What are a company’s obligations to its employees?

improving employee morale

A company has a number of obligations towards its employees and these are enforceable by law. It is important to engage with employee’s to find their needs and wants, these should be adequately engaged with to ensure staff morale is maintained and turnover is reduced. Ultimately, keeping your employees satisfied, happy, productive and safe can enhance the image of your company. 

Key Points

  • Obligations must be upheld by companies to ensure they are meeting their expectations;
  • Companies must be aware of their obligations surrounding tax, pay, time off, superannuation, health and safety; and 
  • Employees will feel valued if these obligations are met and satisfied. 

General Obligations to Employees

Briefly, there are a number of obligations that an employer owes towards their employees. These can include an understanding of the following concepts: 

  • Record keeping;
  • Pay;
  • Payslips; 
  • Termination; 
  • Industrial relations system; 
  • Equal opportunity (e.g. gender, age, marital status, religion, race and pregnancy);
  • Tax;
  • Super;
  • Employment records;
  • Leave entitlements;
  • Maintenance of a safe workplace;
  • Discrimination;
  • Unpaid arrangements;
  • Workers compensation; and
  • Injury management. 

The abovementioned obligations are known as ‘non-negotiables’, essentially this means these are required in the day-to-day management of employees. 

Crucial Areas

Your attention should be drawn to the following areas to ensure your obligations are sufficiently met. 

  1. Tax

Australia has a taxation system known as Pay-As-You-Go (PAYG), designed to withhold tax from payments to employees. Essentially, a company is required to withhold a certain amount of tax from the payments you are making to them. As an employer, there are a range of aspects to be across including registering for PAYG withholding, knowing the status of your employees, knowing the amount to withhold for each person, and being prepared to report and pay the Australian Taxation Office (ATO).

  1. Pay

It is critically important that your employees are paid correctly. As an employer, it is your responsibility to ensure these employees are paid correctly and ensure everything they are entitled to is received. Across Australia, employers are required to pay their employees the minimum wage. In addition to this, an employer must provide an employee with a payslip within one working day of receiving their pay. These must include the employee’s details, contain the details of payment, superannuation, bonuses, deductions and tax. 

  1. Time Off

Time off is important for employees and it is crucial that companies coordinate how time off is to be managed. There are a range of circumstances where an employee may need time off including when they are sick, need to care for someone, or otherwise take paid leave. Every employee, apart from casual employees, are entitled to accrue paid leave based on their ordinary hours of work. Generally, full-time and part-time employees are entitled a minimum of 10 days of sick leave each year and a minimum 20 days of annual leave each year. The National Employment Standards (NES) provide guidelines and further information regarding leave entitlements. 

  1. Superannuation

Superannuation is a contribution that is given to employees throughout their working life into their eligible superannuation account to provide for them once they retire. For employers, contributions must be paid at least every quarter. Most companies set up their payroll systems to complete this task automatically. 

  1. Workplace Health and Safety

Maintaining a safe workplace is required by the Workplace Health and Safety Act 2011 (Cth) to ensure risks and safety hazards are diligently managed. Companies are responsible for First Aid training within your workplace and ensuring that appropriate emergency plans are in place. It is important to ensure your company has appropriate insurance and workers compensation in place through providers such as WorkCover.  

  1. Additional Obligations

Areas that are often overlooked include recording keeping, dealing with trade unions, and dealing with discrimination.

Companies must remember that employee records are confidential and cannot be disclosed without a lawful reason. Workplace inspectors also have the ability to investigate your records and it is important to keep employee and other important records for seven years. 

Further, you should be aware of your employee’s right to join a trade union. It is important to acknowledge that discrimination against an employee of any kind in the workplace is unlawful, including in relation to their trade union membership. 

The obligations that a company must provide to their employees can at times be onerous and are constantly developing. Despite this, it is critically important to ensure that your company complies with all your legal obligations. A failure to do so could result in legal action or civil penalties brought against you and your business. 

It never hurts to go over and above for your employees, as doing so generally reflects positively upon your company!

Are your employee agreements in order?

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How can we help? 

To reduce the strain of everyday processes and legal compliance, it will be beneficial to utilise legal document templates within your business. Click here to view a comprehensive library of legal document templates which will free up time to foster better relationships with your staff and clients. Contact us at info@businesskitz.com.au or by calling 1300 988 954 for further support with your business needs. 




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