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Employment Conditions in Australia

Terms & Conditions of Employment in Australia

Probation period

There is no prescribed probationary period under Australian law. Usually, employees in Australia are subject to a probationary period of either 3 or 6 months. It is unusual for probationary periods to exceed six months as that is the minimum employment period for large businesses for unfair dismissal purposes which means that employers must adopt procedural fairness for any terminations beyond that period.

Post-contractual duty of care

It is possible to restrict employees' activities during employment and post-termination if the employer can establish that their scope is reasonably necessary to protect its legitimate business interests. This could include goodwill, protection against soliciting employees or the release of confidential information and trade secrets.

Express terms requiring exclusive service and the protection of confidential information and intellectual property are frequently included in employment contracts. The main types of restraints include:

  • Non-compete, which prohibits employees from working for competitors.
  • Non-solicitation, which prevents employees from soliciting customers, clients, suppliers, employees or contractors.
  • Non-dealing, which prevents employees from dealing with former clients and suppliers.
  • Non-poaching, which prevents people from convincing other employees to leave as well or join them in the new organisation.
  • Non-interference.
  • Non-employment.

Typically, the maximum enforceable restraint period in an employment context is 12 months.

Intellectual property

Employers are not automatically entitled to ownership of the intellectual property (IP) created by employees. Therefore, it is prudent for employment arrangements to assign IP to protect the employer's interests and avoid disputes.

There is a statutory presumption that employers own the copyright in any work created in the course of employment (Copyright Act 1968 (Cth)) subject to certain exceptions. The same presumption arises in respect of ownership of designs (Designs Act 2003 (Cth)).

Business transfer

In the case of a business transfer, employment may be transferred from one entity to the next under the Fair Work Act. For that to happen, the transferring employee should start work within three months of termination from the old employer and their work must substantially similar. One of the following connections should be established:

  • The two organisations are associated entities
  • There is outsourcing or in-sourcing of business between them
  • There is an arrangement made either about the ownership or the assets of the transferring work

Usually, on a transfer, the employee's period of service with their first employer counts as service; however, this is not always the case. Typically, the employee would retain their accrued annual leave (unless paid out on termination of employment with the first employer). The period of service relevant to redundancies is not interrupted unless the second employer decides not to recognise the employee's period of service with the first employer. Continuity of extended service leave entitlement is dependent on the applicable state legislation.

The new employer is not required to offer to employ employees from a transferring business.

Handbook

No federal or state law requires companies to provide employees with a handbook. However, employers have a legal responsibility to inform employees of their rights and responsibilities, and an employee handbook is excellent to help clarify expectations and reduce misunderstandings at work. Another benefit for employees is they can see the benefits and compensations they are entitled to receive.

Redundancy

When a redundancy involves 15 or more employees, the Australian social security agency, Centrelink, must be notified. Employers are not permitted to select employees for redundancy based on age or job tenure. There are no general priority rules in the case of redeployment.

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This page was last updated on 
29 April, 2022,
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