After you have developed your workforce plan you will also need to look at how to manage that plan, and the obligations you will have to meet as an employer.
The federal workplace relations system is regulated by the Workplace Relations Act 1996 
. It applies to all corporations, and all employees in Victoria, the Australian Capital Territory and the Northern Territory. However some employees in other states are covered by relevant state industrial relations laws. For information on industrial law in other states please refer to State and territory awards information links.
The following information refers only to the federal workplace relations system.
Engaging staff
When engaging a new employee the following matters should be agreed and recorded in writing:
- the employment commencement date;
- length of contract (if fixed term);
- hours of work and the status of employment - whether an employee is full-time, part-time or casual;
- remuneration - including all benefits or bonus schemes;
- superannuation;
- nature of employment or title;
- notice of termination: period of notice or payment in lieu (if not fixed term).
Some employers refer to company policies in their contracts of employment. If you wish to refer to such policies, you should seek legal advice in drafting an appropriate paragraph, as you will need to know your common law obligations and other technical requirements. For example, in the scientific, technical and information technology sectors, it is common for employers to include a confidentiality agreement protecting classified information about the company.
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Conditions of employment
There are numerous arrangements available which can be used to set and regulate the conditions of employment for employees. These include workplace agreements under the Workplace Relations Act , awards and common law contracts.
Regardless of the arrangement you choose, there are certain minimum conditions of employment that you must provide to all employees.
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Australian Fair Pay and Conditions Standard
The Australian Fair Pay and Conditions Standard (referred to as ‘the Standard’) is part of the Workplace Relations Act and sets out minimum wages and conditions of employment for all employees, including those employed on AWAs and collective agreements. The minimum pay and conditions of employment under the Standard are:
1. A maximum of 38 ordinary hours of work per week, plus reasonable additional hours.
2. A basic periodic rate of pay, plus casual loadings. These are determined by the employee’s Australian Pay and Classification Scale (APCS) or, if no APCS is available, a federal minimum wage and the default casual loading. These rates can be set and varied by the Australian Fair Pay Commission.
3. For full-time employees, four weeks paid annual leave per year (five weeks for some shift employees). Up to two weeks annual leave can be cashed out by agreement, but only where the employee requests cashing out, the employer agrees and their workplace agreement allows annual leave to be paid out. Part-time employees receive a pro-rata entitlement and casual employees are usually paid a casual loading in lieu of annual leave.
4. For full-time employees, ten days' paid personal/carer’s leave per year. A pro-rata entitlement is calculated for part-time employees. The Standard also provides an additional two days of unpaid carer's leave per occasion if paid leave runs out.
Unused personal/carer's leave can be cashed out by agreement, but only where the employee requests cashing out, the employer agrees, their workplace agreement allows personal/carer's leave to be paid out, and if the employee is left with at least 15 days' unused accrued personal/carer's leave.
In addition, two days paid compassionate leave per occasion is allowed. Compassionate leave is used to care for someone with a serious illness or injury in the household or family, or following the death of a person in the immediate family or household.
Casual employees are not entitled to personal/carer's leave, except for up to two days unpaid carer’s leave per occasion.
5. 52 weeks unpaid parental leave (maternity, paternity or adoption) is allowed for full-time, part-time and long term casual employees who have been employed for at least 12 months.
These are minimum entitlements. Employers and employees can negotiate more favourable pay and conditions in workplace agreements.
Please note: Workplace agreements differ greatly according to the types of employment offered and the industry sector, so it is advisable to seek advice from the Workplace Authority or legal advice before putting together an agreement to ensure employer obligations are met.
Read more: Download a copy of the Australian Fair Pay and Conditions Standard 
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Workplace agreements
Agreement making ensures that flexibilities can be written into the terms and conditions of employment, subject to the minimum conditions set out in the Standard. Workplace agreements may take the form of an Australian Workplace Agreement, made with an individual employee, or a collective agreement, which can be made with employees or with a union.
The Government has recently introduced a fairness test which requires that fair compensation be provided to employees for the modification or removal of any protected award conditions, such as penalty rates, overtime and monetary allowances. The fairness test applies to employees on Australian Workplace Agreements earning less than $75 000 and all employees on collective agreements and who are working in an industry or occupation in which the terms and conditions are usually regulated by an industrial award. The Workplace Authority administers the fairness test, which applies to workplace agreements lodged on or after 7 May 2007.
The Workplace Authority can provide straightforward and independent advice about agreement making, including about how to make an agreement that meets the fairness test. For further information about agreement making visit the Workplace Authority .
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Australian Workplace Agreements
Negotiating an AWA with an individual employee can ensure that the working arrangement suits the needs of both employer and employee. Subject to the terms of the Australian Fair Pay and Conditions Standard , options such as flexible working arrangements can be written into the AWA and will ensure that both employers and employees have a clear understanding of the conditions of employment.
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Collective agreements
Collective agreements provide an employer and its employees with an opportunity to negotiate arrangements that suit them on a collective basis. Once approved and lodged, a collective agreement will also cover future employees who are within the scope of the agreement.
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Awards
Awards are set by the Australian Industrial Relations Commission or a state equivalent and provide for many matters, including penalty rates and shift work loadings. The coverage of awards was frozen on 27 March 2007 when significant amendments were made to the Workplace Relations Act . You will not be covered by an award unless your business was covered by one on 27 March 2007.
If you are covered by an award, a number of existing award conditions will be protected when new workplace agreements are negotiated. These matters include annual leave loadings, penalty rates, overtime and shift loadings, monetary allowances, public holidays and rest breaks.
These award conditions may be the subject of bargaining between employees and employers, but they can only be modified or removed by specific provisions in workplace agreements that have been agreed between an employer and employees.
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Types of employment
Below is some practical information regarding employer obligations for various types of employment.
There are a number of different employment types, including permanent (full-time and part-time), casual, and fixed-term employees. Also, an employee might be engaged as an apprentice or trainee. It is important to recognise the differences as a worker’s employment type can affect the terms and conditions of employment. Please refer to the Australian Taxation Office website for further information on differences between the employment types.
Very briefly, the different employment types are:
Full-time permanent - Most full-time permanent employees usually work between 30 to 38 hours per week on a regular, ongoing basis. Full-time permanent employees are eligible for annual leave, personal/carer’s leave, long service leave and public holidays. They are also entitled to 52 weeks of unpaid parental leave.
Part-time permanent - Part-time permanent employees work on a regular, ongoing basis for fewer hours than full-time employees. For example, part-time employees may work a set number of hours on specific days. They get the same entitlements as a full-time permanent employee, but on a pro-rata basis according to the hours worked. They are also entitled to 52 weeks of unpaid parental leave.
Casual - Generally casual employees are employed on an irregular basis and may have no set design or routine to when they work, with no expectation by either side that there will be regular ongoing employment. Casuals can work any number of hours a week (subject to the ‘hours of work’ provisions of the Standard) but are employed on an ‘as needs’ basis, often to meet changing workloads within the business. Casual employees can work for short periods of time, a season, a day or an hour. They are not entitled to annual leave, or paid personal/carer’s leave. However, they are entitled to some unpaid leave, and a day off on public holidays, and some are entitled to parental leave. Casual employees are typically paid a higher hourly rate than full-time and part-time employees because they are not entitled to paid leave.
Fixed-term employees - Fixed term employees may be hired on a full-time or part-time basis, but their engagement has a specified end date. They have the same leave entitlements as permanent full-time and part-time employees.
Australian Apprenticeships - Australian Apprenticeships encompass all apprenticeships and traineeships. They combine time at work with training and can be full-time, part-time and school based and lead to a nationally recognised qualification. Australian Apprenticeships are available to anyone of working age and do not require any entry qualifications. You can be a school-leaver, re-entering the workforce or simply wishing to change careers.
Further information on employment types is available from the Department of Education, Employment and Workplace Relations' Workplace website .
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Termination and unfair dismissal
As an employer you need to be aware of your obligations in circumstances where you have to terminate an employee's employment.
Unlawful termination
Under the Australian Workplace Relations system it is unlawful for an employer to terminate employment on discriminatory grounds. Where employment has been terminated because of illness or injury, trade union membership, race or other unlawful grounds of discrimination, an employee can make an unlawful termination application, regardless of the size of the business.
Unfair dismissal
Under the Workplace Relations Act 1996, there are remedies available in the Australian Industrial Relations Commission (AIRC) to certain employees for harsh, unjust or unreasonable dismissal (‘unfair dismissal’), if they are employed by an organisation of more than 100 employees. The Workplace Relations Act 1996 exempts businesses with 100 employees or less from federal unfair dismissal laws.
Employees whose employment has been terminated for genuine operational reasons cannot bring unfair dismissal applications. ‘Operational reasons’ means reasons of an economic, technological, structural or similar nature relating to the employer’s business.
If the AIRC decides that the termination was harsh, unjust or unreasonable, the AIRC can make an order for reinstatement or a payment in lieu of reinstatement (up to six months’ pay).
In unfair dismissal matters, orders to pay costs can be made against employees as well as employers.
Termination payment
As an employer, you need to be aware that organisations generally have to make some sort of final payment or Eligible Termination Payment (ETP.) This might include unused annual leave and long service leave and severance pay for employees who have been made redundant. Redundancy payment obligations are often set in awards or workplace agreements - although usually employees should have been employed on a full-time or part-time basis for a minimum of one year to qualify. For further information visit the Australian Taxation Office website.
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