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What did employment law before COVID-19 look like?
Employment Law Before COVID-19
What happened to all those employment contracts when we went into lockdown?
In this update about employment law before COVID-19, Damien Gooden of HR Central will walk you through the rules that usually apply when you are not in the middle of a lockdown.
Here is what we learned but please listen in as Damien explains all this much better than we ever could.
To listen while you drive, walk or work, just access the episode through a free podcast app on your mobile phone.
Legislation
Think of it as a pyramid. At the bottom you have the Fair Work Act 2009 and National Employment Standards. Above this the modern awards, then enterprise agreements and then at the top contracts and case law.
The Fair Work Act 2009 (Cth) governs most people’s employment in Australia. In addition, you have federal, state and territory legislation that govern areas like health and safety and non-discrimination.
The Fair Work Commission (the “FWC”) determines modern awards that cover a certain type of job, often within a specific industry. These modern awards provide an additional safety net of minimum pay rates and employment conditions.
An enterprise can go beyond this and set up a so-called enterprise agreement, but the employees covered by this enterprise agreement must always be “better off overall” than under the relevant awards.
And then there is the contract of employment as well as common law (aka court cases) who fill in any gaps, particularly for those who are not covered by an award or enterprise agreement.
Contract of Service v Contract for Services
A contract of service is an employment contract, covered by employment law. Anybody entering a contract of service enjoys particular legal protection.
A contract for services is made between independent contractors and is not covered by employment law, hence enjoys a lot less protection.
To tell one from the other, you look at the totality of the employment relationship. To provide some protection for independent contractors, the FW Act uses an expanded definition of “worker”.
Contract
Contracts of employment do not have to be in writing. An oral agreement or a handshake might be all it takes to make somebody an employee.
Even if there is no written contract, you must provide your employees with a copy of the Fair Work Information Statement, advising them of their rights under the National Employment Standards.
Implied Terms
An employment contract – just like any contract – includes implied terms – implied by fact, custom or law.
Terms implied by law are the most significant and include the employee’s duties of good faith and fidelity, to work with skill and diligence, and to obey lawful and reasonable orders. Most implied terms can be excluded by the express terms of the contract.
National Employment Standards
The National Employment Standards set minimum standards of employment for award- or agreement-free employees. A contract can not undercut these standards. Nor can an award or enterprise agreement.
These employment standards cover maximum weekly hours, flexible working arrangements, parental and community service leave, annual and long service leave, personal carers’ and compassionate leave, public holidays, notice of termination and redundancy pay as well as handing out a copy of the Fair Work Information Statement.
Termination
You can end somebody’s employment for unsatisfactory performance, misconduct or when the position has become redundant. When you do terminate somebody, always explain why and allow them to respond.
Termination usually requires notice within a notice period, with one exception: serious misconduct. In the case of serious misconduct you can terminate employment without notice. This is called summary dismissal.
For unsatisfactory performance, make sure you document how you have communicated performance issues in the past and given plenty of opportunities to improve. Just to prevent any claims of unfair dismissal.
For a redundancy to be genuine, document that you have considered reasonable redeployment opportunities.
Claims
An employee can potentially claim any one or a combination of the following: 1 – unfair dismissal, 2 – general protections, 3 – unlawful termination, 4 – discrimination, 5 – reasonable notice or 6 – breach of contract. Most complaints to the Fair Work Commission are regarding unfair dismissals.
Remedies vary in accordance with the particular claim, but are usually for reinstatement or compensation.
Fair Work Commission
The Fair Work Commission dealt most complaints, but some go to the Federal Court of Australia or the Fair Work Division of the Federal Circuit Court.
The Fair Work Commission offers conciliation (also called mediation). If this fails, the matter goes to a hearing, which is very rare. The vast majority of unfair dismissal claims don’t go to a hearing, but settle before.
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Disclaimer: Tax Talks does not provide financial or tax advice. All information on Tax Talks is of a general nature only and might no longer be up to date or correct. You should seek professional accredited tax and financial advice when considering whether the information is suitable to your or your client’s circumstances.
Last Updated on 04 October 2024
Tax Talks spoke to Damien Gooden - CEO at HR Central - for more details.
