Employment 2026 Comparisons

Australian law does not expressly distinguish between blue-collar and white-collar workers. Instead, this distinction arises indirectly through various industrial laws and depends on factors such as the nature of the work, the industry and remuneration levels.

The most prominent example is whether an industrial instrument applies. In Australia, these most commonly comprise a collection of instruments known as “modern awards”, as well as collectively bargained “enterprise agreements”.

Modern awards are enforceable industrial instruments made by specialist tribunals, which set terms and conditions for particular classes of employers and employees. Modern awards generally fall into two categories: (1) industry awards, specific to the business’s industry and work type; and (2) occupational awards, applying to employees practising a certain trade or profession, irrespective of the employer’s industry.

Determining whether a modern award applies can be complex but begins with assessing whether the award “covers” the employee and employer. This turns on whether the employee performs work described by the award’s classification structure. All awards contain a list of job titles or families, usually ranging from low-skilled positions to mid-level managerial or supervisory roles (a handful go higher).

Most traditionally “blue-collar” work falls within award classifications. Jobs not covered by an industrial instrument are “award free”, usually associated with white-collar roles. However, overlap exists and assumptions are risky. Failing to provide award entitlements can expose employers to litigated claims and significant civil penalties.

The Fair Work Act 2009 (Cth) (“FW Act”) also limits access to some statutory rights depending on whether the employee is paid below the “high-income threshold”. This threshold is typically associated with white-collar work and can disentitle employees to certain rights usually accessible to blue-collar workers, such as the right to claim unfair dismissal.

There is no general requirement that Australian employment contracts be in writing: wholly oral, partly written or partly oral contracts may be recognised and enforced. However, an applicable award, enterprise agreement or other industrial instrument may require a written contract. While non-compliance may be actionable, such breach will not necessarily make the contract void or voidable.

There is no general requirement that employment contracts contain specific terms. However, as common practice, contracts should identify the commencement date, employment status (full-time, part-time or casual), salary or rate of pay, and notice of termination.

Courts and tribunals commonly recognise implied contractual terms. Employees are generally expected to exercise reasonable care and skill, follow lawful and reasonable directions, provide faithful service and protect confidential information. Employers commonly owe duties of care, indemnification and confidentiality.

Private sector employers must give employees the Fair Work Information Statement when employment starts. The statement, published by the Fair Work Ombudsman, summarises statutory rights under the FW Act, including the National Employment Standards (NES). Additional statements are required for casual and fixed-term employees.

Ongoing and Fixed-Term Contracts

Employment contracts may be either:

• indefinite (often called ongoing); or
• time-limited (often called fixed-term).

The FW Act limits fixed-term contract usage, including by capping a single contract at two years, allowing no more than one renewal or extension within that period, and limiting consecutive contracts for the same or similar work to a collective maximum of two years or no more than two back-to-back contracts. Exemptions exist but are narrow, and non-compliance risks significant civil penalties.

Hours of Work

There is no universal limit on daily working hours. However, industrial awards, enterprise agreements and work health and safety laws may regulate daily hours, spans of work and associated risks. Requiring excessive hours may be unlawful, particularly where it creates a health and safety risk.

The main weekly limit is imposed by the NES in the FW Act, which apply across the national workplace relations system. For full-time employees, ordinary hours are capped at 38 per week, plus reasonable additional hours.

The concept of “reasonable additional hours” provides flexibility but is subject to ambiguity and risk. Greater additional hours may be more reasonable for senior executives than for production or administrative employees, but reasonableness must always be assessed by reference to the employee’s circumstances and any applicable modern award or enterprise agreement, including overtime, span-of-hours or averaging provisions.

Relevant factors include health and safety risks, personal and family circumstances, business needs, compensation reflecting expected additional hours, notice given by either party, usual industry patterns, the nature and seniority of the role, any agreed or award-based averaging arrangement, and any other relevant matter. The weight given to each factor varies and may require balancing.

Contracts and industrial instruments may deal with working hours but cannot exceed the NES limit.

Part-Time Employment

For part-time employees, the NES maximum ordinary weekly hours are are any amount less than a full-time equivalent (that is, less than 38 hours per week). Modern awards and enterprise agreements may provide additional rules about setting days and hours, and when and how these can be amended. As with full-time employees, part-time employees may refuse unreasonable additional hours.

Overtime

Legislation does not prescribe a fixed maximum overtime amount, nor how overtime must be paid. Overtime arrangements are usually set by awards, enterprise agreements or contracts. Rates are commonly expressed as percentage loadings, for example time and a half for initial overtime, double time after that or for weekend/shift work, and higher rates such as double time and a half for public holidays.

Minimum Wages

Most Australian employees are covered by a modern award: an industrial instrument made by the Fair Work Commission setting minimum terms and conditions by industry or occupation. Breaching an applicable award is unlawful and may attract civil penalties. Employers may provide more favourable terms through enterprise agreements and/or employment contracts.

Modern awards prescribe minimum wages for each classification and commonly include penalty rates and loadings for unsociable or additional hours. Award and national minimum wages are reviewed annually by an Expert Panel of the Fair Work Commission. Except in unusual cases, increases operate from the first full pay period on or after 1 July.

Employees not covered by an award or enterprise agreement are covered by the National Minimum Wage Order. From 1 July 2026, the national minimum wage is AUD1,004.90 per week for a 38-hour week, or AUD26.44 per hour. Separate rates apply for junior employees, apprentices, trainees and some employees with disability.

Outside the Annual Wage Review, the Fair Work Commission may vary awards on application or on its own initiative, but only where necessary to meet the modern awards objective and justified by work value reasons, such as the nature of the work, skill or responsibility required, or working conditions.

Employees must receive at least the applicable award, enterprise agreement or national minimum wage base rate. Minimum wage obligations cannot be satisfied by bonuses, allowances or tips. Wages must be paid in money at intervals of no more than one month.

Deductions are permitted where authorised in writing by the employee and principally for the employee’s benefit, or authorised by an industrial instrument or statute. Employers must not require employees to spend or repay amounts where the requirement is unreasonable and directly or indirectly benefits the employer or a related party.

Bonuses, Incentivises, Commissions, Etc

Bonus entitlements are governed by applicable awards, enterprise agreements, employment contracts and employer policies. While bonus schemes are often expressed as discretionary, courts may find a contractual entitlement where objective performance criteria are met, or where regular payments over time establish an implied entitlement through custom and practice.

Like all other remuneration for work, some bonuses must be paid at least monthly while others are paid annually, depending on the source of the obligation. Where a bonus is a contractual benefit tied to specified individual or business targets, it is generally enforceable like any other contractual term. Usually, these bonuses are expressed as discretionary. Amounts vary by industry and seniority, with executives commonly receiving substantial performance-based bonuses. Executive contracts, particularly within regulated industries (such as the banking, finance and insurance industry) increasingly include clawback or malus provisions for misconduct or misstated results.

Annual Leave

All employees (except casuals) are entitled to at least four weeks’ paid annual leave each year, with an additional week for shift workers as defined by an applicable industrial instrument. Annual leave accrues progressively based on ordinary hours worked, carries over year to year, and is paid out on termination if untaken. Statutory annual leave is paid at the employee’s base rate for ordinary hours, excluding overtime, penalty rates and allowances. Modern awards, enterprise agreements and contracts may address annual leave but cannot reduce the statutory entitlement.

Sick Leave

All employees (other than casuals) are entitled to ten days’ of paid personal/carer’s leave each year. This leave may be taken where:

• the employee is unable to work because of personal illness or injury; or
• the employee needs to care for an immediate family or household member who is ill, injured or affected by an unexpected emergency.

Personal/carer’s leave accrues progressively during the year and unused leave accumulates indefinitely. However, unlike annual leave, unused personal/carer’s leave is not paid out on termination.

Paid personal/carer’s leave is paid at the employee’s base rate for ordinary hours they would otherwise have worked, excluding overtime, allowances and other additional entitlements.

All employees, including casuals, are also entitled to two days’ unpaid carer’s leave for the same circumstances. This may be taken as often as needed, but employees must first exhaust available paid personal/carer’s leave.

Public Holidays

All employees (except casuals) are entitled to be absent on a public holiday and paid at their base rate for ordinary hours they would otherwise have worked. This does not apply where the employee would not ordinarily work on that day, including where a part-time employee’s agreed hours do not include the holiday.

Parental Leave

Employees with at least 12 months’ continuous service may take up to 12 months’ unpaid parental or adoption leave for a child in their care, and may request a further 12 months, refusable only on reasonable business grounds.

Spouses or de facto partners may each take separate 12-month periods, up to 24 months combined.

Employees adopting a child may take up to two days’ unpaid pre-adoption leave for required interviews or examinations. Unpaid special parental leave is also available where an employee is unfit for work due to pregnancy-related illness, or where the pregnancy ends within 28 weeks of the expected birth date and the child does not survive.

Parents experiencing stillbirth or infant death within 24 months of birth are entitled to two days’ paid compassionate leave and up to 12 months’ unpaid leave. Employers must not cancel parental leave because of stillbirth or infant death.

Unpaid parental leave may be taken while receiving statutory or employer-paid parental leave.

Separately, the federally funded Parental Leave Pay scheme provides paid leave for eligible carers of a newborn or newly adopted child.

Employers may also offer paid parental leave by policy, but this is only mandatory if incorporated into an enforceable contract, enterprise agreement or other instrument.

Long Service Leave

Long service leave entitlements are primarily governed by state and territory legislation, although more beneficial entitlements may be negotiated and included in an enterprise agreement or contract. While details vary across jurisdictions, the core entitlement is consistent: employees receive additional paid leave after substantial service, usually between seven and ten years.

Some industries have portable long service leave schemes, notably construction, coal mining and community services. These schemes recognise extended service within the industry rather than continuous service with a single employer.

Accrued but untaken long service leave is generally paid out on termination once the employee has completed the relevant minimum service period.

Other Leave Types

The FW Act provides for several additional forms of leave for specific circumstances, including the following:

• Family and domestic violence leave: All employees, including casuals, are entitled to ten days’ paid family and domestic violence leave each year. The leave is available where an employee needs to deal with family or domestic violence and it is impracticable to do so outside ordinary working hours. It does not accumulate year to year.
• Compassionate leave: Employees are entitled to two days’ compassionate leave per occasion when an immediate family or household member contracts a life-threatening illness or injury, or dies. Non-casual employees are paid at their base rate for ordinary hours; casuals may take unpaid compassionate leave.
• Community service leave: This covers two categories: (1) unpaid leave for voluntary emergency management activities, such as natural disaster relief, for as long as reasonable; and (2) leave for jury service, with payment for up to ten days.

Limits on Confidentiality and Non-Disparagement

While there is no general prohibition on non-disparagement terms, there are limitations on confidentiality.

Employees in Australia owe an implied duty of fidelity, requiring them not to misuse or disclose confidential information obtained through employment. This duty may be supplemented by express contractual confidentiality obligations, commonly included in contracts for senior, managerial and professional employees. Statutory protections may also apply to prevent misuse of confidential information.

Not all information acquired at work is protected. Only genuinely confidential information, or information expressly defined as confidential in an employment contract, attracts legal protection. Protection is more likely where the employer has clearly identified information as confidential, restricted access to it, or treated it as sensitive. Widely circulated or publicly available information is unlikely to qualify.

Misuse or unauthorised disclosure of confidential information during employment may constitute breach of contract and justify disciplinary action, including termination. Employers may also seek injunctions to prevent further disclosure and damages for resulting loss.

Different considerations apply after employment ends, as the former employee no longer owes an implied duty of fidelity but continues to owe a duty of confidence.

Additionally, employees have a protected statutory right to disclose their remuneration and any terms reasonably necessary to determine remuneration outcomes. They may also ask other employees about their remuneration. Employers cannot contract on terms inconsistent with these rights; such terms are of no effect and cannot be enforced.

During Employment

The duty of fidelity prevents employees from competing with their employer during employment, but does not prohibit all outside work or business activities.

Permissibility depends on seniority, the nature of the role and outside work, the risk of misusing confidential information, and whether the activity was disclosed to the employer.

Employment contracts commonly restrict outside work or require prior approval, particularly for managerial and professional employees.

Breach of the duty of fidelity may entitle the employer to injunctive relief or damages and may justify termination.

Post-Employment

The common-law doctrine of restraint of trade prevents employers from restricting all competition by former employees. However, post-employment restraints may be enforceable where necessary to protect a legitimate business interest, such as confidential information or goodwill, and reasonable in the interests of both parties and the public.

Restraints may be included in an employment contract or a separate agreement, or introduced during employment, although separate consideration should generally be provided where a restraint is added after employment commences.

To be enforceable, a restraint must go no further than reasonably necessary to protect the employer’s legitimate interests. If overly broad, it may be held unenforceable. The employer bears the burden of establishing reasonableness, assessed at the time the restraint was agreed.

Relevant factors include: the nature, size and scale of the employer’s business; the importance of customer relationships and goodwill; the employee’s seniority and bargaining power; access to confidential information; and relationships with customers, suppliers and other employees.

There are no fixed rules on duration or scope. Restraints of three to six months are commonly accepted, while longer periods may be justified for senior employees. Appropriate duration often depends on how long confidential information remains valuable or how long it takes the employer to replace the employee’s influence and relationships.

Employers most commonly seek injunctions to prevent ongoing breaches, although damages and other remedies may also be available. Relief may be sought against former employees and third parties, such as new employers.

Courts will not rewrite an unreasonable restraint, but may sever unenforceable provisions where the remainder can operate sensibly. In New South Wales, courts are uniquely empowered to modify a restraint to make it reasonable, although no equivalent legislation exists in other Australian jurisdictions. In 2027, the Australian Government will likely introduce laws prohibiting non-compete clauses for employees earning under the high-income threshold.

The same considerations that apply to non-compete clauses apply to non-solicitation: a restraint must go no further than reasonably necessary to protect the employer’s legitimate interests.

Non-solicitation restraints are generally more readily enforced than non-compete restraints, particularly where they prohibit active solicitation rather than all dealings with customers, suppliers or employees.

Privacy Laws in Relation to Employees

The Australian Privacy Principles (APPs) under the Privacy Act 1988 (Cth) regulate the collection, use and handling of personal information. They apply to Australian Government agencies, private health service providers and most private sector organisations with annual turnover exceeding AUD3 million. Additional protections apply to sensitive information.

Employee records are generally exempt from certain privacy law requirements when handled by an employer in relation to a current or former employment relationship. Employee records include payroll records, hours worked, leave records and superannuation contributions.

Since 10 June 2025, Australian law has recognised a statutory cause of action for serious invasions of privacy. This allows individuals, including employees, to seek compensation where their privacy has been seriously invaded. The court must be satisfied that the public interest in protecting the individual’s privacy outweighs any competing public interest in the conduct.

Collection, Storage and Usage

Employers may collect, use and process employee information where it is directly related to the employment relationship and forms part of an employee record. Such records may benefit from the employee records exemption under privacy legislation.

Where the exemption does not apply, the collection, use and handling of personal information must comply with the APPs, including obtaining consent for sensitive information. The APPs establish standards governing:

• the collection, use and disclosure of personal information;
• privacy governance and accountability;
• data quality, security and correction; and
• individuals’ rights to access and correct their personal information.

Organisations subject to the APPs must handle personal information openly and transparently and, except in limited circumstances, must not use or disclose personal information for direct marketing without consent.

Employers should understand the scope of the employee records exemption and implement appropriate privacy policies and practices for handling employee information.

Surveillance and Monitoring

Employee monitoring in Australia is regulated primarily at the state and territory level, with important differences between each jurisdiction.

Surveillance laws govern:

• cameras and video surveillance;
• computer surveillance, including email and internet monitoring; and
• tracking devices, such as GPS technology.

Covert surveillance is prohibited unless authorised by a court order, typically available only where unlawful activity is suspected.

The legislation also restricts where surveillance may occur. Certain areas, including bathrooms and changing rooms, are expressly excluded.

Legislation, employment contracts, polices and (where required) consent need to work together to enable lawful surveillance and monitoring.

Employers seeking to engage foreign workers in Australia must ensure the worker holds a valid Australian visa with work rights and that the proposed role is permitted under the visa conditions. Employers should verify work rights before employment commences and continue monitoring throughout employment, particularly for temporary visa holders.

Foreign workers must demonstrate they are authorised to work in Australia under a valid visa. Some visas impose specific conditions, such as restrictions on hours worked within a fortnight or limitations on working for the same employer beyond six months. Employers must understand and ensure compliance with the conditions attached to each worker’s visa at an operational level. Foreign workers must also comply with all applicable visa conditions.

Key limitations include the following:

• Evidence of valid visa: Employers should require the foreign worker’s current visa and consent to undertake a current Visa Entitlement Verification Online (VEVO) check to confirm working rights.
• Visa conditions: The foreign worker may be restricted as to the type of work, hours, employer, occupation or location.
• Sponsorship requirements: For employer-sponsored visas, the employer may need to be an approved sponsor and nominate an eligible genuine position.
• Occupation and skills requirements: Sponsorship is generally limited to eligible occupations, and the worker may need to meet qualifications, experience, English language, licensing or registration requirements.
• Salary and employment terms: Foreign workers must receive at least the same minimum workplace entitlements as Australian workers. Sponsored workers must also be paid the applicable market salary rate and meet any relevant income threshold.
• Role changes: Changes to duties, location, hours, employer or employment arrangements may trigger further immigration requirements, notification obligations or new applications.
• Cost and exploitation restrictions: Employers must not recover certain sponsorship costs from the worker, require payment for sponsorship, exploit the worker’s visa status or threaten visa cancellation.
• Monitoring obligations: Sponsors may have ongoing record-keeping and reporting obligations to the Department of Home Affairs. Non-compliance can result in infringement notices, civil penalties, cancellation of sponsorship approval, bars on further sponsorship, reputational damage and, in serious cases, prosecution.

There is no single universal foreign worker registration requirement applying to all employers in Australia. Requirements depend on the engagement arrangement, visa pathway and work location.

Registration requirements are determined by the relevant visa. Key requirements include the following:

• VEVO checks: Employers should verify foreign workers’ rights through VEVO before employment starts and regularly recheck where the visa is temporary, is expiring or changes.
• Sponsor approval: To sponsor a foreign worker, the employer may need approval from the Department of Home Affairs as a standard business sponsor before nominating the position.
• Nomination approval: For employer-sponsored visas, the role usually needs to be nominated and approved before, or as part of, the visa process.
• Labour hire licensing: If foreign workers are engaged through a labour hire provider, licensing requirements may apply in some Australian states and territories. Businesses should confirm whether the provider is licensed where required.
• Industry registration: Separate registration, licensing or accreditation may apply depending on the worker’s occupation, such as health, trade, security, construction, education or transport roles.
• Migration advice: Anyone providing immigration assistance must be properly authorised, such as a registered migration agent or Australian legal practitioner. Employers should confirm work rights, sponsor status, labour hire licensing and any occupation-specific registrations before commencement. Failure to do so may create immigration, employment, regulatory and reputational risk.

Since 2020, remote work has gained increasing popularity among employees. Conversely, employers are increasingly seeking to compel workers to return to traditional workplaces. This tension is now a common source of dispute.

There is no general right to work remotely in Australia (although legislative reforms proposing such a right have recently been proposed in Victoria). Whether an employee may work remotely is generally at the employer’s discretion, subject to applicable workplace policies or contractual arrangements.

However, employees may in certain circumstances require an employer to permit remote working. The FW Act gives certain employees the right to request “flexible working arrangements”, which may include an enforceable entitlement to work from home where necessary to accommodate their circumstances.

To be eligible, an employee must have at least 12 months’ continuous service (with additional requirements for casuals) and fall within a prescribed category. These include employees who are pregnant, have parental or caring responsibilities for a school-aged child, an elderly person or a person with a disability, have a disability themselves, are aged 55 or older, are experiencing family or domestic violence, or provide care or support to a family member experiencing such violence.

The FW Act prescribes the process for making and responding to requests. Both the request and the employer’s response must be in writing. Employers must also discuss the request with the employee and provide a written decision within 21 days.

An employer may refuse a request only on “reasonable business grounds”. Relevant considerations include the cost of implementation, the capacity of other employees to accommodate the change, whether the arrangement would be impracticable, or whether it would significantly affect service delivery, efficiency or productivity. The threshold is relatively high. Minor or manageable impacts will generally not justify refusal, nor will a blanket policy preference against remote working.

Where a request cannot be fully accommodated, employers must genuinely attempt to identify alternative arrangements that address the employee’s needs as far as reasonably practicable. For example, while a fully remote arrangement may not be feasible, a hybrid arrangement combining office-based and remote work may be.

Employees may challenge a refusal by bringing a dispute before the Fair Work Commission, which may determine the dispute and make binding orders regarding applicable working arrangements.

Work health and safety obligations also extend to remote work environments. Under the model work health and safety laws, employers have a duty to ensure, so far as is reasonably practicable, the health and safety of workers while at work.

This duty applies regardless of whether work is performed in a traditional workplace or from home. Employers must identify hazards, assess risks, implement controls to eliminate or minimise those risks, and regularly review their effectiveness. Where an employee works from home, the home environment must be considered as part of the employer’s safety management processes. Non-compliance may expose employers to criminal liability, including substantial financial penalties and, in serious cases, imprisonment.

There is no right to sabbatical leave in Australia. Such arrangements must be privately negotiated and would be treated as authorised unpaid leave. Taking such leave could affect the accrual of certain entitlements, as most leave accrues progressively based on length of service and continuous service.

The “gig economy” has been an increasing source of work in Australia, particularly for vulnerable persons such as migrants and young workers. Gig work typically falls outside the usual employer/employee paradigm, with such workers understood to be independent contractors not entitled to many statutory and regulatory protections afforded to employees.

Recent amendments to the FW Act allow the Fair Work Commission to issue “Minimum Standard Orders” setting enforceable rights and benefits for “employee-like workers” or regulated road transport contractors.

Several applications are before the Fair Work Commission regarding common forms of gig work, such as on-demand passenger transport and last-mile delivery. These applications are well progressed and are expected to result in orders covering minimum pay, cost recovery, leave entitlements and insurance requirements. Such orders will be binding on the businesses engaging these workers.

Role and Statutory Protections

Trade unions play an important role in Australia’s social, political and industrial landscape, and remain central to workplace relations law and regulation.

The FW Act gives unions statutory rights, including rights of entry to workplaces and protections against victimisation for union membership or activities. Some states, including Western Australia, confer additional union rights through jurisdiction-specific legislation.

Employees have a statutory right to freedom of association, meaning they may choose whether to join a union and are generally entitled to union representation in employment-related discussions. Modern awards and enterprise agreements must include workplace delegate rights, which employers cannot infringe.

The Fair Work Commission oversees union registration and regulation. While registration is not compulsory, only registered unions can fully access rights under the FW Act, so very few unions operate outside the statutory framework.

Industrial Action

Australian law does not recognise a general right to strike. Industrial action is generally unlawful under both common law and statute, unless it falls within the protected industrial action framework in the FW Act. Under that framework, employees and unions may take protected industrial action only to support claims in bargaining for an enterprise agreement applying to that workplace.

Where industrial action is protected, those who organise or participate in it are generally shielded from liabilities that would otherwise arise.

To be protected, the action must be approved through a compulsory protected action ballot. This requires obtaining permission from the Fair Work Commission to conduct the ballot, and if a ballot order is made, the Commission must hold a conciliation conference between the bargaining representatives before the ballot is scheduled.

Unlike many European countries, Australia does not have a formal system of works councils. While many workplaces have joint employer, employee and union consultative committees, these lack formal legal status. Their decisions have no legal effect unless a relevant enterprise agreement specifically provides otherwise.

The FW Act establishes enterprise bargaining, under which employers and employees can make enterprise agreements governing workplace terms and conditions.

Employers may be required to bargain where a majority of employees wish to do so, and the Act imposes good-faith bargaining obligations. While employers need not reach agreement, the Fair Work Commission can intervene in protracted bargaining disputes.

Where bargaining becomes intractable, the Fair Work Commission may issue an intractable bargaining declaration and, if negotiations remain unsuccessful, make a workplace determination resolving outstanding issues with binding terms.

Unions are the default bargaining representatives for their members. Although not always party to an enterprise agreement, they may:

• elect to be bound by an agreement if they acted as a bargaining representative;
• enforce approved enterprise agreements; and
• represent members in disputes, including unfair dismissal, discrimination and victimisation matters.

Enterprise agreements become enforceable once approved by the Fair Work Commission. Although agreements can have a nominal term of up to four years, they continue to operate until replaced or terminated.

An employer can generally terminate employment:

• on grounds of conduct, performance or capacity;
• where the role is no longer required to be performed by anyone due to changes in the employer’s operational requirements; or
• in accordance with common-law contractual principles (provided there is a valid, defensible and lawful reason to do so).

Conduct, Performance or Capacity

Conduct relates to an employee’s behaviour, generally involving actions or incidents that may affect the employer’s ability to maintain trust and confidence in the employee.

Performance relates to whether an employee is performing the duties of their role to the required standard.

Capacity relates to whether an employee is fit and able to perform the inherent requirements of their role.

Employers should note that a termination may be unlawful if influenced by a prohibited reason or unfair if the employer fails to follow a procedurally fair process.

Redundancies

Where a role is no longer required to be performed due to changes in operational requirements, employment may be terminated for redundancy.

Australian law imposes consultation obligations for collective redundancies. Where an employer proposes to dismiss 15 or more employees for economic, technological, structural or similar reasons, it must notify and consult any relevant union that it could reasonably be expected to know has affected employees as members.

Consultation obligations may also arise under modern awards and enterprise agreements. Modern awards generally require consultation about significant workplace changes, while enterprise agreements must contain a term requiring consultation with employees and, where applicable, their representatives about major workplace changes likely to significantly affect them. These obligations commonly apply to collective redundancies regardless of employee numbers.

Generally, consultation provisions obligate the employer to:

• notify affected employees and any representatives;
• recognise any employee-appointed representative;
• consult with affected employees as soon as practicable about the change, its likely impact, and measures to avoid or minimise adverse effects;
• provide relevant written information about the change and its expected impact (excluding confidential or commercially sensitive information); and
• genuinely consider issues and concerns raised by affected employees.

In addition to consultation obligations, employers must notify public authorities where they decide to dismiss 15 or more employees for economic, technological, structural or similar reasons. In particular, the employer must provide written notice to the Chief Executive Officer of Services Australia (Centrelink) as soon as practicable after the decision and before the dismissals take effect.

An employee whose position is made redundant will generally be entitled to a redundancy payment. Enterprise agreements commonly address this, subject to the following statutory minimums:

• between one and two years’ continuous service – four weeks’ pay;
• between two and three years’ continuous service – six weeks’ pay;
• between three and four years’ continuous service – seven weeks’ pay;
• between four and five years’ continuous service – eight weeks’ pay;
• between five and six years’ continuous service – ten weeks’ pay;
• between six and seven years’ continuous service – 11 weeks’ pay;
• between seven and eight years’ continuous service – 13 weeks’ pay;
• between eight and nine years’ continuous service – 14 weeks’ pay;
• between nine and ten years’ continuous service – 16 weeks’ pay; and
• more than ten years’ continuous service – 12 weeks’ pay.

The FW Act sets out minimum notice periods employers must give:

• one year or less continuous service – one week;
• between one and three years’ continuous service – two weeks;
• between three and five years’ continuous service – three weeks; and
• more than five years’ continuous service – four weeks.

Employees over 45 years of age with at least two years’ continuous service are entitled to an additional week of notice.

A contract, modern award or enterprise agreement may provide for a different notice period, provided it is not less than the statutory minimum.

There is no statutory minimum notice period employees must give on resignation. Some contracts, awards and enterprise agreements set minimums and allow employers to offset some loss if insufficient notice is given.

Where a contract does not specify a notice period, the common law generally implies a term requiring reasonable notice. What constitutes reasonable notice depends on the circumstances, including the employee’s age, length of service, seniority and responsibilities, the likely ease or difficulty of obtaining comparable employment, and any significant opportunities or benefits relinquished to accept the position. For older employees, senior executives and those with long service, reasonable notice can be substantial, with periods of six to 12 months not uncommon.

The law describes conduct constituting serious misconduct that entitles an employer to terminate without notice. This includes:

• wilful or deliberate behaviour that is inconsistent with the continuation of the contract of employment;
• conduct that causes serious and imminent risk to personal health or safety or to the reputation, viability or profitability of the employer’s business;
• engaging in theft, fraud, assault or sexual harassment in the course of the employee’s employment;
• being intoxicated at work; and
• refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.

As with all terminations for cause, employees alleged to have engaged in serious misconduct must generally still be afforded procedural fairness before any final decision. They must also generally be informed of the reason and given an opportunity to respond as to why termination should not occur.

Termination agreements are permissible but not necessary. They are often used to resolve disputes relating to the end of employment and are commonly presented as a Deed.

Standard terms routinely include:

• releases from all claims relating to the employment relationship, underlying legal instruments, circumstances leading to the dispute, and any entitlements (other than superannuation and some workers’ compensation claims, which are exempt);
• confidentiality over the circumstances leading to the dispute and terms of settlement; and
• non-disparagement.

Victorian legislation prohibits employers entering into confidentiality terms where the subject matter concerns sexual harassment (unless the employee specifically requests confidentiality and other conditions are met).

Employers are expressly prohibited from dismissing employees in limited circumstances, namely the following:

• Adverse action, including dismissal: Employers must not dismiss an employee because the employee has a workplace right, or exercises or proposes to exercise such a right.
• Union membership: Employers must not dismiss an employee because the employee is an officer or member of an industrial association.
• Engaging in industrial activities: Employers must not dismiss employees because they have or propose to engage in industrial activity, including protected strike action.
• Temporary absence due to illness or injury: Employers must not dismiss employees if they are absent for a total period of three months or less within a 12-month period, if the absence is due to illness or injury.
• Other: There are other restrictions under state and territory legislation, including relating to dismissing injured workers (workers’ compensation), dismissing workers with protected attributes (anti-discrimination legislation) and dismissing workers who have exercised safety entitlements (work health and safety legislation).

Unfair Dismissal

Employees covered by a modern award or enterprise agreement, or earning less than the high-income threshold (currently AUD190,100), may apply to the Fair Work Commission for an unfair dismissal remedy.

An employee is dismissed if the termination occurred at the employer’s initiative, or the employee was forced to resign because of the employer’s conduct.

However, an employee cannot bring an unfair dismissal claim if:

• the employee was employed for a specific period, task or season, and the employment terminated at its end;
• the employee was subject to a time-limited training arrangement that has ended;
• the employee was demoted but remains employed without a significant reduction in remuneration;
• the employee has not met the minimum employment period: 12 months’ continuous service for small business employers (fewer than 15 employees) or six months for all other employers;
• the employer was a small business and adhered to the Small Business Fair Dismissal Code; or
• the dismissal was a genuine redundancy – that is, the dismissal was because:
1. the employer no longer required the job to be performed by anyone due to changes in operational requirements;
2. the employer complied with any consultation obligations in a modern award or enterprise agreement; and
3. it was not reasonable in all the circumstances to redeploy the person within the employer’s enterprise or an associated entity.

Additional considerations apply to casual employees’ eligibility for unfair dismissal claims, including whether they worked on a regular and systematic basis for a sufficient period.

A dismissal may be unfair if there was no valid reason for termination or if it was harsh, unjust or unreasonable. In determining this, the Fair Work Commission must consider:

• whether there was a valid reason for dismissal relating to the employee’s capacity or conduct (including impact on other employees’ safety and welfare);
• whether the employee was informed of that reason;
• whether the employee was given an opportunity to respond;
• whether the employer unreasonably refused to allow the employee a support person during dismissal-related discussions;
• in performance-related cases, whether the employee had been warned about performance concerns before dismissal;
• the extent to which the employer’s size affected the procedures followed;
• the extent to which the absence of dedicated human resources expertise affected the procedures followed; and
• any other matters the Fair Work Commission considers relevant.

If successful, the employee may be awarded only one of two remedies:

• reinstatement, with or without back pay; or
• compensation of up to six months’ pay.

The Fair Work Commission will generally attempt conciliation before a hearing. If the matter proceeds to hearing, it may be conducted formally or through a determinative conference. The rules of evidence do not apply, and parties seeking legal or paid agent representation must first obtain the Commission’s permission.

Adverse Action Involving Dismissal

Employees may bring a “general protections” claim if an employer takes adverse action against them for a prohibited reason, including that the employee:

• has, has exercised or proposes to exercise a “workplace right” (which includes where the employee is able to make a complaint or inquiry in relation to their employment);
• is or is not a member of a union or other industrial association; or
• engages, or declines to engage, in industrial activity.

General protections claims are not limited to the employer entity. Anyone “involved in” the contravention can be jointly liable, including both natural and corporate persons.

To succeed, the employee must establish that the adverse action was taken because of a prohibited reason. These claims turn on the employer’s reasons for its conduct. Employers must also overcome a statutory presumption that the action was taken for a prohibited reason.

Claims commence in the Fair Work Commission with mandatory conciliation. If unresolved, the employee can proceed to a court of competent jurisdiction (usually the Federal Court of Australia or the Federal Circuit and Family Court). Available relief includes:

• declaratory relief;
• reinstatement of employment;
• compensation and damages for loss suffered (including economic and, in appropriate cases, non-economic loss);
• aggravated damages (in appropriate cases); and
• civil penalties, which are typically payable to the Commonwealth (unless ordered otherwise), with the current maximum per contravention being:

1. for an individual – AUD21,840 (or AUD218,400 per contravention for some “serious contraventions”);

1. for a company with fewer than 15 employees – AUD109,200 (or AUD1,092,000 per contravention for some “serious contraventions”); and

1. for a company with 15 or more employees – AUD546,000 (AUD5,460,000 per contravention for some “serious contraventions”).

Protected Attributes

Australia has comprehensive anti-discrimination laws at both federal and state or territory levels. While the legislative regimes differ in detail, they pursue broadly similar objectives and operate concurrently.

Federal anti-discrimination legislation prohibits discrimination in employment on a range of protected grounds, including:

• sex, sexual orientation, gender identity, intersex status, marital or relationship status, family responsibilities, pregnancy and breastfeeding;
• disability, behaviour that is a symptom or manifestation of disability, medical conditions or work-related injuries;
• race, colour, descent, national or ethnic origin, and immigrant status; and
• age.

Together, these laws provide broad protection against discrimination and adverse treatment in employment across Australia.

All Australian anti-discrimination laws contain exceptions and exemptions permitting certain otherwise discriminatory conduct. While these vary between jurisdictions, common exceptions include conduct authorised by law, based on genuine occupational requirements, necessary for religious practices, advancing charitable objectives, relating to voluntary association membership, protecting health, safety or property, supporting accommodation for older persons, promoting substantive equality, or covered by a temporary exemption granted by a relevant authority.

The availability and scope of these exceptions differ across Australian jurisdictions and must be assessed by reference to the applicable legislation.

Direct and Indirect Discrimination

Australian anti-discrimination laws prohibit both direct and indirect discrimination.

Direct discrimination occurs when a person with a protected attribute is treated, or proposed to be treated, less favourably than a person without that attribute in the same or materially similar circumstances. The comparator need not be real; courts and tribunals may use a hypothetical comparator.

Indirect discrimination generally occurs where a requirement, condition or practice disadvantages people with a protected attribute and is not reasonable in the circumstances. For example:

• Requiring all employees to attend an in-person meeting on a fixed day each week may disadvantage employees with family or caring responsibilities who work part-time.
• Requiring all male employees to be clean-shaven may disadvantage individuals whose religious beliefs require them to wear a beard.

However, an otherwise indirectly discriminatory requirement may be lawful if reasonable and necessary, such as where justified by legitimate health and safety requirements.

Sexual Harassment

Under federal law, sexual harassment occurs where a person makes an unwelcome sexual advance or request for sexual favours, or engages in other unwelcome conduct of a sexual nature, and a reasonable person would anticipate the conduct could offend, humiliate or intimidate the recipient. Whether conduct is unwelcome is assessed from the recipient’s perspective.

Federal legislation prohibits sexual harassment in the workplace and imposes a positive duty on employers and persons conducting a business or undertaking (PCBUs) to take reasonable and proportionate measures to eliminate sexual harassment, so far as possible. Similar protections exist under state and territory laws.

Sexual harassment may also give rise to claims under workplace health and safety, workers’ compensation, unfair dismissal, anti-discrimination and general protections laws. Employees may, in some circumstances, also pursue compensation through contractual or common-law claims.

Burden of Proof

The standard of proof in discrimination and employment-related claims is the balance of probabilities.

In most discrimination claims, the complainant bears the burden of proving that the conduct occurred in a protected area (such as employment), that they were treated less favourably than a comparable person without the protected attribute, and that the attribute was a significant reason for that treatment.

However, the burden is reversed in certain cases, including claims under the general protections provisions and most indirect discrimination claims under federal anti-discrimination laws. In those cases, once the complainant establishes the relevant conduct, the respondent must prove the action was not taken for a prohibited reason, or that the relevant requirement or condition was reasonable.

A respondent relying on a statutory defence, exception or exemption also bears the burden of establishing that it applies.

Consequences of Breach

Successful claims under federal anti-discrimination laws can result in:

• declaring that the respondent committed unlawful discrimination;
• restraining the respondent from repeating or continuing misconduct;
• orders for the payment of compensation, with no upper limit on the quantum; and
• any such order “as the court considers appropriate”.

If the claim is brought under the FW Act, relief can also include civil penalties.

The Fair Work Commission may allow parties to attend hearings and conferences by telephone or video link where appropriate, including where in-person attendance is impractical. Approval is at the discretion of the presiding Member, who will consider the circumstances and reasons for the request.

Requests for remote attendance should be made in writing to the relevant Member’s chambers, explain the reasons, and be copied to other parties. Requests should be lodged early, as late requests may be refused. The Commission may seek submissions from other parties before deciding.

If approved, the Commission will issue an updated Notice of Listing. Parties must provide relevant documents in advance and ensure suitable technology and an appropriate environment for effective participation.

The Federal Court has published guidance on online hearings, videoconferencing and technology in litigation, and continues to develop additional guidance on the preparation and conduct of digital and hybrid hearings.

Fair Work Commission

The Fair Work Commission, established under the FW Act, has responsibilities spanning a broad range of workplace matters, including:

• resolving disputes concerning unfair dismissal, general protections involving dismissal, bullying, sexual harassment, flexible work, unpaid parental leave, casual conversion requests, and right to disconnect;
• setting labour standards, including issuing the annual National Minimum Wage Order, adjusting minimum wage rates in modern awards, varying and maintaining modern award terms, ensuring equal remuneration for work of equal or comparable value, and setting minimum standards and contractual chain orders for regulated workers;
• functions relating to bargaining for and approving enterprise agreements, including intervening where parties are deadlocked; and
• regulating registered organisations (trade unions for employers and employees), and upholding accountability and transparency standards for those organisations and their office holders.

The Fair Work Commission must perform its functions informally, avoiding unnecessary technicalities, with openness and transparency, and promoting harmonious and co-operative workplace relations.

The Australian Government has recently announced its intention to establish a Fair Work Court to resolve disputes quickly at lower cost for employees and employers. Consultation is currently underway.

Federal Court/Federal Circuit and Family Court

The Federal Court’s employment and industrial relations National Practice Area covers matters primarily concerning employment or industrial relations, including the following:

• Workplace relations: Matters arising under the FW Act, Fair Work (Registered Organisations) Act 2009 (Cth) and Fair Work (Building Industry) Act 2012 (Cth).
• Competition and consumer: Matters arising under the Competition and Consumer Act 2010 (Cth) relating to boycotts, the conduct of employee organisations, prohibited arrangements for goods and services, or misleading conduct.
• Anti-discrimination: Matters arising under federal or state anti-discrimination legislation or regulations where the issues concern the conduct of employers or employees or the conduct of employer or employee associations, or their officers or members.
• Other employment-related matters:
1. Matters arising under the Public Service Act 1999 (Cth), Independent Contractors Act 2006 (Cth), Safety, Rehabilitation and Compensation Act 1988 (Cth) and Work Health and Safety Act 2011 (Cth).
2. Employment-related administrative decisions, appeals and referrals, including those involving the Administrative Review Tribunal.
3. Proceedings concerning acts or omissions of the Fair Work Commission.
4. Disputes arising from contracts of employment or involving the rights, entitlements and obligations of employers and employees.
5. Any other proceeding substantially characterised as an employment or industrial relations matter.

The Federal Circuit and Family Court of Australia (FCFCA) has jurisdiction to hear claims under the FW Act, Fair Work (Registered Organisations) Act 2009 (Cth), Federal Safety Commissioner Act 2022 (Cth) and Work Health and Safety Act 2011 (Cth).

The FCFCA also provides a small claims process for claims under the FW Act, less formal than most court proceedings and generally conducted without legal representation, designed to resolve disputes quickly, fairly and cost-effectively, with most matters determined at a single hearing.

Other Specialist Courts and Tribunals

Each state and territory has a dedicated industrial court or tribunal with jurisdiction over its specific labour or anti-discrimination laws. Most of these specialised forums deal with employment falling outside the FW Act, typically covering public service employees. Work health and safety laws are generally enforced before state courts and tribunals, not the federal courts.

In July 2026, the Australian Government announced its intention to create a Fair Work Court. Its jurisdiction is yet to be determined, but early indications suggest it will absorb some or all litigated matters arising under the FW Act.

Representative Proceedings

No laws prevent employment- or discrimination-related matters from being subject to representative proceedings.

Colloquially known as class actions, these proceedings are governed by the Federal Court of Australia Act 1976 (Cth). A representative applicant does not need consent of all group members to commence proceedings, but there must be at least seven group members. The claims must be against the same respondent(s), arise from the same, similar or related circumstances, and give rise to at least one substantial common issue of law or fact.

Employment-related disputes that lend themselves to representative proceedings include underpayment of wages, discrimination, and breaches of labour legislation and industrial instruments.

All states and territories have domestic arbitration legislation, but these are typically limited to commercial disputes; employment and labour matters are excluded.

Cost recovery in Australian employment litigation is generally limited.

Proceedings commenced under the FW Act are typically conducted on a no-costs basis. A court may order costs in limited circumstances, including where a party:

• commenced proceedings vexatiously or without reasonable cause;
• caused the other party to incur costs through an unreasonable act or omission; or
• unreasonably refused to participate in Fair Work Commission proceedings arising from the same facts.

These are high thresholds, and courts retain discretion to award costs even where criteria are met. Consequently, costs applications are relatively uncommon.

A similar approach applies in the Fair Work Commission. In unfair dismissal matters, costs may be awarded only where a party caused costs through an unreasonable act or omission in connection with the conduct or continuation of proceedings.

The position differs in federal anti-discrimination litigation. Successful applicants can generally recover costs, subject to any unreasonable conduct on their part.

Successful respondents may recover costs only in limited circumstances, including where:

• the applicant commenced the proceedings vexatiously or without reasonable cause;
• the applicant’s unreasonable conduct caused the respondent to incur costs; or
• the respondent successfully defended all claims and does not have a significant power, financial or resource advantage over the applicant.