Navigating Australia’s Employment Law: What Every Employer Should Know

Nina | LWN
Jul 21, 2025
3 min read

Updated: Sep 1, 2025

If you run a business and employ staff in Australia, it’s important to understand the key employment laws that apply to you. The legal landscape can be complex, but getting the basics right is essential to avoid penalties and build a compliant workplace.

This article outlines the core laws and obligations that every employer should be aware of.

The Fair Work Act 2009

The Fair Work Act is the main legislation that governs employment relationships in Australia. It applies to most employers and employees across the country. It sets out minimum employment conditions, workplace rights and responsibilities, and protection against unfair dismissal.

National Employment Standards (NES)

The NES provide 11 minimum entitlements for all employees covered by the Fair Work Act. These include: * Maximum weekly hours (38 hours for full-time employees)

* Requests for flexible working arrangements

* Parental leave

* Annual leave and personal/carer’s leave

* Notice of termination and redundancy pay.

Employers must comply with the NES. They apply regardless of any award or agreement.

Modern Awards

Modern awards are legal documents that set out minimum pay rates and employment conditions for particular industries or occupations. If your employees are covered by an award, you must follow its terms in addition to the NES.

Common award terms include:

Minimum rates of pay
Overtime and penalty rates
Breaks and allowances
Rostering requirements

You can use the Fair Work Ombudsman’s website to identify which award applies to your staff.

Minimum Wage

The Fair Work Commission sets the national minimum wage each year. As of July 2025, it is $24.95 per hour (before tax) for full-time employees.

Employees covered by awards or enterprise agreements may be entitled to higher rates.

Employers must always ensure they are paying at least the applicable minimum rate.

Employee or Contractor?

Correctly classifying workers is a common issue for businesses. Whether someone is an employee or independent contractor depends on the working relationship, not just what the contract says.

Factors include:

Level of control over how work is done
Ability to delegate work
Whether the worker supplies their own tools
Method of payment (e.g. hourly wage or by project)
Risk and independence

Misclassifying employees as contractors can lead to underpayment claims and ATO penalties.

Workplace Health and Safety (WHS)

Employers have a duty of care to provide a safe working environment. This includes managing risks, training staff, and reporting incidents.

Each state and territory has its own WHS laws. In most jurisdictions, these are based on the national model WHS laws.

Unfair Dismissal

Employees who have completed the minimum employment period (six months, or 12 months for small businesses) may be protected from unfair dismissal. Employers must follow a fair process when ending employment.

This typically includes clear performance expectations, warnings and an opportunity to respond and consideration of alternatives.

A dismissal that is harsh, unjust or unreasonable can lead to claims and financial penalties.

Next Steps

If you’re unsure about your obligations or want to review your current employment arrangements, consider seeking legal advice. Having the right contracts, pay structures and processes in place is the best way to stay compliant.