How does employment law affect a business in Australia?

Employment legislation is critical to running a successful business in any country. In Australia, it significantly impacts how businesses run, from hiring to firing and everything in between. 

Let’s discuss how employment law affects businesses in Australia, some key regulations to be aware of, their impact on the workplace, and how you can stay compliant.

Fair Work Act 2009

The Fair Work Act 2009 is the main piece of employment law in Australia. This wide-ranging law includes the National Employment Standards (NES), Modern Awards, and Enterprise Agreements. Employment contracts cannot override the minimum standards set out in the NES, awards or enterprise agreements that apply to employees in a business.

National Employment Standards (NES)

The National Employment Standards (NES) establish 10 types of minimum requirements that apply to all employees in the national workplace relations system. These guidelines address various areas, including maximum weekly hours, leave entitlements, termination notice, and redundancy pay.

The NES gives all Australian workers a basic safety net of employment conditions, no matter what they do or where they work. Employers must follow these standards and can’t offer worse conditions than the NES.

Modern Awards

Modern Awards are industry-specific and occupation-specific instruments that provide additional terms and conditions of employment. They include the minimum wage, overtime pay, penalty pay, and allowances. Employers must ensure they know about any Modern Awards that apply to their industry or employees in particular occupations in their workplace.

Enterprise Agreements

Enterprise Agreements are agreements between employers and employees about the terms and conditions of work at the enterprise level. They can offer better terms than the NES or Modern Awards but meet these minimum requirements.

Key Areas of Employment Law

Employment law covers various areas that businesses need to be aware of, including:

Wages and Conditions

Employers must follow the NES, Modern Awards, and any relevant Enterprise Agreements regarding minimum wage rates and working conditions. If you don’t, you could be taken to court, and ordered to pay compensation and large civil penalties.

Workplace Health and Safety

Businesses are responsible for ensuring their employees have a safe workplace. This means taking reasonable steps to reduce risks, implementing safety policies, and responding quickly to any hazards or accidents. These responsibilities are detailed and often industry and workplace specific.

Discrimination and Harassment

Employment law prohibits discrimination and harassment based on various factors, including race, sex, age, and disability. Employers need to stop this behaviour, deal with complaints, and effectively resolve any concerns. There are also positive duties to prevent this behaviour in many instances.

Termination and Redundancy

When letting an employee go or making them redundant, an employer must follow the rules in the NES and other relevant instruments. This includes giving the right amount of notice, giving redundancy pay, and following a fair dismissal process.

Impacts of Employment Law on Business

The following are some of the ways in which employment legislation impacts businesses in Australia:

Compliance Costs

Ensuring legal employment compliance can be time-consuming and costly. Companies must devote resources to understanding their commitments, updating rules, and training employees on these topics. Noncompliance might result in penalties and legal action, which can be much more expensive in the long term.

Reputation Management

Sticking to employment law can benefit a company’s reputation since it demonstrates a dedication to providing employees with a just and equitable working environment.

A good reputation can help attract and retain top talent and improve customer perception.

Employee Retention and Satisfaction

Businesses that follow employment legislation offer a fair and friendly work environment. This can result in increased employee satisfaction and retention and lower expenses associated with high turnover and recruitment.

Legal Liability

A company’s failure to comply with employment law might result in legal liability. This might include fines, penalties, and even personal culpability for directors or managers in some situations. Maintaining compliance assists in mitigating these risks and protecting the company from potential legal action.

Employment law plays a significant role in shaping the business landscape in Australia. It sets minimum standards for wages, working conditions, and employee rights. It also protects businesses from possible legal liability.

By knowing and following these laws, businesses can make a fair and helpful workplace that is good for both employees and the organisation.

Talk to the experts

Talk to the experts at Taylor & Scott for professional advice and assistance with all aspects of employment law.

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