HR Practices in Australia
Human Resource Management (HRM) is the function within an organization that focuses on the recruitment of, management of, and providing direction for the people who work in an organization. As all of the processes and programs that are touched by people are part of the HR kingdom.
The HRM department provide the knowledge, necessary tools, training, administrative services, coaching, legal and management advice, and talent management oversight that the rest of the organization needs for successful operation.
HRM functions are also performed by line managers who are directly responsible for the engagement, contribution, and productivity of their reporting staff members. In a fully integrated talent management system, the managers play a significant role in and take ownership responsibility for the recruitment process. They are also responsible for the ongoing development of and retention of superior employees.
Organizations also perform HRM functions and tasks by outsourcing various components to outside suppliers and vendors. The tasks that are most frequently outsourced are those that take HR time and energy away from the HR activities that provide the most strategic value to the company.
This outsourcing most frequently involves payroll functions, but vendors and external consultants can help an organization with HRM in many ways.
Specifically, many HR departments outsource background checking, benefits administration, training such as sexual harassment training, temporary staffing, and the production of employee handbooks, policy manuals, and affirmative action plans.
HR Practices in AUSTRALIA
Australia is an independent Western democracy with a population of more than 22 million. It is one of the world’s most urbanized countries, with about 70 per cent of the population living in the 10 largest cities. Most of the population is concentrated along the eastern seaboard and the south-eastern corner of the continent.
Australia’s lifestyle reflects its mainly Western origins, but Australia is also a multicultural society which has been enriched by over six million settlers from almost 200 nations.
Official name: The official name of Australia is Commonwealth of Australia.
Official language: Australia does not have an official language, but the national language is English and the standard dialect – general Australian.
Capital: The capital city is Canberra, the largest city is Sydney.
Business Mentality /Culture
Australians are very straightforward when it comes to business, so they do not need to build relationships for a long time before doing business with someone. They encourage to new ideas.They appreciate modesty, If one manage to impress them, they will not make it obvious. Australians demonstrate modesty as much as they appreciate it. They can even downplay their own success, so do not jump into conclusions straight away.
They challenged to a controversial discussion during a meeting, do not worry – it is nothing personal. They find debates entertaining and will initiate them by making provocative statements, to which it is best to respond with humor! The decision making will be slower than usually, as the work environment in Australian business culture is collaborative. Top management will consult subordinates.
Do not try to rush the decision – patience is very much appreciated.The good news is that Australians do not find it hard to say “no”, so the answer will be clear and straightforward.
Business hours are 9:00 am to 5:00 pm, Monday to Friday.
- Australians are not very formal, so greetings are casual and relaxed – a handshake and a smile are appropriate.
- However, while an Australian may say, ‘G’day’ or ‘G’day, mate’, this may sound patronizing from a foreigner. Visitors should simply say the traditional ‘Hello’ or ‘Hello, how are you? ‘As to titles of courtesy, they prefer to use first names, even at the initial meeting.
The Art of Conversation
- English is the spoken language at business meetings. However, stick with standard terms; do not experiment with Australian terms.
- Popular welcome topics include the weather, sports (particularly Australian Football AFL in Victoria, and National Rugby League NRL in New South Wales and Queensland). Anything related to Australia in a positive way is a good conversation starter.
- Topics to avoid though are religion, politics and sex – unless the Australian counterpart brings it up. Do not get into immigration and aboriginal issues no matter how curious you are. Also, comments on accents will not be welcome, as they often distinguish social classes.
- Note that Australians use colorful language that would be unacceptable in other countries.
Business Meetings and Meals
- Regarding dress code, men should wear a dark colored, conservative business suit.
- Similarly, women should wear a smart dress or a business suit.
- In Brisbane or other tropical areas, depending on the job function and company culture, men may wear shirts, ties and Bermuda shorts.
- Punctuality is important, it better to arrive a few minutes early.
- One can present your business card at the introduction. Keep its content to facts and figures – emotions and feelings are not important.
- Offering gifts is not part of Australian business etiquette, but it is acceptable to bring a small gift from your country. They should be opened when received.
- Table manners are same as in Europe.
- The person making the invitation generally pays the bill in restaurants. However, it is usual for friends to split the bill.
- If you are invited out for a drink, don’t recall the subject of business unless your counterpart does so.
- In a pub, each person is expected to pay for a round of drinks which is called a “shout”. Avoiding your turn to pay will only create a bad impression of you.
- Strong eye-contact is essential – it demonstrates involvement.
- The accepted distance between people at meetings is an arm’s length.
- Third parties are allowed to use or reference information on this page for non-commercial use only if they acknowledge this website as the source by linking to it.
Full-time earnings in Australia averaged A$78,832 a year in the second quarter of 2016.
Basic Guide to The Australian Employment Law Life Cycle
For many employers, the key to having a productive and high-performing workforce is recruiting the right people. It is important for employers to be aware that even before an employee commences work, there is a number of legal issues that arise in the process of seeking, interviewing and selecting candidates for a position.
Employers are prohibited from discriminating on the basis of an attribute (including sex, race, pregnancy, age, impairment, political belief or activity) against job applicants in determining who should be offered employment. . When short listing or selecting candidates, employers should ensure that any decision is based on consistent selection criteria, which are not discriminatory.
Employers not discriminate against a person in the terms upon which employment is offered to them or by refusing or deliberately omitting to offer employment to a person.
Making an Offer of Employment
An offer of employment may not be in writing. A verbal offer is still an offer for the purposes of forming a binding contract, once accepted by the employee. However, a written offer signed by the employee is recommended. This written offer should include the date of commencement of the employment, the position, information regarding wages and any other important aspects of the employment relationship that differ to or are not set out in Australia’s employment legislation, the Fair Work Act 2009 (Cth) (Fair Work Act).
Employers should ensure that the prospective employee does not have any restrictions that may prevent him or her from entering into the employment contract (for example, a post-employment restraint of trade imposed by his/her former employer).
In formulating the employment contract, an employer should be aware of the minimum statutory terms and conditions set out in the Fair Work Act, applicable long service leave legislation and applicable superannuation legislation.
The basic terms usually include the duration, position, duties, probationary period, remuneration including any bonuses, other benefits such as car allowance, leave (including annual leave, personal or carer’s leave, parental leave, long service leave), superannuation, notice of termination, the right to summarily dismiss, protection of confidential information and intellectual property, post-termination restrictions and governing law and jurisdiction.
A wide range of matters arise during the employment relationship that requires careful management in order to ensure that a positive ongoing relationship is maintained, and that there is compliance with relevant legal obligations.
Benefits and Entitlements
Modern awards apply to national system employees in a particular industry or occupation. Enterprise awards apply to particular employers. These awards and the National Employment Standards set out the minimum requirements with which an employer must comply in respect of benefits and entitlements for their employees, including the minimum wage. If employees are covered by an enterprise or collective agreement (an agreement negotiated collectively between employees (and/or a union) and the employer), this will set out employees’ benefits and entitlements.
There Are Ten National Employment Standards Set Out in The Fair Work Act:
- Hours of work – the ordinary hours of work for an employee to whom a modern award or enterprise agreement applies will be the ordinary hours specified in the award or agreement. Under the National Employment Standards, an employee’s maximum weekly hours of work, for a full-time employee, is 38 hours. An employer may require an employee to work reasonable additional hours.
- Request for flexible working arrangements – an employee who is a parent, or has the responsibility for care of a child, may ask their employer for a change in working arrangements to assist with caring for the child. The employee must have completed at least 12 months of continuous service to qualify for the request. An employer may refuse a request for flexible working arrangements on reasonable business grounds.
- Annual leave – all employees other than casual employees are entitled to four weeks’ paid annual leave for each year of service. Annual leave accrues progressively and must be taken for a period agreed between the employee and employer.
- Personal/carer’s leave – all employees other than casual employees are entitled to ten days of paid personal/carer’s leave this covers sick leave for each year of service. An employee may take personal/ carer’s leave if he/she is not fit for work because of personal illness or injury, or to provide support to a member of the employee’s immediate family or a member of their household who requires care or support because of personal illness/injury or an unexpected emergency. All employees are also entitled to two days of unpaid carer’s leave for each occasion, if they have exhausted their entitlement to paid leave. The two days unpaid carer’s leave also applies to casual employees.
- Compassionate leave – all employees other than casual employees are entitled to two days of paid compassionate leave for each occasion when a member of their family or household dies, contracts a personal illness or sustains a personal injury that poses a threat to the member’s life.
- Community service leave – employees other than casual employees who engage in eligible community service may be absent from his/her employment to engage in the activity. The employee is also entitled to reasonable travel time associated with the activity and reasonable rest time after the activity.
- Public holidays – an employee is entitled to be absent from work on a day that is a public holiday in the place where the employee is based for work purposes. The National Employment Standards list eight public holidays. Additional days may be prescribed under a law of a state or territory.
An employer may ask an employee to work on a public holiday if that request is reasonable. The Fair Work Act describes factors that must be taken into account when determining whether a request is reasonable, for example, the personal circumstances of the employee, including family responsibilities.
- Unpaid parental leave – unpaid parental leave includes birth-related leave and adoption-related leave. The leave must be associated with the birth of a child to the employee or the employee’s spouse or de facto partner, or the placement of a child with the employee for adoption. The employee must have responsibility for the care of the child in order to take the leave. The employee must have completed at least 12 months of continuous service with the employer to be entitled to unpaid parental leave. An employee alone can take up to 12 months’ leave, or each employee couple may take separate periods of leave of up to 12 months. A paid parental leave scheme has recently been introduced in Australia, giving those eligible an entitlement to 18 weeks’ paid parental leave at the national minimum wage, to be paid by the government via employers. The Paid Parental Leave Act 2010 came into effect on 1 January 2011.
- Notice of termination and redundancy pay – an employer must not terminate an employee’s employment unless it has given written notice of the day of termination. The length of notice depends on the duration of service of the employee. This is discussed further below. The National Employment Standards also entitle an employee to redundancy pay where employment is terminated for specific reasons. This is also discussed below.
- Fair Work Information Statement – employers are obliged to provide a Fair Work Information Statement to all employees who commence employment. The statement contains information about a number of matters, including an explanation of the National Employment Standards, modern awards, and collective agreement in the workplace, termination of employment and the right of a trade union to enter the workplace.
Employees may be paid weekly, fortnightly or monthly. Employers must issue pay slips (in hard copy or electronically) to each employee within one working day of their pay day, even if they are on leave.
Those employees covered by a modern award (or enterprise award) are entitled to be paid at least the minimum wage set out in that award. The National Employment Standards set out the national minimum wage applicable to employees who are not covered by a modern award. This includes senior employees, for example managers and executives, as well as professional employees such as accountants, marketing and information technology specialists. Employers may express an employee’s wage as an overall annual salary, which has entitlements such as overtime and penalties built into it.
Modern awards often have provisions related to the manner and timing of the payment of wages.
The Fair Work Act prohibits employers from deducting money from employees without their written authorisation. The agreement must specify the amount of the deduction. The deduction must also be principally for the employee’s benefit.
Employers are required to pay superannuation for all employees, except casual employees, in accordance with superannuation legislation. The current minimum rate of superannuation required to be paid into a superannuation fund for full-time and part-time employees is 9% of the employee’s salary.
Long Service Leave
Long service leave is dealt with by state and territory legislation. Depending on the jurisdiction, employees become eligible to take long service leave after completing between seven and 15 years of continuous employment with the same or a related employer.
All employees who earn income in Australia are required to pay income tax. Employers deduct income tax installments (PAYG instalments) from employees’ wages. Deductions go to the Australian Tax Office (ATO). The amount of the deduction depends on the income of the employee and varies depending on the level of earnings of an employee. The more an employee earns, the greater the income tax they are required to pay. Employees are responsible for lodging their individual tax returns at the end of the financial year with the ATO.
Varying Terms and Conditions
Parties to an employment contract may at any time agree to vary the terms of the contract. Employers must not vary the employment contract unilaterally. Employment contracts often include a term stating that variation to the terms of the contract can only be made in writing and signed by both parties. Unauthorized variations of an employment contract by an employer may be considered a repudiation of the contract by the employer, giving the employee the option of accepting the repudiatory conduct and suing the employer for damages.
Occupational Health and Safety
Each state and territory has separate occupational health and safety legislation. Generally, employers are required to ensure, so far as is reasonably practicable, the health, safety and welfare of their employees while they are at work. Occupational health and safety legislation sets out an employer’s duties. Investigations and prosecutions are conducted by the relevant statutory body.
Safe Work Australia is developing national model occupational health and safety laws. By December 2011, each jurisdiction in Australia will be required to enact their own jurisdictional laws that mirror the national model laws.
Employers must keep certain written records in relation to their employees for seven years, including records about time and wages.
The termination of employment may be brought about in a number of ways, for example exercising a contractual or statutory right to terminate, by agreement or by operation of law. Employers need to be aware of their contractual and common law obligations as well as the statutory provisions when ending an employment relationship.
Minimum periods of notice at termination are set out in the National Employment Standards. The length of notice required to be given to an employee will depend on the duration of the employee’s period of continuous service. At the lowest end, an employee who has been with their employer for less than a year is entitled to one weeks’ notice. At the highest point, if an employee has been continuously employed with an employer for more than five years, they are entitled to four weeks’ notice. Under the National Employment Standards, an employee who is over 45 years old is entitled to an extra week of notice if they have at least two years of continuous service. Written notice of the day of termination must be given. Payment may be made in lieu of notice and must include superannuation.
A greater period of notice required for termination is typically stipulated in the employment contract of executives working for the employer. The period of notice may be anywhere between one and three months.
Employees are generally required to give the same minimum period of notice to their employer when terminating their employment.
Notice of termination may be given to an employee by delivering it personally, leaving it at the employee’s last known address or sending it in pre-paid post to the employee’s last known address.
All employees are entitled to redundancy pay when their employment is terminated at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, or because the employer is bankrupt or insolvent. The entitlement is based on a sliding scale and calculated by reference to the length of the employee’s continuous service on termination. An employee who has worked more than one year but less than two years is entitled to four weeks’ pay. An employee has been employed continuously for over nine years but less than ten years is entitled to 16 weeks of redundancy pay.
The length of an employee’s service prior to 1 January 2010, when the National Employment Standards came into operation, is only counted if the employee had an entitlement to redundancy pay under some other instrument, such as a modern award (or enterprise award), agreement or employment contract.
The minimum period of notice does not apply where an employee is summarily dismissed for serious misconduct. Serious misconduct occurs where an employee is in serious breach of the obligations owed to his/her employer.
At common law, examples of serious misconduct include dishonesty, assaulting a colleague or refusing to follow a fair and reasonable direction of the employer.
Employees who have completed six months of service with their employer and are covered by a modern award, an enterprise agreement and/or whose sum of annual earnings is less than the high income threshold (as defined in the Fair Work Act and indexed annually) are protected from unfair dismissal.
An employee who is earning the high income threshold and is not covered by an agreement or award is excluded from being able to claim unfair dismissal. The figure representing the high income threshold is indexed each July, and sits at around $110,000.
Small business employers are subject to the Fair Dismissal Code, formulated under the Fair Work Act. A small business employer is an employer who has less than 15 employees at one time. Under this Code, employees of a small business employer may claim unfair dismissal against their employer if they have completed 12 months of service with the employer and have been dismissed.
A person is unfairly dismissed if their dismissal was harsh, unjust or unreasonable. The Fair Work Act states that an employee is dismissed if his/her employment has been terminated on the employer’s initiative or if the employee resigned but was forced to do so because of the employer’s conduct.
Reinstatement or compensation (capped at six months’ salary) are amongst the orders that an employer may receive if unfair dismissal is established by the employee.
Upon termination, certain statutory entitlements must be paid to the employee. This includes accrued but untaken annual leave, accrued wages for work performed and payment in lieu of notice (if relevant). An employee may also be entitled to other contractual entitlements on termination.
Under the Fair Work Act, employers are prohibited from taking ‘adverse action’ against an employee because the employee has exercised a ‘workplace right’. Workplace rights include benefits under workplace law, making a complaint or inquiry and participating in a process or proceeding under a workplace law or instrument. Adverse action includes dismissing the employee, altering the position of the employee to the employee’s prejudice and discriminating between the employee and other employees.
The prohibition of discrimination under the general protections provisions is separate from, and additional to, other discrimination law.
Direct and indirect discrimination in employment is prohibited in all states and territories of Australia under the relevant equal opportunity or anti-discrimination legislation. Discrimination may be on the basis of sex, race, pregnancy, impairment, industrial activity, race and religious beliefs, amongst other things. Harassment and victimization are also prohibited. The tests for discrimination differ between states.
Commonwealth equal opportunity legislation is separated into the different categories of discrimination. The Acts relevant to discrimination in employment are:
- The Age Discrimination Act 2004 (Cth) prohibits discrimination against a person on the grounds of that person’s age.
- The Sex Discrimination Act 1984 (Cth) prohibits discrimination on the basis of sex, marital status, pregnancy or potential pregnancy and family responsibilities (only in relation to dismissal).
- The Disability Discrimination Act 1992 (Cth) prohibits discrimination on the basis of a disability, either directly or indirectly, in relation to employment.
- The Racial Discrimination Act 1975 (Cth) prohibits direct and indirect discrimination based on a person’s race, colour, descent or national or ethnic origin in a range of areas.
- The Australian Human Rights Commission Act 1986 (Cth) prohibits discrimination on the basis of age, medical record, impairment, marital status, mental, intellectual or psychiatric disability, nationality, physical disability, sexual preference or trade union activity and, in some circumstances, criminal record.
Confidential Information/Post-Termination Restraint of Trade
Employers should ensure that they have in place sufficient protection in relation to their confidential information, intellectual property rights and clients/customers/employees to prevent a departing employee from causing significant damage to the employer’s business. Significant damage may be caused if an employee sets up a rival business, uses confidential information they have received in the course of their employment to the disadvantage of their former employer or encourages clients to move with them. To protect the employer’s business, a post-termination restraint of trade should be included in the employee’s contract. However such clauses are generally presumed to be void at law. In order for the restraint to be enforceable it must be reasonable and for a defined period of time. There must also be a legitimate reason for imposing the restraint.
Employers are not obliged to provide a reference for a former employee. When considering whether to do so or not, employers must be aware that when a reference is provided, the reference must not misleading. Potential liability may arise if a reference is misleading and the employee engages in serious misconduct to the detriment of the new employer.
Fair Work Australia is the national workplace relations tribunal in Australia. It is an independent body with power to carry out a range of functions under the Fair Work Act. It may deal with issues related to the safety net of minimum wages and employment conditions, enterprise bargaining, industrial action, dispute resolution, termination of employment and other workplace matters. Other courts may also have jurisdiction over some matters, depending on the monetary amount claimed or the type of claim being made against the employer.
If an employee claims they have been discriminated against, a complaint may be made to the relevant state’s equal opportunity commission or tribunal. If the complaint is made under federal legislation, it may be made to the Australian Human Rights Commission or the Federal Magistrates’ Court.
Australian Business Ethics
In Australia, business ethics refers not only to whether a company treats its customers fairly or if it is honest about its business practices. Australian business ethics also emphasize respect for individuality and privacy, as well as direct and honest communication and negotiation. Ethical business behavior revolves around being upfront, presenting yourself honestly and judging someone based on actions and skill, not on title or rank.
Australians value equality, which is an important social principle and is especially prevalent in the business world. Australians avoid what they call “Tall Poppy Syndrome,” which refers to standing out from the crowd. They avoid drawing attention to their academic or professional credentials or other accomplishments, and do not respond well to others bragging about their personal achievements or those of their companies’. Instead, they look to a person’s abilities and performance as indicators of competence.
Australia’s focus on egalitarianism and individuality strongly influences corporate structure and hierarchy. Employees may hold higher ranks, but that doesn’t mean they necessarily have more authority or that employees at lower levels have less input. Collaboration at all levels is essential to ethical business behavior. Upper-level managers typically seek input and advice from their subordinates, and there is often no obvious distinction between upper- and lower-level employees. Employees at lower levels frequently have considerable decision-making power.
Equality is also crucial when it comes to a woman’s place in the business world. Women work in many of the same industries as men, and often hold positions of authority. Visitors to Australia should be prepared to do business with high-ranking women, which may be a culture shock if that is not the standard practice in their own countries. However, treating women professionals with respect is just as important to Australian business ethics as treating people as equals regardless of their social standing.
Whether it’s an informal meeting or an intense negotiation, Australian business people place company policy above all else. Professionals are expected to set their feelings aside, focusing instead on facts, evidence and company rules. Negotiations often move swiftly, and while Australians are receptive to new ideas, these new ideas must be based on empirical evidence. Australian business people don’t like an aggressive or overly persuasive sales approach, preferring direct communication about the other person’s intentions. Bargaining is also not well-received.
Privacy and Relationships
Australians draw a clear line between their personal and professional lives, and expect others to do the same. Discussing your personal life or asking extremely personal questions in a business setting is considered inappropriate. However, Australians do like to establish a personal relationship with colleagues and associates, and may want to make small talk before starting a meeting. This exchange is usually brief, though, and limited to neutral topics like the weather or sports, rather than potentially offensive or controversial topics such as religion or politics.