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Employment Contracts and Awards
The legal advice we provide you in this area, will depend upon a number of factors, such as the type of work performed, and whether that type of work is covered by either a federal or state award.
We have outlined some basic principles below, however care should be taken, and advice should be sought to make sure you have the correct information applicable to your circumstances.
All employers and employees are covered by the National Employment Standards (NES).
Under the NES, employees have certain minimum conditions, such as minimum entitlements to leave, public holidays, notice of termination and redundancy pay.
There are 10 minimum workplace entitlements in the NES:
- A maximum standard working week of 38 hours for full-time employees, plus ‘reasonable’ additional hours.
- A right to request flexible working arrangements to care for a child under school age, or a child (under 18) with a disability.
- Parental and adoption leave of 12 months (unpaid), with a right to request an additional 12 months.
- Four weeks paid annual leave each year (pro rata).
- Ten days paid personal/carer’s leave each year (pro rata), two days paid compassionate leave for each permissible occasion, and two days unpaid carer’s leave for each permissible occasion.
- Community service leave for jury service or activities dealing with certain emergencies or natural disasters. This leave is unpaid except for jury service.
- Long service leave.
- Public holidays and the entitlement to be paid for ordinary hours on those days.
- Notice of termination and redundancy pay.
- The right for new employees to receive the Fair Work Information Statement.
- In addition to the NES, an employee’s terms and conditions of employment can come from a modern award, agreement, pre-modern award and state or federal laws.
Modern awards cover an industry or occupation and provide additional enforceable minimum employment standards. There is also a Miscellaneous Award that may cover employees not covered by any other modern award. It is however important to note that if you are a high income earner, the modern award that covers your industry or occupation may not apply to you, but the NES will.
When an employee accepts a specific offer of employment (oral or written), a contract of employment has been established. Under this contract, both the employer and employee have certain rights and obligations.
Contracts of employment may contain provisions for probationary or ‘trial’ periods on commencement of employment and the employee must be paid during any such period.
In NSW, the parties to a contract of employment cannot agree on or contract outside wage rates or conditions of employment less favourable to those set out in the applicable award or enterprise agreement.
The contract of employment need not be in writing (but usually ought to be) and in many cases the contract is verbal. The terms of the industrial award or enterprise agreement are usually the main terms in an employee’s contract of employment.
It is a good idea to confirm any offer of employment in writing, and for the employee to accept the offer by signing a letter of appointment before starting work. The letter of appointment should cover:
- details of the job duties;
- whether the job is full-time, part-time, casual or permanent;
- the award or agreement applying to the position; and
- any special or additional conditions of employment that apply in your workplace.
The following are the terms that are most commonly found specifically talked about or written down by the parties to a contract of employment:
- Title of the position and statement of the duties;
- Wages or salary or remuneration benefits for the position;
- Hours and days of work;
- Leave entitlements;
- To whom the employee reports;
- Where the employee is to work; and
- How the contract may be terminated.
A contract of employment is legally enforceable through the courts in the same way as any other contract. However, the courts will not usually order specific performance of the employee’s contract and will not usually force an employee to work for a particular employer.
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An enterprise agreement, also known as a collective agreement sets out the minimum conditions of employment for employees engaged in particular types of work in an enterprise. They are negotiated voluntarily between an employer and the employees concerned, or a union on the behalf of those employees. A NSW Enterprise Agreement needs to be approved by the NSW Industrial Relations Commission.
An employer, before employing someone, must give the person notice that an enterprise agreement exists and access to a copy or summary of the agreement in a language that the person understands. Enterprise agreements must comply with all workplace laws and, in general, employees should not be worse off under the agreement compared to awards.
An enterprise agreement must contain the following terms:
- a nominal expiry date for the agreement which is no longer than four years from the date Fair Work Australia approves the agreement;
- a dispute settlement procedure;
- a flexibility term that allows for the making of individual flexibility arrangements; and
- a consultation term, which requires the employer to consult their employees about any major workplace changes that are likely to have a significant effect on them and allows the employees to have representation in that consultation.
It is possible to cancel an approved agreement. Whilst the agreement is within its nominal term, agreement by both parties is needed to terminate. Generally, once the nominal term has expired an agreement can be terminated by one of the parties giving the other party 3 months written notice of the intention to terminate.
Enterprise bargaining is the process which employers and employees use to negotiate a set of rules and conditions for their workplace, which results in an enterprise agreement. Other terms to describe enterprise bargaining are ”workplace bargaining” or “collective bargaining”. Bargaining on a proposed enterprise agreement begins when the employer agrees to bargaining or initiates bargaining, or when a majority support determination comes into operation, or a scope order comes into operation or a low-paid authorisation that specifies the employer comes into operation. This is known as the notification time.
Those involved in the bargaining process, including bargaining representatives, are required to bargain in good faith. The following are the good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet:
- attending, and participating in, meetings at reasonable times;
- disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner;
- responding to proposals made by other bargaining representatives for the agreement in a timely manner;
- giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals;
- refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining; and
- recognising and bargaining with the other bargaining representatives for the agreement.
The good faith bargaining requirements do not require a bargaining representative to:
- make concessions during bargaining for the agreement; or
- reach agreement on the terms that are to be included in the agreement.
If you require advice on your rights, obligations or entitlements pursuant to an Enterprise Agreement, or you believe an enterprise agreement may be right for your workplace, then we can assist you with any questions you may have.
Unfair Dismissals and Unlawful Termination
Unfair dismissal occurs where an employee’s employment is terminated by their employer and the termination is considered to be harsh, unreasonable or unjust.
If an employee thinks that they have been unfairly dismissed by their employer, it may be possible that an unfair dismissal claim can be made to the Fair Work Ombudsman. A claim can also be made for threatened dismissal.
Note that there are strict time limits applicable in the lodging of a claim for unfair dismissal. If you believe that you have been unfairly dismissed, you must act immediately to be eligible to enforce your rights.
An employee has been unfairly dismissed if Fair Work Australia (FWA) finds that:
- they were dismissed, and
- the dismissal was harsh, unjust or unreasonable, and
- the dismissal was not a case of genuine redundancy.
Whilst most employees who have had their employment terminated due on harsh, unreasonable or unjust terms will be eligible to make a claim, there are however some instances where a worker may not be eligible. Those workers who may not be eligible to file a claim are:
- apprentices or trainees;
- independent contractors;
- employees on a 3 month probation period if determined in advance;
- some casual employees;
- employees on contracts of employment for a specified period of time less than 6 months;
- employees engaged under a contract of employment for a specific task;
- employees who were employed by a small business (that is a business with fewer than 15 full time equivalent employees); or
- employees who earn more than the high income threshold (which is amended from time to time).
The law in this area is constantly changing, so even if you fall into one of these categories, you should contact us to confirm your eligibility to make a claim.
Where FWA upholds a claim, it may order an employer to:
- reinstate the employee to their former position;
- re-employ the employee in another position that the employer has available;
- provide back-pay and other entitlements owing from the time of the dismissal, where reinstatement or re-employment is ordered;
- compensate the employee by ordering payment of an amount not exceeding the remuneration of the employee during the 6 months before the dismissal, where reinstatement or re-employment is considered impracticable; or
- not dismiss the employee, where dismissal has been threatened.
An unfair dismissal occurs where an employee makes an unfair dismissal remedy application and Fair Work Australia finds that:
- the employee was dismissed,
- the dismissal was harsh, unjust or unreasonable,
- the dismissal was not a case of genuine redundancy, and
- the dismissal was not consistent with the Small Business Fair Dismissal Code, where the employee was employed by a small business.
Fair Work Australia is the national workplace relations tribunal. An unfair dismissal application must be lodged within 14 days of the dismissal coming into effect. Fair Work Australia may accept a late application but only in exceptional circumstances.
In considering whether a dismissal was harsh, unjust or unreasonable, FWA must take into account:
- whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees),
- whether the person was notified of that reason;
- whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person;
- any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal;
- if the dismissal related to unsatisfactory performance by the person whether the person had been warned about that unsatisfactory performance before the dismissal;
- the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal;
- the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
- any other matters that FWA considers relevant.
If you are an employee who believes that they have been unfairly dismissed, or if you are an employer who would like to know your obligations prior to dismissing an employee, we can provide you with advice that is specific to your circumstances.
A redundancy can occur when an employer no longer wants the job the employee is doing to be done by anyone and that the employee cannot be redeployed to another job within the business. Redundancy can occur for a number of reasons, for example:
- a downturn in production, sales, or the economy generally
- the introduction of new technology
- business relocation
- the business merges with another business, or is sold, or
- an internal company restructure occurs.
If a dismissal is a genuine redundancy it will not be considered an .
The National Employment Standards provide for severance pay in certain circumstances based on an employee’s length of service. Notice of termination must be:
- provided in writing, and
- delivered personally to the employee, or
- left at the employee’s last known address, or
- sent by pre-paid post to the employee’s last known address.
Whilst the majority of employees who are made redundant will be eligible for notice of termination and severance or redundancy pay, there are certain circumstances where notice of termination is not required, such as where the employee:
- was employed for a specified period of time, a specific task or for a specific season;
- was terminated for serious or wilful misconduct;
- is a casual;
- is subject to a training arrangement and whose employment is for a specified period of time or limited to the duration of the training arrangement, except in the case of apprentices;
- was a daily hire employee in the construction industry; or
- was a weekly hire employee working in the meat industry whose employment was determined by seasonal factors.
Redundancy pay is generally not payable if:
- the employee has less than 12 months of continuous service;
- the employee was employed for a specified period of time, a specific task or for a specific season;
- the employee was terminated for serious or wilful conduct;
- the employee is casual;
- the employment is subject to a training arrangement for a specified period of time or limited to the duration of the training arrangement;
- the employee is an apprentice;
- the relevant modern award or enterprise agreement provides for an industry-specific redundancy scheme; or
- the employee’s award provides for other situation in which redundancy is not payable.
If your employment has been terminated due to a redundancy, or you are am employer who is looking at making one or more staff members redundant, then we can provide you with advice to assist you in the process, including advice about the length of notice and amount of severance pay required.
If you have been dismissed and you believe it was not a redundancy, you may be eligible to lodge a claim for . If you believe that you have been unfairly dismissed, you must act immediately to be eligible to enforce your rights.
Employment Restraints and Confidentiality Agreements
Many contracts of employment will impose obligations on an employee preventing that person from being employed by a competitor company long after the employment relationship has ceased.
To be enforceable, the restraint must protect a “legitimate interest” of the employer and the extent of the restriction must be no wider than is strictly necessary to protect it. In other words, it must be reasonable. If the restraint meets this test, it will be upheld, irrespective of the adverse consequences for the employee. The “reasonableness” will be assessed in terms of the activities which the employee is being required to refrain from, the geographical reach and the timeline.
In an employment agreement situation a broad contractual restraint of trade restriction against all types of future competition by the former employee may be unenforceable. A court may strike the restriction out and freeing the employee to compete as an interest that is not protectable. The requirements for a restraint to be held reasonable include:
- Genuine interest – first, to restrain another person, you must have a genuine and legitimate interest that needs protecting and secondly, the restraint should be limited to protecting that interest;
- Time period – the restraint should not be for a time period that is longer than necessary to protect that interest;
- Geographic area – the restraint should not cover a geographical area that is larger than necessary to protect that interest;
- For employees – take particular care to ensure that the restraint is not so broad as to prevent the employee form working in their usual industry or at all; and
- Cascading clauses – with alternative time periods and geographic areas may help if courts may limit t the scope of the restraint.
It is critical to identify precisely what interests need to be protected and in what area and for what time and then limit the restriction to that. Be wary of any so-called ’standard’ clauses. If they do not suit the specific circumstances, they may be void and unable to be enforced. There is little point having an agreement in place if you cannot enforce it when necessary.
The legal onus of proof is on the party seeking to enforce the restraint to prove that the restraint is reasonable. The onus is on the party challenging the restraint to prove that it is against the public interest.
When negotiating a contract of employment, as an employee, your initial response to the restraint of trade covenant should be to have it deleted. If this is not possible, you should attempt to narrow the activities, geographical area and timeline to which it applies. The views of the employer will of course be the opposite.
We regularly assist employees and employers in negotiating and enforcing restraints of trade.
Occupational Health and Safety
Every workplace has a legal obligation to provide:
- a safe premises;
- safe machinery and materials;
- safe systems of work;
- information, instruction, training and supervision; and
- a suitable working environment and facilities.
Workplace safety is a necessary and essential component of your business. If you business fails to comply with Occupational Health and Safety (OH & S) legislation then its officers could be prosecuted and fined,
In addition to the legislation, some industries have the potential to cause so much injury or disease that specific regulations or codes of practice are put in place.
Regulations are legally enforceable, however the Codes of Practice provide advice on how to meet the regulatory requirements. Codes are not legally enforceable, but they can be used in courts as evidence that legal requirements have or have not been met.
Managing Industrial Disputes and Negotiations with Unions
Industrial and employment based disputes can occur for a number of reasons. Our commercial lawyers are experienced in Dispute Resolution and can provide you with assistance in the resolution of any industrial or employment based conflict.
Understanding your legal rights, entitlements and obligations in this area can often be difficult. We have experience in providing clear easy to understand advice, so that you are aware of all relevant factors that may influence the resolution of your dispute.
Where workers are represented by a union, negotiation with that union may be required when there is some type of industrial dispute, or alternatively where the workplace is considering putting in place an enterprise agreement.
Both the state and federal government have in place anti-discrimination laws which are aimed to protect people from discrimination and harassment.
These laws are aimed at preventing discrimination due to a number of factors which include (but are not limited to) age, disability, race, colour, sex, religion and marital status.
Whilst state and federal laws generally cover the same grounds and areas of discrimination, there are some ‘gaps’ in the protection that is offered between different states and territories and at a Commonwealth level. In addition, there are circumstances where only the Commonwealth law would apply or where only the state law would apply.
Under federal anti-discrimination law an employer, regardless of their size, may be legally responsible for discrimination and harassment which occurs in the workplace or in connection with a person’s employment unless it can be shown that ‘all reasonable steps’ have been taken to reduce this liability. This legal responsibility is called ‘vicarious liability’.
‘All reasonable steps’ is not defined in the legislation because what is reasonable for a large corporation may not be reasonable for a small business. Rather it is worked out on a case-by-case basis. However, it does mean that employers must actively implement precautionary measures to minimise the risk of discrimination and harassment occurring. An employer may be held vicariously liable for the actions of employees if they have not taken all reasonable steps to prevent the discrimination and harassment from occurring both within the usual work environment and at employer events, such as sponsored seminars, conferences, work functions, Christmas parties, business or field trips.
An employer may be vicariously liable for the conduct of:
- individual employees or groups of employees;
- directors, supervisors or managers;
- workplace participants (where two people work on the same premises, but have different employers);
- agents (eg. insurance salespersons operating on a company’s behalf );
- contract workers or people being paid commission;
- a partner of a company harassing another partner;
- members of organisations which grant occupational qualifications;
- a person employed by a trade union harassing a member; and
- a person operating an employment agency who harasses someone who uses the agency.
We can provide advice to individuals who feel as though they have been subjected to discrimination, as well as businesses and corporate entities who are presented with a claim, or looking at putting in place policies and procedures to prevent discrimination in the workplace.
We are also experienced in conducting workplace seminars and training on these important issues.
Equal Employment Opportunity
Equal Employment Opportunity (EEO) is about ensuring that all employees have equal access to the opportunities that are available at work by:
- making sure that workplaces are free from all forms of unlawful discrimination and harassment, and
- providing programs to assist members of EEO groups to overcome past or present disadvantage.
EEO strategies could include workplace rules, policies, practices and behaviours e.g. recruitment programs and access to training and career development.
EEO groups are people affected by past or continuing disadvantage or discrimination in employment. As a result they may be more likely to be unemployed or working in lower paid jobs. These groups include:
- Aboriginal people and Torres Strait Islanders;
- members of racial, ethnic, and ethno-religious minority groups; and
- people with a disability.
Although agencies will only be required to report on the groups listed above, all agencies are encouraged to consider EEO as part of broader equity and diversity frameworks. The Anti-Discrimination Act 1977 provides for the fair treatment of all groups within the community, and includes provisions for age and carers responsibilities.
Equal Employment Opportunity is an outcome, not just a process, and to be effective requires the participation of both staff and management to ensure that:
- fair practices are put in place;
- management decisions being made without bias;
- recognition and respect is given for the social and cultural backgrounds of all staff and customers;
- employment practices produce staff satisfaction, commitment to the job and the delivery of quality services to customers;
- the best person is recruited and/or promoted;
- skilled staff are retained; and
- the workplace is efficient and free of harassment and discrimination.
To be effective, EEO requires the active participation of both staff and management. All staff have the responsibility:
- to work to their full capacity;
- to recognise the skills and talents of other staff members;
- to respect cultural and social diversity among colleagues and customers;
- to refuse to co-operate in, or condone any behaviour that may harass a colleague.
As an EEO supervisor/manager, you have the additional responsibility of ensuring that:
- the work environment is free from all forms of harassment;
- staff are provided with information that will assist them to carry out their duties;
- all staff members have an equal opportunity to:
- increase skills to meet work demands;
- attend training courses;
- act in higher duties;
- participate in job rotation schemes; and
- apply for all available jobs.
We can assist you with your compliance in this area of law and document your workplace policies and procedures. We are also available to conduct seminars to management and/or staff on the importance of EEO in the workplace.
Harassment and Bullying
Harassment is unwelcome conduct that humiliates, offends or intimidates people. Such conduct is neither appropriate nor relevant to work and includes words as well as acts, refraining from acting, posting images also can be in the form of workplace attitudes and atmosphere. The effect is to make a person feel insulted, offended, intimidated and unable to work effectively or perhaps safely.
Bullying is a form of workplace such as unfair and excessive criticism, publicly insults, ignoring victim’s views, constantly changing rules, repeatedly setting unrealistic work targets and culturally insensitivity
Employers may be liable for the actions of employees if reasonable actions to prevent bullying or harassment or respond to any complaint are not in place such as acting quickly on bullying or harassment complaints and implementing policies and procedures and training programs for staff.
The most effective way to prevent bullying and harassment is for you tell all employees that workplace bullying is unacceptable and will not be tolerated. This is usually done with workplace policies and manuals.
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