Missions, posts and international organisations can employ Australian citizens or permanent residents as locally engaged staff (LES). They cannot sponsor persons from their own or third countries to work in non-accredited roles in their offices in Australia. Protocol Branch must be informed when a LES employee begins or finishes employment by completing a Locally Engaged Staff Member Commencement/Departure form [PDF].

10.1 Application of local labour laws

LES have legal recourse on workplace issues. Under the Foreign States Immunities Act 1985, a foreign state is not immune in legal proceedings about the employment of Australian citizens and permanent residents as LES in foreign missions and posts.

LES employment conditions must meet Australian workplace standards, including minimum wages, leave, safety and protection from unlawful discrimination and harassment. Foreign missions should familiarise themselves with Australian national legislation including:

• Fair Work Act 2009
• Fair Work Regulations 2009
• Sex Discrimination Act
• Racial Discrimination Act

and with relevant state and territory legislation.

Some embassies and consulates may qualify as a small business. To qualify as a small business under the Fair Work Act, an organisation would need to meet the definition as defined under section 23 of the Act. Businesses and organisations cannot opt out of the minimums of the awards where award coverage exists. The coverage is automatic, provided the employer is performing duties and roles covered under an award.

10.1.1 Clerks Award

The Clerks Award covers employers in the private sector and their employees engaged in clerical work. Courts have found employees of foreign embassies or consulates who do clerical and administrative work to be covered by the Clerks Award.

10.1.2 Miscellaneous Award

The Miscellaneous Award can cover employees who are engaged by a foreign state or a consular officer and who do the following work:

• driving
• cooking or catering
• cleaning
• gardening or maintenance
• nanny work.

10.1.3 Award free

The Miscellaneous Award doesn't cover employees engaged in professional or managerial roles. Employees who aren't covered by the Miscellaneous Award, the Clerks Award or an industry or occupational award, are award free. At the point of being award free, employers would provide terms and conditions from the National Employment Standards, and the National Minimum Wage Order.

More information on coverage both under awards and the Fair Work Act can be found here: Award coverage for employees of embassies & consulates (Fair Work Ombudsman).

If an employee engaged by a foreign state or a consular officer is undertaking work not listed above, please contact the Fair Work Ombudsman (FWO) directly to discuss award coverage.

More information on minimum statutory terms and conditions is available from the Fair Work Ombudsman website or by emailing myaccountservices@fwo.gov.au.

Missions should seek local legal advice to ensure that their recruitment and employment processes are fully compliant with Australian laws and reflect best practice.

10.2 Tax

LES must pay Australian income tax on their earnings. Employers, including foreign missions and consulates, are required by law to withhold tax from payments made to LES and pay this to the Australian Taxation Office (ATO). To comply with their obligations under Australia's 'pay as you go' (PAYG) tax withholding system, missions must:

• register with the ATO to withhold tax from payments made to Australian employees, known as Pay As You Go (PAYG) withholding
• use the ATO's online calculator or tax tables to calculate how much tax to withhold
• pay and report withheld amounts to the ATO
• provide an annual payment summary to each LES employee by 14 July
• lodge a PAYG withholding annual report with the ATO by 14 August.

The withholding must be done at the time that the payments are made. It is important to provide the payment reference number (PRN) in the reference field every time you make a payment with BPAY®. This guarantees the money goes to the right account without delay.
As an employer, foreign missions and consulates are also liable to fringe benefits tax (FBT) on fringe benefits provided to their employees. Examples of fringe benefits include:

• car parking
• paying an employee's gym membership
• accommodation

More examples of what are and are not fringe benefits can be found on the ATO website. Fringe benefits tax (FBT).

Information is available on the ATO website or by calling 13 28 66 between 8am and 8pm Monday to Friday and 10am and 4pm on Saturday, except on national public holidays. If calling, ensure that you have your withholder payer number (WPN) and contact details. This allows the ATO to identify a caller without a TFN.

10.3 Superannuation

Employers, including foreign missions and consulates, are required to pay Superannuation Guarantee (SG) contributions for eligible LES to a super fund. SG is the minimum super you must pay each quarter for each eligible employee to avoid paying the super guarantee charge (SGC). SG is based on the employee's ordinary time earnings multiplied by the current super guarantee rate. The easiest way to work out the SGC is to use the Super guarantee charge (SGC) statement.

More information on superannuation guarantee arrangements is available on the ATO website or by calling 13 10 20 from 8am to 6pm Monday to Friday.

10.4 Workplace health and safety

Australian law requires employers, including foreign missions and consulates, to provide a safe working environment for staff. This involves identifying health and safety risks and taking appropriate risk management steps. Safe Work Australia and workplace health and safety authorities in each state and territory are responsible for enforcing workplace health and safety laws and can provide more information.

Compensation for staff who are injured or become ill at work is the responsibility of the employer. Employers are generally required to hold approved workers compensation insurance policies for employees. LES can take legal action in respect of work-related injury or illness. Missions and consular posts are encouraged to maintain appropriate workers' compensation insurance cover in respect of LES.