Key influences on HRM: stakeholders, the current legal framework (to September 2026), economic, technological, social, ethics and CSR (HSC Business Studies)

What this dot point is asking

The syllabus lists key influences: "stakeholders (employers, employees, employer associations, unions, government organisations, society); legal (the current legal framework; the employment contract: common law (rights and obligations of employers and employees), minimum employment standards, minimum wage rates, awards, enterprise agreements, other employment contracts; work health and safety and workers compensation; anti-discrimination and equal employment opportunity); economic; technological; social (changing work patterns, living standards); ethics and corporate social responsibility". A "students learn to" point asks you to "discuss the influence of government on the process of determining employment contracts".

Stakeholders

The legal framework (current to September 2026)

The employment contract and common law

An employment contract is a legally binding agreement between employer and employee, written or verbal, which cannot provide less than the legal minimums. Common law (judge-made law) adds implied duties:

• Employer obligations: pay wages, provide a safe workplace, reimburse work expenses, not act in a way that destroys trust and confidence.
• Employee obligations: obey lawful and reasonable directions, exercise care and skill, act in good faith (loyalty and confidentiality), account for money and property.

The hierarchy of minimum conditions

National Employment Standards (NES). Twelve minimum entitlements under the Fair Work Act that cannot be reduced by an award, agreement or contract:

1. Maximum weekly hours (38 plus reasonable additional hours)
2. Requests for flexible working arrangements
3. Casual employment rights (including a pathway to change to permanent employment)
4. Parental leave and related entitlements (12 months unpaid, with a right to request 12 more)
5. Annual leave (4 weeks; 5 for some shift workers)
6. Personal/carer's leave (10 days), compassionate leave (2 days) and paid family and domestic violence leave (10 days)
7. Community service leave
8. Long service leave
9. Public holidays
10. Notice of termination and redundancy pay
11. The Fair Work Information Statement (and Casual Employment Information Statement)
12. Superannuation contributions

Minimum wages and modern awards

The Fair Work Commission reviews minimum wages every year. Its 2026 Annual Wage Review (decision of 2 June 2026) increased modern award minimum wages by 4.75 per cent and set the national minimum wage at $26.44 an hour ($1,004.90 a week), from the first full pay period on or after 1 July 2026. Modern awards set minimum pay and conditions for industries or occupations (classifications, penalty rates, overtime, allowances, rostering).

Enterprise agreements

Agreements negotiated between an employer (or several employers) and employees, usually with union involvement, that can replace the award for the employees covered. The Fair Work Commission approves them only if employees are better off overall (BOOT) than under the award. See HRM strategies and disputes for bargaining.

Other employment contracts

Individual contracts (common for managers and professionals above award coverage, and for high-income employees), and arrangements for independent contractors, which must be genuine (sham contracting is unlawful).

Work health and safety and workers compensation

Harmonised work health and safety (WHS) laws (NSW has the Work Health and Safety Act 2011) require a person conducting a business or undertaking to ensure, so far as is reasonably practicable, the health and safety of workers, including managing psychosocial hazards such as bullying, harassment and excessive workload. Officers (directors and senior managers) must exercise due diligence. Serious breaches carry large fines and, in the worst cases, imprisonment; a Commonwealth industrial manslaughter offence has applied since 1 July 2024. Workers compensation insurance is compulsory and pays injured workers' wages and medical costs while supporting return to work.

Anti-discrimination and EEO

Federal and state laws make it unlawful to discriminate in employment on grounds such as sex, race, age, disability, pregnancy, sexual orientation, gender identity, religion, marital status and family responsibilities. Employers have a positive duty under the Sex Discrimination Act to take reasonable and proportionate measures to eliminate sexual harassment, which the Australian Human Rights Commission can enforce. Equal employment opportunity (EEO) means actively removing barriers so that employment decisions are based on merit; larger private employers report to the Workplace Gender Equality Agency, which publishes employers' gender pay gaps.

What has changed recently

Influence of government on employment contracts. Government shapes contracts through legislation (the Fair Work Act, NES, WHS and anti-discrimination laws), through the Fair Work Commission's wage reviews and award decisions, through enforcement by the Fair Work Ombudsman, and through policy (Paid Parental Leave, superannuation). An employer cannot contract out of these minimums.

Economic influences

• Labour market: when unemployment is low, businesses compete for staff and must pay more or offer better conditions; when it rises, recruitment is easier but job security falls. The ABS reported an unemployment rate of 4.5 per cent (seasonally adjusted) in July 2026.
• Inflation and living costs: rising prices (CPI up 3.5 per cent in the year to July 2026) increase pressure for pay rises in bargaining and wage reviews.
• Interest rates and the business cycle: higher interest rates (the cash rate was held at 4.35 per cent in August 2026) slow demand, leading some businesses to freeze hiring or cut costs.
• Skill shortages and migration: shortages in areas such as health, construction trades and technology raise wages for those skills and increase reliance on training and skilled migration.
• Globalisation: competition from lower-cost countries and the ability to offshore work (see role of HRM).

Technological influences

• Automation and AI change which jobs exist and the skills required, leading to redeployment, retraining and redundancies. Atlassian cut about 150 customer support roles in July 2025 as it expanded AI-based support; Telstra said in February 2026 that some roles would be affected as it worked with Infosys and Accenture to use their AI capabilities.
• HR technology: online recruitment and applicant tracking, digital onboarding and learning, payroll and rostering systems, performance and engagement analytics. These improve efficiency but raise privacy and fairness issues (for example automated screening).
• Remote and hybrid work technology enables flexible work but requires policies on performance, safety (including psychosocial risks) and the right to disconnect.

Social influences

• Changing work patterns: more part-time, casual, contract and gig work; hybrid and remote work; older workers staying longer; more women in the workforce; demand for flexibility, which the right to request flexible working supports.
• Living standards: expectations of fair pay, work-life balance, wellbeing and job security rise with living standards, while cost-of-living pressure increases the importance of pay and financial wellbeing benefits.
• Diversity and inclusion: a more culturally diverse workforce and customer base, and expectations of gender equality, First Nations employment and disability inclusion.

Ethics and corporate social responsibility

Ethical HRM goes beyond legal compliance: paying correctly and on time, not exploiting vulnerable workers, fair treatment in restructures, safe and respectful workplaces, genuine diversity and inclusion, and ethical supply chains (modern slavery reporting). Society's expectations are backed by transparency: WGEA publishes employers' gender pay gaps, and underpayment cases are publicised by the Fair Work Ombudsman. How a business handles separation is also scrutinised, as the criticism of Atlassian's pre-recorded layoff video in 2025 showed.

How this dot point appears in the HSC

• Section I: identify the stakeholder or legal instrument in a scenario, or which NES entitlement applies.
• Section II: explain the influence of the legal framework, government, or economic, technological or social factors (3 to 6 marks).
• Section III: a report stem may include legal changes or labour shortages; explain their influence before recommending strategies.
• Section IV: evaluate HRM strategies, using influences to explain why strategies are needed.