A worker’s rights and duties depend on whether the individual is an employee or an independent contractor. Awards and workplace agreements – and Statutory rules made by parliament or by bodies the parliament delegates power to, for example a local council or a registration authority. See delegated legislation; statute. concerned with working relationships and conditions – mostly apply to employees, rather than to independent contractors.
An ‘employee’ is a worker who works for another person in exchange for wages. The An agreement that the law will enforce. under which an employee performs work is called a ‘contract of service’.
There are other arrangements for the performance of work that look like employment contracts, but are actually independent contracting arrangements, or contracts for the provision of services.
In general, independent contractors are not covered by Found in a statute of delegated legislation. For example, a statutory authority or body is aperson or organisation that has special powers given by parliament to do work for the public benefit. minimum standards, awards or enterprise agreements made under the FW A written law made by parliament. Also called an ‘Act of parliament’, ‘statute’ or legislation. (see ‘National Employment Standards’, ‘Awards’ and ‘Enterprise agreements’, below).
The contract under which an independent contractor performs work is called a ‘contract for services’. Independent contracting arrangements are widely used in a range of industries, including the transport and building industries.
Employee or independent contractor?
The courts have developed tests to distinguish between employees and independent contractors. The touchstone is the nature and degree of detailed control that the employer exercises over an individual’s work. Other factors are also considered, including whether:
- the employer supplies the employee’s tools and equipment;
- the employer deducts PAYG tax instalments from the worker’s earnings;
- the employee is able to work for other employers;
- the employee can delegate work to an employee or sub-contractor; and
- the employee carries a financial risk;
- the employee has an opportunity to participate in the profits of the employer’s business.
In the case of Hollis v Vabu Pty Ltd  HCA 44, the High An independent body that hears legal claims brought by parties and decides between them. Serious cases are heard by a judge and jury, or just a judge. Less-serious cases are heard by a magistrate. decided that the relationship between a courier company (Vabu) and its couriers was that of employer and employee. The court considered relevant the facts that the couriers were not providing skilled labour, had little control over the manner of performing their work whereas Vabu had considerable scope to exercise control, wore Vabu uniforms, and were provided with pay summaries.
Contents of a common law contract of employment
Overview of contract terms
Each (1) The system of law developed by the English courts through precedent and adopted in ‘common law countries’ in the British Commonwealth (as opposed to Roman law (civil law) or ecclesiastical law). (2) The case law made by judges in that system. (3) Case law that is not part of the law of equity. (4) Historically, the rules of law common to all people in England, as distinct from local or customary laws. contract of employment contains terms and conditions by which the parties regulate their relationship. Such terms may be oral or written, or a combination of the two. Often, letters of appointment, job descriptions, policy manuals, awards, collective agreements, workplace practices and legislation are sources of further terms of a contract.
Under the FW Act, the terms of an employment contract cannot displace an entitlement under the National Employment Standards (see ‘National Employment Standards’, below), but they can The first step in agreeing to make a legally binding agreement. An offer must be accepted before there can be a legally enforceable contract. For example, a person can offer to sell their car for $5000 and a buyer can accept the offer and pay that purchase price. more generous terms.
Implied contract terms
The common law implies certain terms into every contract of employment. These terms impose obligations on employees and employers. Further obligations in the relationship between employee and employer arise in A civil wrong that causes harm, intentionally or otherwise. A person affected by a tort can take action in court to claim compensation for damage caused by the wrong, or an injunction to stop the wrong continuing., (1) Fairness and justice. (2) A right to property that the court will recognise even though it does not amount to full legal ownership. (3) A set of legal rules that aims to reduce any harshness that would result from strict application of the law. and from fiduciary duties.
An example of a common law implied contractual term is the common law duty of fidelity and The principle that private information told to a person must not be revealed to others. Some professionals must keep information confidential, for example doctor–patient and lawyer–client relationships., which prevents employees from using or disclosing their employer’s trade secrets.
Also implied into every contract of employment is a general duty to obey the employer’s lawful and reasonable directions. Further, all employees are obliged to exercise reasonable care and skill in the performance of their duties.
Contracts of employment that do not include an express The end of something. Contracts terminate when the parties have done what they agreed. A contract can also be terminated without being completed, for example if one party breaks the contract, or it is impossible to carry out. provision contain an implied term that the employer A document that sets out what a person wants to happen to their money and other property after they die. give the employee ‘reasonable notice’ before terminating employment, unless the employer has summarily dismissed the employee. ‘Summary dismissal’ is dismissal without notice. An employer only has a legal right to summarily dismiss an employee without notice for serious misconduct or other conduct that justifies immediate dismissal.
Breach of an employment contract
Like any contract, either A person or organisation directly involved in a court case. Parties include the plaintiff or applicant, the defendant, and any third party added to the action, but not independent witnesses. may To take legal action in a civil case. for A court order for money to be paid to someone to compensate them for a loss suffered as a result of a civil wrong or breach of contract. For example, a person who caused a serious permanent injury to another person can be ordered by the court to pay damages that compensate the injured person for their loss of income from being unable to work. See also aggravated damages; compensatory damages; general damages; liquidated damages; nominal damages; special damages. if an employment contract is breached. For example, engaging in a strike may constitute a breach of an employment contract by an employee; or when an employee is not given the requisite period of notice specified under their contract, the employee may seek damages for breach of contract Failing to do what was agreed in a contract..
These common law rights have to some extent been superseded by statutory rights to sue for reinstatement, breach of statutory agreements, compensation and underpayment of wages.