Australia: Operating a Business

In this page: Legal Forms of Companies | The Active Population in Figures | Working Conditions | The Cost of Labour | Management of Human Resources

Legal Forms of Companies

Sole Trader: Number of partners: 1 person.
Capital (max/min): No minimum capital.
Shareholders and liability: The liability of the sole trader is unlimited.
Private or Proprietary Company: Number of partners: One or more.
Capital (max/min): No minimum capital.
Shareholders and liability: The partners' liability is limited to the amount of capital contributed.
Public Company: Number of partners: One or more.
Capital (max/min): No minimum capital.
Shareholders and liability: The partners' liability is limited to the amount of capital contributed.
Partnership: Number of partners: Two or more.
Capital (max/min): No minimum capital.
Shareholders and liability: Liability is joint and unlimited for all partners.
Limited Partnership: Number of partners: At least one general partner and one limited partner.
Capital (max/min): No minimum capital.
Shareholders and liability: Unlimited for general partner, limited to capital for limited partner if they do not participate to the company management.

Business Setup Procedures

Setting Up a Company	Australia	OECD
Procedures (number)	3.00	5.21
Time (days)	2.00	9.47

Source: The World Bank - Doing Business, Latest data available.

The Competent Organisation: Australian Security and Investment Commission (ASIC)
For Further Information: Consult Doing Business Website, to know about procedures to start a Business in Australia.
Australian Business Register

Financial Information Directories

ASIC - Register of the Australian Securities and Investments Commission

Dun & Bradstreet - Worldwide directory with financial information on businesses

Recovery Procedures

Principle: Via Debt collectors who are paid on commission, then through the legal framework and the appeal system. Up to 40 000 AUD: recoverable by a local court. Up to 750 000 AUD, by a District Court, and above this by the High Court.
For further information, consult FINDLAW AUSTRALIA.
Minimum Debt-to-Capital Ratio Triggering Liquidation: According to Australian legislation, a company starts being in a bankruptcy situation either when a creditor files a claim with the Insolvency and Trustee Service of Australia which sends a bankruptcy notice, or when there is a creditor petition. The Federal Court determines whether the company has committed an act of bankruptcy.
Bankruptcy Laws: Bankruptcy Act 1966 (en anglais)
Amendment Act 2007
Reorganization and Rehabilitation Laws: Bankruptcy Act 1966 (en anglais)
Amendment Act 2007

The Active Population in Figures

	2018	2019	2020
Labour Force	13,253,656	13,500,080	13,452,598

Source: International Labour Organization - ILOSTAT, Latest data available.

	2017	2018	2019
Total activity rate	77.51%	78.07%	78.51%
Men activity rate	82.68%	82.95%	83.20%
Women activity rate	72.34%	73.18%	73.82%

Source: International Labour Organization - ILOSTAT, Latest data available.

Working Conditions

Opening Hours
Legal Weekly Duration: 38 hours
Maximum Duration: Maximum duration: 10 hours a day and 48 hours a week.
Night Hours: Between 9pm and 6am.

Working Rest Day: 2 days a week, generally Saturday and Sunday.
Paid Annual Vacation: 4 weeks' vacation.
Retirement Age: There is no legal retirement age. Retirement is negotiated with the employer.
However, employees are authorised to request a pension as follows:
- Men: from 65
- Women: 64.5
Child Labour and Minimum Age For Employment: In New South Wales, Northern Territory, South Australia and in Tasmania the minimum age is 14 years for casual and part time employees.
In Victoria the minimum age is 15 years.
In Queensland the Child Employment Act requires employees who have not yet finished year 10, to provide parental consent to commence work. Employees under 16 may only work 12 hours during a school week (38 hours a week during school holidays), with each shift being a maximum of 4 hours Monday to Friday and 8 hours Saturday and Sunday.
In Western Australia the employees under 15 years of age need to provide parental consent to commence work. For legislative reasons employees under 16 year of age may not work during school hours and those under 15 years of age may only work between the hours of 6am to 10pm.
In Australian Capital Territory the recommended minimum age for full time employment is school leaving age (i.e 15 years of age). It is possible to be employed below this age for a maximum of 10 hours per week. However if you wish to be employed for more than 10 hours per week, prior approval must be obtained from the Chief Executive of the Department of Housing, Disability and Community Services.
Informal Labour Market: Undeclared work is made up especially of working hours only partially declared and undeclared overtime. Moonlighting is a reality in Australia.

The Cost of Labour

Pay

Minimum Wage: The national minimum wage is $753.80 per week, for a 38 hour week, or $19.84 per hour.
Average Wage: In 2019, the average annual wage had reached $ 54,401 in Australia.
Other Forms of Pay
Pay For Overtime: Saturday work is 1.5 times the basic hourly rate and Sunday work twice the basic hourly rate.
Pay For Rest Days Worked: Leave loading exists in Australia: +17.5% of the hourly rate for vacation days.
Pay For Night Hours: + 30% of the rate on a full-time basis.
Pay For Overtime at Night: Double the hourly rate.

Social Security Costs

The Areas Covered: Medicare covers an essential part of health expenses.
Contributions: Contributions Paid By the Employer: A supperannuation fund or retirement savings account contribution of 9.5% of the employee's ordinary time earnings (OTE) base (up to AUD 50,810 per quarter) is paid by employers. This rate is expected to be maintained until 30 June 2021. From 1 July 2021, the rate will increase to 10% and will progressively increase up to 12% from 1 July 2025.
Contributions Paid By the Employee: There are no social security taxes in Australia. However, a levy is imposed on taxable income and reportable fringe benefits of residents for the funding of a National Health Scheme (Medicare). The Medicare levy of 2% applies to residents that qualify for the service.
Competent Organization: Australian Fair Pay Commission

Management of Human Resources

Recruitment

Method of Recruitment: More and more applications are made by Internet. The classic method of preliminary interviews with agencies then recruitment by face to face interview is practised in Australia.
Recruitment Agencies: Michael Page.
Recruitment Websites: CareerOne
My Career (en anglais)
SEEK
Government agency

The Contract

Type of Contract: There are two main types of work contracts. These are the permanent and fixed-term contracts. A permanent contract is an individual contract in which an employee is employed on a ongoing basis until their employer ends the relationship. The fixed-term employment contract is similar in terms of employee rights, but ends after a specific period of time or the completion of a task. All Australian employees are entitled to contracts that, at minimum, uphold the rights stipulated in the Fair Work Act of 2009.
Awards are industry-specific standards that stipulate working conditions and minimum-wage rates. Enterprise agreements are tailored to suit particular enterprises. For more information, visit the FWC.

Breach of Contracts

Retirement: There are no different forms of retirement in Australia and no minimum age for retirement. In the 2010-11 Federal Budget the government announced that the superannuation guarantee rate will gradually increase from 9 % to 12% between July 2013 and July 2019.
Dismissals: An employee who is dismissed has only one week's notice (none at all in the case of dismissal for professional misconduct). There is no administrative authorization for dismissal.
Labour Laws: Consult Doing Business Website, to obtain a summary of the labour regulations that apply to local entreprises.

Dispute Settlement

Conciliation Process

Cases of Dispute: Unfair dismissal or unlawful termination. The number of industrial disputes is low by historical standards but has been increasing. In the year ended September 2012, 302,000 working days were lost due to strikes compared to 214,000 during the previous year. 206 industrial disputes were recorded compared to 190 during the previous year.
Legal Framework: Before going to court, there is a conciliation procedure. This is carried out within the framework of the commission (AIRC) whose very function is to settle disputes. The commission conducts hearings, etc.
Procedure: Defined in the Workplace Relations Act 1996.
A transition Act was passed by Parliament on 28 March (Transition to Forward with Fairness) Act 2008.

Judicial Structures

Legal Framework: Defined in the Workplace Relations Act 1996.
Competent Legal Body: Australian Industrial Relations Commission (AIRC)

Social Partners

Social Dialogue and Involvement of Social Partners: There are about 132 unions in Australia organised by trade associations.
Because of the increase in the proportion of the workforce which is not unionised, the credibility of the unions has diminished over the last few years, but strong relations continue to exist between unions and the Labour Party.
Legal provisions govern work contracts. The 2009 Fair Work Act and other laws passed have insured a national standard of workplace arrangements.
The new system provides a unique ensemble of simple rules, which can be applied nationally. The Workplace Relations Act which includes the new rules for WorkChoices is available for downloading.
The main responsibility of the Fair Work Ombudsman (OEA) is to supervise the enforcement of agreements in the work context. The OEA also provides:
- advice and information for employers and employees who wish to draw up a contract together
- assistance for employers and employees to understand the Australian Fair Pay and Conditions Standard
- it verifies the legitimacy of agreements between employers and employees before they come into force
- it explains the content of agreements to people with specific needs (for example: young people or people from a non-English speaking background).
Unionisation Rate: In Australia it is not compulsory to join a union. Unions are represented by the Australian Council of Trade Unions (ACTU); these represent more than 2 million Australian workers, i.e. 22% of the labour force.
Labour Unions: Australian Council of Trade Unions (ACTU)
Regulation Bodies: Department of Education, Skills and Employment

Any Comment About This Content? Report It to Us.