Navigating Employee Separation Laws in Australia: What You Need to Know and Ask

Respected Seniors,

Employee Separation and Termination Laws in Australia

What are the laws related to employee separation/termination in Australia?

Leave Balance for Employees Transferred Internationally

What happens to the leave balance of an employee if they are transferred/deputed to another country from India on a long-term work permit/visa? Could anyone provide me with some links to research on this?

Thank you.

To ascertain which law is binding, please let the forum know a few more details. For example, is the company Indian? What does the termination/separation clause state in your appointment letter? Providing these details will enable us to give you appropriate responses.

Yes, our company is an Indian company. I am more interested in knowing what laws are applicable if I plan to move to another company. What should be the notice period I should provide to my employer as per Australian law, regardless of what I have signed in my contract with my employer?

Moreover, could you also help me understand what leaves are entitled to an employee for a one-month period in Australia and how I should claim my leave balance payment?

Yes, our company is an Indian company. I was more interested in knowing what the applicable laws are if I plan to move to another company. What should be the notice period I should provide to my employer as per Australian law, regardless of what I have signed in my contract with my employer?

Moreover, could you also help me understand what leaves are entitled to an employee for a period of one month in Australia and how I should claim from my leave balance payment?

I am based in India, so I am unaware of Australian law. However, if your company is Indian, then the termination clause in your appointment letter is binding to you and not Australian law. It is normally a one-month notice period from either side. A few companies offer the option of a buyout, wherein you can adjust the leave or pay off the notice period. It is assumed that you have been sent to Australia by an Indian company for a project on a contract agreement, so the terms of the contract agreement will be applicable to you with regards to leaves/notice period whatsoever.

Last but not least, unless the clause is provided to the forum, it will be difficult to advise.

Regards

Yes, our company is an Indian company. I was more interested in knowing what laws are applicable if I plan to move to another company. What should be the notice period I should provide to my employer as per Australian law, regardless of what I have signed in my contract with my employer?

Moreover, could you also help me understand what leaves are entitled to an employee for a period of one month in Australia and how I should claim my leave balance payment from?

Since you are working in the shores of Australia, Australian laws are applicable, irrespective of whether you signed the contract in India or anywhere else. In Australia, Australian law supersedes any agreement that you may have signed elsewhere. This principle applies universally. Any violation of this guideline attracts significant penalties on the employer, and substantial compensation is awarded to the aggrieved employee. This is why IT companies often opt for out-of-court settlements with their aggrieved employees when agreements made in India conflict with local laws in the US and Europe where employees are assigned on projects. The principles in these countries are very clear; one cannot enforce any agreement that violates their laws.

I suggest reaching out to me via private message with your email ID, and I will introduce you to the Indian HR Head of an Australian Multinational company based in Melbourne. Since you are in Australia, you can contact him to discuss your problem, and he will help find a solution for you.

Regards

I support Saji's views in this regard. You may be working at any location in the world. Logically, since you are an employee of an Indian company, you are governed by the rules as stated in your appointment letter, especially regarding resignation, notice period, leave matters, etc. Other situational things, like office timings, holidays, medical assistance, travel assistance, and other work-related rules/laws, can be under Australian rules.

I have strong doubts about the statements made by Anonymous, especially concerning resignation. If the foreign company, which is presumed to be a collaborator of the Indian company, has issued its own service rules to an Indian deputed employee, then the statements of Anonymous become true. A person who joined an organization in India, anywhere he goes in the world for work on deputation, will send his resignation to his original employer.

There are many foreigners who come to India to work in the offices of their Indian collaborators. I don't think, if he wishes to resign, he is governed by Indian office rules. He will send his resignation to his US office.

Anyway, these are my personal thoughts. I fully accept and appreciate the best and only answer given by Anonymous: “Talk directly to the HR in Australia,” for which he himself has provided references. Great job!

I support Saji's views in this regard. You may be working at any location in the world. Logically, since you are an employee of an Indian company, you are governed by the rules stated in your appointment letter, especially regarding resignation, notice period, leave matters, etc. Other situational things, like office timings, holidays, medical assistance, travel assistance, and other work-related rules/laws, can be under Australian rules.

I have strong doubts about the statements made by Anonymous, especially in matters of resignation. If the foreign company, which is presumed to be a collaborator of the Indian company, has issued its own service rules to an Indian departed employee, then the statements of Anonymous become true. A person joined an organization in India, and anywhere he goes in the world for work on deputation, he will send his resignation to his original employer.

There are many foreigners who come to India to work in the offices of their Indian collaborators. I don't think if he wishes to resign, he is governed by Indian office rules. He will send his resignation to his US office.

Anyway, these are my personal thoughts. I fully accept and appreciate the best and only answer given by Anonymous, “Talk directly to the HR in Australia,” for which he himself has provided references. Great job!!

You may sign a contract with an Indian company based in India, but the moment you obtain a work permit in another country, the law of that country supersedes any contract terms that you may have signed. If you go through case histories of the cases that have been filed against TCS and Infosys and other such companies seeking compensation for exploitation by H1B employees, you will realize how it works. As an organization, we have faced a couple of cases and have had to resort to out-of-court settlements since certain terms that are applicable in one country are not relevant in other countries, and we were counseled by the lawyers that the terms of transfer have to be aligned with the local laws where an employee is being placed. It cannot violate the local laws. Just as a case in example, in layman's language, "Procuring any type of guns in the US is legal and does not require a gun license. Will that hold good in India? No. In India, guns are licensed, and the types of guns allowed for the public are very restricted." One needs to align with Indian laws, even if you are a tourist. Why? Because Indian law is supreme in India. The same applies to any country.

Your views are very informative and 100 percent acceptable to anyone. The question which remains unanswered is whether the law in Australia is applicable to resignation as well. To whom should the person, desirous of resigning, submit the notice period? To my understanding, it will be their original Indian employer. Then, of course, the Indian HR will have a dialogue with the foreign HR and, in consultation with them, process the resignation papers.

This is really an interesting case to study. If the Indian company has issued an appointment letter stating that a one-month notice period is required, and as per the foreign company, where the person is currently working, the notice period is three months, then as per Australian law, the person should serve a three-month notice. OK, fine.

Let us talk the other way. If the Indian company has issued a letter requiring a three-month notice, and the Australian company, where they are deputed, has a rule of one month or one week, then what is the answer?

I have been working as a Global HR head for the past 11 years and have worked across three continents. I am currently overseeing HR in 44 sites in 38 countries across five continents. The issue is not about the Australian company having a different notice period from the Indian company. It's about the terms of appointment aligning with Australian law. Many times, when we transfer a person to another country, we simply issue a transfer letter stating they are transferred on the same terms and conditions and only mention the package. When the person wants to resign, we harass them to comply with Indian terms, not realizing that Indian terms are not valid in the other country. I will give you a few examples.

We have an oil well in Venezuela. As per the terms of our appointment, the notice period is three months. However, the Venezuelan government has a rule that if a person does not work in a strategic position and is in a graduate/officer/manager position, then their notice period will not be more than a month. If a person is working in a non-graduate position and is not in an executive position, then their notice period cannot exceed two weeks. The settlement needs to be paid within 24 hours of relieving; if not, there is a jail term for the HR head and the CEO. (Remember, Venezuela is a socialist country, and hence all laws are employee-friendly.) My company is headquartered in one of the ASEAN countries. We have a few Indian expats working. An Indian expat was the reporting boss of the person transferred to Venezuela. This boss started harassing him, stating that he will not relieve him and had given instructions to HR to stop all his salary until further notice with a cc to that employee. Before the Venezuelan HR team could act on the mail, the concerned employee walked into the labor office and handed over the mails to the labor officer. The labor officer and the police arrived at the doors of our office. We had a huge problem. They wanted to arrest the HR head and also the CEO. Luckily, the CEO was in Mexico on tour. The HR head was detained and taken to the police station. We then intervened and pleaded with the aggrieved employee to settle the issue by taking double the money of his settlement and withdrawing the complaint. Needless to say, the labor department and the cops made their money too.

The second example of mine indicates the laws on working hours. The working hours in India are 48 hours a week, but most countries are between 40 and 45 hours. However, France is different. We have an operation in France. In India, other than workers, no one is paid overtime, especially officers. France had 39 hours a week. But in the year 2000, when they found that unemployment was at the rate of 12%, they reduced the working hours by 12% and made it 35 hours a week so that everyone would get work. Any extra work attracts overtime. I still do not understand how this works. But then socialism never had any logic, and France is a socialist country.

We had transferred an Indian national to France. He was transferred from India. The Indian HR head did not bother to check the working hours in France and just issued the transfer orders stating the terms and conditions are the same, except for the salary. This is the normal format used. The office hours per week were 35. But this Indian expat had an Indian boss. Because the boss used to work late, he got the subordinate also to work late. Eleven months down the line, the subordinate resigned to join Total Oil Company. When his settlement check was given, he took it happily. But one week later, one of the resigned employee's friends told him that he also needed to get payment for the overtime since he put in more hours than the 35 hours a week. He wrote to the Indian boss. The Indian boss did not bother to check with HR and instead refused to pay since the resigned employee was a manager, and he was transferred on the same terms as the previous assignment. The resigned employee had, incidentally, signed the overtime sheets and handed them over to the boss when he was getting the clearances, and he was advised by the Indian boss that since he is a manager, he is not entitled to overtime and to remove the overtime sheets.

The employee then wrote to us. We passed on the mail to the France HR team. The HR team stated that he has to be paid overtime. The Indian boss said no. We insisted on getting a legal opinion, and when a legal opinion was taken, the lawyer advised us that the local laws supersede the terms of appointment. If we do not comply with local laws of working hours, then the fine that we would have had to pay would have been at the rate of 120,000 euros per week of violation. (This is calculated in terms of the size of the company). Hence, it had to be paid. And mind you, the employee got overtime pay equivalent to over seven months' salary.

I hope I have been able to clarify to you how International HR operates.

Regards

Sir, wonderful and classic response! I am really thrilled to go through your exhaustive reply, that too, in very simple language and words. Many, many thanks.

I am a new member of CiteHR, having joined only a couple of months ago, and occasionally we get the opportunity to read such posts, which are worth remembering forever, considering the value of information and knowledge stored in them.

My heartfelt special thanks to CiteHR also, who have offered us this platform to share our views. Because of CiteHR, readers like me can get an opportunity to associate with many knowledgeable, respectable, and high-designated personalities.

I am sure other readers, too, must have found your post very interesting and useful, especially to know the applicability of rules to jobs outside India.

In the first line itself, where you introduced yourself, I understood that further readings would be an intellectual lecture. And Sir, it is really a great pleasure to read each and every line written in this post, as it is justified with excellent practical true examples.

We can make use of such posts not only to keep the same in our memory by updating knowledge but also to spread such information to all the concerned people around us—colleagues, relations, neighbors, etc., who make plans for jobs abroad.

Question on Indian Appointment Letters for Employees Abroad

Coming back to the subject, with due respect to you, don't you personally feel that an Indian company, which has appointed an employee and sent him abroad for some work, when he desires to resign over there, has something to follow from the Indian appointment letter? Or is the answer still a big NO?

I hope I am not making you annoyed. Since my inner conscience and inquisitiveness are not allowing me to keep quiet, my query is repeated. Please excuse me…

Regards.

Sir ji, wonderful and classic response! I am really thrilled to go through your exhaustive reply, that too, in very simple language and words. Many, many thanks. I am a new member of CiteHR, joined only a couple of months ago, and occasionally we get the opportunity to read such posts, which are worth remembering forever, considering the value of information/knowledge stored in it. My heartfelt special thanks to CiteHR also, who have offered us this platform to share our views, and because of CiteHR, readers like me can get an opportunity to get associated with many knowledgeable, respectable, and high-designated personalities.

I am sure other readers, too, must have found your post very interesting and useful, especially to know the applicability of rules to jobs outside India. In the first line itself, where you have introduced yourself, I understood that further readings will be the intellectual lecture. And Sir, it is really a great pleasure to read each and every line written in this post since it is justified with excellent practical true examples. We can make use of such posts not only to keep the same in our memory by updating knowledge but also to spread such information to all the concerned people around us, colleagues, relations, neighbours, etc., who make plans for jobs abroad.

Coming back to the subject, with due respect to you, don't you personally feel that an Indian company, who has appointed an employee and sent him abroad for some work, when he is desirous of RESIGNING over there, has something to follow from the Indian appointment letter? Or, is the answer still a big NO? Hope I am not making you annoyed. Since my inner conscience and inquisitiveness are not allowing me to keep quiet, my query is repeated. Please excuse me…

Abhay, I understand what you are stating. One needs to understand the terms of the Visa on which the person is working. In case a person has been sent on a Business Visa, then the law of the country from where he has gone will apply. But, once a work permit is issued, the employee becomes a resident of the country of posting and hence the local laws apply.

For example, you have a customer in the United States. He has some issues and you have to visit the US to resolve it. The US consulate will issue you a B1 visa. This is basically a Business Visitor Visa. Under this Visa, you are allowed to do all duties but cannot do any activity which is considered as employment. And during your trip, you resign from the job. Then Indian terms and conditions apply because you are not a resident of the United States and you are legally employed by your Indian company.

But, instead, you are working in India and there is a project to be completed in the United States with a client. You have to be based in the United States to complete the project and cannot do it from India, similar to most IT professionals. You will be issued an H Visa and the subcategory of the Visa such as H1B or H2A or H2B will define your profile. Once you obtain this Visa, you automatically become a resident of the US. Despite the fact that you are employed with an Indian company, the laws of the United States will supersede the terms of your appointment. This is where most companies falter and misconstrue that the terms of the Indian company are applicable and in the process, get prosecuted. In fact, there are many case histories of IT companies where they have been penalized hugely for this violation.

There is also one more subcategory in the H Visa, which is the H3 Visa. In this category, say, you are being sent by your company to the United States for some training for certain skill sets with either your vendor or any parent company or any other place, which necessitates you to stay for a period which cannot be considered as a short visit, then an H3 Visa is issued. Under this category, the terms of employment of the Indian company will be applicable since under an H3 Visa you are undergoing training and are not employed in the United States.

There is also an L type of Visa. Under this Visa, you are transferred to the United States from the payrolls of the Indian company to the payrolls of the US branch or head office or the US unit, then you are a resident of the US and US laws fully apply.

Just as above, all countries have categories of Visas. So, when an employee is on a work permit, he automatically becomes a resident of that country and from that day, the laws of the country in which he is resident will apply.

Now, from the query of our friend who is based in Australia, it is very clear that he is on a work permit and not on a Business Visa. This means the laws of Australia apply and it supersedes all terms of employment. But, in case he was on a Business Visa, then the terms of the employment letter issued in India would apply, subject to compliance with Indian laws.

I hope this clarifies any doubts you may have.

Regards

Hi, I came to Melbourne on a 457 visa but obtained my 186 visa independently. Now, I am a permanent resident and have received an offer from a local company. However, my employer is requesting me to serve a notice period in India. Is it legal for the company to ask an employee to fulfill a notice period in India even when I have another job offer in Australia? Please help.