ pay
• 2 years to less than 3 years – 6 weeks’ pay
• 3 years to less than 4 years – 7 weeks’ pay
• 4 years to less than 5 years – 8 weeks’ pay
• 5 years to less than 6 years – 10 weeks’ pay
• 6 years to less than 7 years – 11 weeks’ pay
• 7 years to less than 8 years – 13 weeks’ pay
• 8 years to less than 9 years – 14 weeks’ pay
• 9 years to less than 10 years – 16 weeks’ pay
• 10 years and over – 12 weeks’ pay*

The reduction in entitlement assumes employee will be eligible for long service benefits after 10 years’ service.

Employees who have six months service with an employer (or 12 months if the employer has fewer than 15 employees) are usually eligible to claim unfair dismissal, if:

• They earn less than the high threshold of AU$153,600 (€98,595, US$110,860)
• They are covered by an awards or enterprise agreement

Employers risk penalties of AU$13,000 (€8,392, US$9,525) per breach for an employee and AU$66,000 (€42,611, US$48,358) per breach for a company if they ignore obligations under workplace legislation.