澳大利亚并购交易中的就业问题：买家需要注意的常见危险信号

Common red flags for buyers to be aware of Australia – June 2026 In Australia, employment-related issues are becoming increasingly important for buyers in M&Atransactions – and not only in the due diligence stage, but also in the negotiation of transaction The employment landscape in Australia is complex, heavily regulated and constantly evolving. When employers arenoncompliant (even inadvertently), it can give rise to serious legal, commercial and/or reputational risks. In such an environment,employment due diligence is no longer just a “box-ticking” exercise, and it is important that buyers “look under the hood” to The risks that could become relevant for the buyer will depend on the type of transaction (i.e. whether it is an asset purchase, ashare purchase, or a combination of both). This article explores some of the common red flags that buyers need to be aware of. Notice periods and restraints Given these nuances, we strongly recommend thatemployment agreements of key employees are reviewedby an employment counsel, to ensure key deficiencies areidentified and appropriately addressed either before orafter completion. The risks may be sufficiently important Whether it is an asset purchase or a share purchase, a buyer’sability to retain key employees and restrain their post- Buyers should ensure that key employees are subject tonotice periods that provide sufficient protection in the eventthe key employee resigns post-completion. At times, wecome across employment agreements that contain a noticeperiod of, say, one or two months, or in accordance with Contractor misclassification Another important issue to highlight is the potential formisclassification of contractors and employees. In Australia,following the second tranche of “Closing Loopholes”amendments in theFair Work Act2009(Cth) (FW Act) inAugust 2024, the meanings of “employer” and “employee” Further, buyers should not assume that post-employmentrestraints are enforceable just because they are includedin an existing employment agreement. In Australia, post-employment restraints are only enforceable to the extentthey are reasonably necessary to protect the employer’slegitimate business interests. More often than not, restraintprovisions are poorly drafted, omitting cascading or “menu”style definitions of “restraint periods” or “restraint areas”,and, in some cases, are not subject to any geographical or This means, for example, if a business engages a “contractor”who works regular hours, is paid an hourly rate and hasreporting lines within the business, there is a real risk thatthe “contractor” may be found to be an employee, even ifthey are engaged on a written “independent contractor”agreement. This risk is heightened for contractors who A buyer could face liability if a contractor seeks to challengetheir contractor status and claim employee entitlements(such as statutory leave and superannuation) post-completion. If a contractor is found to be an employee, theywill have unfair dismissal rights (subject to the eligibility Where significant risks are identified, buyers should seekappropriate protections in the transaction documents tomitigate loss in the event that enforcement action is takenagainst the target post-completion for any pre-completionconduct. Depending on the circumstances, it may beappropriate for buyers to seek specific indemnity protection As such, buyers should review the target’s contractorarrangements to assess whether there is any risk of anemployment relationship and, where required, place thecontractors on a more robust contractor agreement that Underpayment of wages: Award covered Against the backdrop of cases likeFair Work Ombudsmanv Woolworths Group Limited & Ors1(FWO v Woolworths &Ors)(see related article), employers in Australia are facingheightened risks where they have underpaid their employees, Work health and safety Unsafe worksites make headlines for all the wrong reasons.This is especially true in mining and trade-based industries,where workplace injuries remain a persistent and all-too- Notably, just because an employee is paid an annual salarythat exceeds their award entitlements over the course ofa year, does not mean an underpayment risk is eliminated. In Australia, all “persons conducting a business orundertaking” (PCBUs) (which includes employers) have anobligation under work health and safety (WHS) laws to ensurethe health and safety of their workers, as far as reasonablypracticable. This obligation extends to “psychosocialhazards”, requiring employers to manage safety risks thatmay arise from things such as excessive workloads, lack •Ineffective set-off clause– A set-off clause in anemployment contract allows an employer the contractualability to pay an annual salary and set off the salaryagainst any amounts payable to the employee at law (e.g.under a modern award). A set-off clause must be drafted •Set-offs across pay periods– Even where a set-offclause is effective, set-offs can only