China Employment Law Network
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Employment Law in Australia

The Australian Employment Law offers another unique example of the multi-level legislation at the constitutional, federal and state levels with an overwhelming reliance upon the common law courts. Australia is a federal state that provides a lot of autonomy to its states in terms of governance and law-making. However, all states operate under the federal legislation, which is itself subsumed under the Australian Constitution and the decisions of common law courts, especially High Court of Australia, the final court of appeal in the country. More fundamentally, the Australian Employment Law is tremendously employee-centric and has a unique history with its labor framework, which until few years ago centred on the compulsory conciliation and arbitration system. This decentralised system is very different to the streamlined Chinese Employment Law with the central government creating and enforcing a single standard over the whole country. It may also be contrasted to the Chinese Employment Law due to its emphasis on the protection of employees and the break down of Employment Law responsibility between federal and state levels, which were embedded into the law for over a century.

Employment Contract:
The common law contract of employment lies at the heart of employment relationship in Australia. Similar to other common law countries, such as the USA and the UK, there is no specific requirement for a written contract of employment. Indeed, oral contracts of employment are permitted and there are express and implied terms within every contract. However, this may vary between different states in Australia, all of which have their own rules on every aspect of the Australian Employment Law. Nevertheless, the Fair Work Act (2009) imposes statutory minimum conditions of employment (i.e. National Employment Standards or NESs) to be codified in a Fair Work Information Statement and provided to the employees by all employers in Australia. These NESs cover such issues as maximum weekly hours, request for flexible working arrangements, parental leave, annual leave, personal leave, compassionate leave, community service leave, long service leave, public holidays, notice of termination and redundancy or severance pay.

Furthermore, some employees may be covered by 'modern awards', which are the decisions of the Fair Work Australia ('FWA'), which is a federal body that has responsibility to review and revise 'modern awards' every four years and may concern issues, such as minimum rates of pay, ordinary hours of work, overtime, penalties, loadings and can supplement the entitlements found in the NESs. This body also has the responsibility to resolve 'industrial disputes' between the parties in an employment relationship. Finally, employers may enter into statutory collective agreements with their employees, which are called Enterprise Agreements. The Fair Work Act (2009) requires for these agreements to satisfy the 'better off overall' test, which means that the employees must be placed in a better position than they would be under the relevant 'modern award'.

This complex structure of federal legislation and industrial disputes resolution together with the Employment Laws of specific Australian states make the Australian Employment Law one of the most complex in the world. In this respect, the Chinese Employment Law with its clear source and an explicit legal obligation for a written contract with a clear list of required information differentiates it from a much more complex Australian counterpart. Article 17 of the PRC Labor Law (2007) makes it clear what is required for the employment contract to create a binding employment relationship and there is no danger of hidden provisions regarding minimum wages and other benefits hidden in other sources or levels of law.

Social Insurance:
Under the Australian Employment Law all employers have a legal obligation to make 'superannuation contributions' for its employees, which refers to compulsory minimum contributions to regulated private pensions funds. This currently amounts to 9% of 'ordinary time earnings' ('OTE') up to A$45,750 per quarter with a potential increase to 12% in 2019/2020. The OTE is calculated by taking the total of the employee's earnings in the ordinary hours of work and extra over-award payments or commission. Failure to pay these contributions subjects employers to a tax called a 'superannuation guarantee charge' ('SGC'). The SGC consists of the amount of the shortfall together with an interest component and an administrative charge. However, there is no limit to the amount of contributions an employer can make for its employees. Furthermore, each Australian state has its own rules in regards to the compulsory contributions for social insurance. However, the general rule is that besides these contributions the employers do not have legal obligations to provide any further benefits unless this is required by a relevant 'modern award' or Enterprise Agreement. In practice employers tend to codify these requirements in the contracts of employment and provide further benefits for certain employees. Thus, although there are no explicit legal obligations to contribute to a significant amount of social insurance schemes, which is the case under Article 2 of the the PRC Social Insurance Law (2007), in practice the Australian Employment Law resembles strict contributions regime that exists under the Chinese Employment Law. Nevertheless, it must be reinforced that the Chinese Employment Law is stricter on legal obligation for social insurance contributions.

Non-compete clauses:
The Australian Employment Law provides for the possibility of restrictive covenants, such as non-compete clauses, to be inserted into the employment contracts. Moreover, the common law courts developed extensive rules that allows employers to impose restrictions upon their employees during and after termination of employment. The employees are bound by a range of duties during their employment, which can be enforced to restrict their activities and protect the employer's business. The Australian Employment Law shares a lot of the same sources with the UK Employment Law, as well as other common law countries, regarding the protection of employers' businesses through restrictive covenants. Therefore, to enforce the restrictive covenant the employers must prove that the restraint is no wider than is reasonably necessary to protect their legitimate business interests. If the employers fail to prove this the non-compete clause will be void entirely. However, the common law position is modified in New South Wales, which is one of the Australian states, where the courts have a discretion under the Restraints of Trade Act (1976) (NSW) to rewrite an unenforceable restraint clause to make it reasonable and enforceable. Furthermore, any payments by the employers to the employees during the restraint period is regarded favorably by the courts. Hence, the lack of an express legal provision that allows the employers to include the non-compete clauses does not imply the lack of such a right but a different source to statute. In the Australian Employment Law this source is the judgements of the common law, whereas in the Chinese Employment Law it is codified in Article 23(1) of the PRC Labor Contract Law (2007). Additionally, the latter offers a much greater degree of certainty.

Intellectual Property:
Under the Australian Employment Law, the mere existence of the employment relationship does not automatically afford to the employer the ownership of intellectual property rights created by the employee during the contract employment. Thus, for such an assignment of ownership the employer and the employee are free to insert an express contractual term into the employment contract. Nevertheless, there are certain exceptions to this rule under some further legislation. For example, the Copyright Act (1968) identifies that the employer owns the copyright in works developed by an employee under a contract of service or apprenticeship, provided that this was contained in the terms of their contract. The Designs Act (2003) allows the employer to be entered as a registered owner if the employee created the design in the course of employment. Moreover, the right of ownership by the employer of patents and trademarks was implied by the courts arising from the fact of employment and the employees' responsibilities during that relationship. However, in practice employers in Australia codify the protection of any intellectual property or confidential information into the contracts of employment to avoid the issue of ownership at a later date. Therefore, the position under the Australian Employment Law is similar  to the Chinese Employment Law because neither provide for an express right to protect the intellectual property under the employment relationship but provide sophisticated protection through supplementary legislation and court decisions. However, Article 23(1) of the PRC Labor Contract Law (2007) expressly codifies the right of employers to insert clauses to protect any confidential information obtained by the employees during the contract of employment. Hence, it may be argued that the Chinese Employment Law offers even more solid protection to the intellectual property rights than the Australian Employment Law.

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