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s38Conveyancing act NSW applies to witnessing deeds: http://www.austlii.edu.au/au/legis/nsw/consol_act/ca1919141/s38.html

The legislation around this is found in the conveyancing act (in NSW) and a witness cannot be a party to the deed. Is an employee of a party a party? = I don't know, but best to avoid the situation I think. If the document is not a deed then I am note sure if there is any requirements...

Yes, not a good idea on his part.

Good question. I would think it does because the agency itself is an interested party. Just think of what could go wrong - one party to the contract denies signing it. The witness, is the agency person and the agency benefits out of the agreement. Probably not good evidence for a court.

Yes, a party to the lease cannot witness. The agent is acting as agent for the landlord so they are a party.