Employment arises from a contractual obligation between an employer and an employee where an employee agrees to work for the employer in return for wages or salary.
Much of Fair Work Act establishes minimum standards in relation to minimum wages and entitlements and an employment contract cannot “contract out of” these minimum standards.
An employment contract can be written, oral or partly written and partly oral. An Offer Letter may also constitute an employment contract.
An initial written contract of employment can have terms incorporated into the contract through subsequent agreements such as workplace codes of conduct and company policies.
Types of Employment and Entitlements.
Employment may be permanent full time, permanent part-time or casual.
Permanent Full Time
A Permanent Full Time employee is usually contracted to work 38 hours a week.
Full Time employees are entitled to receive:
- paid leave ( including personal carer’s leave, holiday pay, sick leave etc)
- minimum termination notice and
- redundancy pay in the case of redundancy if the employer employs 15 employees or more.
Permanent Part Time
Part-Time employees usually work less than 38 hours a week. Hours of work are usually regular, with little change on week to week basis. Part-time employees are entitled to same entitlements as Full Time employees, but on a pro-rata basis.
Casual employees are employed to work on an irregular basis. This means there is no certainty that they would work any particular roster. Casual employees are not entitled to:
- paid leave (personal carer’s leave, holiday pay, sick leave and so on).
- minimum notice requirements, if employment is terminated, or redundancy pay.
However, Casual employees usually receive a higher hourly rate of pay as compared to part-time or full-time employees. This is referred to as a casual loading.
Legislative Bodies Dealing with Workplace Disputes
The Fair Work Commission (FWC)
The FWC deals with a number of employment disputes such as:
- unfair dismissal;
- general protections termination of employment applications;
- disputes about a matter in a modern award or in an enterprise agreement;
- industrial action (such as strikes by employees and lock outs by employers) and authorising, suspending or terminating industrial action; and
- making determinations, such as workplace determinations where parties are unable to come to agreement.
Fair Work Ombudsman (FWO)
The FWO has a different role than the FWC and provides services in relation to:
- identifying and calculating the proper wages and entitlements payable;
- providing information about workplace rights and responsibilities;
- investigating complaints, generally in response to a request by an employee or employer; and
- enforcing compliance with workplace laws.
The FWO is separate from the FWC and makes all of its decisions independently of the government and any other person.
Federal Court of Australia and Federal Circuit Court of Australia: Fair Work Division
In some circumstances, a person seeking relief must first go through the FWC procedures prior to taking the matter to court such as unlawful termination applications requires a certificate from the FWC.
The Courts can provide a number of remedies such as compensation, reinstatement of employees, payment of fines, and injunctions to stop or prevent a person from contravening a law.
Wrongful Terminations and Unfair Dismissal
If an employer terminated an employee prior to the end of a fixed term contract, or an employee is dismissed during an ongoing contract, there may be a claim for damages in relation to the notice specified in the employment contract, or a “reasonable notice” where there is no notice included in the contract. The question of what is reasonable will depend on various considerations such as the length of employment, employee’s age, seniority and salary.
The damages that can be claimed are limited to the salary that the employee would have earned had notice been given. An employment contract can however be terminated by an employer without notice in case of serious misconduct by the employee.
Unfair Dismissal provisions provide protection to the employees against harsh and unfair dismissal.
An employee is unfairly dismissed if:
- the person has been dismissed; and
- the dismissal was harsh, unjust or unreasonable; and
- the dismissal was not consistent with the Small Business Fair Dismissal Code (in the case of a small business employer who employees less than 15 employees); and
- the dismissal was not a case of genuine redundancy.
Employees who may be excluded from the Unfair Dismissal provisions include:
- those employed for less than six months (12 months in the case of small business employers who employ less than 15 people)
- those on a seasonal contract and the season has ended
- those engaged on a casual basis for a period less than six months; and
- those on a contract of employment for a specified task and the task has been completed
Lodging an Unfair Dismissal Claim and Time Limits
Applications for Unfair Dismissal must be filed with the FWC within 21 days of the dismissal. The FWC has discretion to accept late applications, although it strictly enforces the time limit and only allows extensions of time in exceptional circumstances.
If an employee succeeds in an Unfair Dismissal Application, the FWC may order:
- reinstatement to the person’s former position
- re-employment in another position
- compensation up to a maximum of six months’ wages