Employment laws in Australia and the Fair Work Act

Many international companies and foreign government bodies have operations in Australia. And many Australians find themselves working for Australian companies overseas. Are those employers and employees governed by the Fair Work Act?

Foreign Companies

A company that is incorporated overseas and employs workers in Australia is a ‘national system employer’ which is bound to observe the Fair Work Act.

This means that even if an employee of a foreign company is employed under an employment contract governed by the law of another country, all employees of the foreign company based in Australia must receive the minimum pay, entitlements and protections set out in the Fair Work Act.

Australian Subsidiaries

Often, multinational companies who wish to trade or invest in Australia set up an Australian subsidiary to hire local employees. The Australian subsidiary is bound by the Fair Work Act.

Government Bodies

Foreign government bodies are also often bound to comply with the Fair Work Act. Section 12 of the Foreign State Immunities Act provides that the usual immunity from claims offered to foreign government bodies in Australia does not apply to claims relating to contracts of employment or statutory obligations associated with employment.

The Australian government has a number of treaties which regulate the pensions, superannuation and taxation obligations of a range of foreign government entities who employee their own citizens in Australia.

Overseas Based Employees of Australian Companies

An employee of an Australian company who works overseas has the benefit of the minimum entitlements and protections under the Fair Work Act. The employee may also have then benefit of protections under the law of the country in which he or she is based.

If, however, the employee is contracted to an overseas subsidiary of a multinational group headquartered in Australia, the employee will not have the benefit of the entitlements and protections in the Fair Work Act.

Contracts Governed by Foreign Law

It is common for foreign companies to have employment contracts with Australian employees governed by the laws of a foreign country. This does not mean that the Fair Work Act will not apply. It may also be possible to bring a claim for breaching the foreign law contract in an Australian court in accordance with Australian conflicts of law rules.

How can we help?

The team of employment lawyers at JFMLAW has assisted international companies with operations and subsidiaries in Australia and foreign government entities to comply with their obligations under Australian law. We have also assisted overseas employees of Australian companies, and Australian employees of overseas companies, to resolve disputes with their employers.

Please do not hesitate to get in touch with us on +612 9331 0266 or at front.desk@jfmlaw.com.au to find out how we can help you.

If you want a short summary of employment law in Australia, please read our free online Manager’s Toolkit.