Pay and Conditions

High Court Confirms the Primacy of Written Contracts in Independent Contracting

The thorny issue of whether an individual is an employee or contractor is of great significance and getting the classification wrong can mean the imposition of significant monetary penalties and liability for outstanding wages, taxes and other benefits. However, knowing with some certainty whether a person is an independent contractor or not is not clear-cut. In fact, this issue has occupied much of the Court’s time over the years and been the subject of considerable judicial consideration.

The High Court of Australia appears to have jettisoned previous views, and have recently handed down two significant decisions that revise the approach to be taken by courts when determining whether a person is an employee or independent contractor.

The High Court Has the Final Say as to when a Casual is a Really a Casual

In a significant win for employers, the High Court has handed down its decision overturning the Full Federal Court decision in WorkPac Pty Ltd v Rossato [2020] FCAFC 84 which permitted casual employees to receive the 25% casual loading and nonetheless claim paid service entitlements only applicable to permanent staff, where certain conditions applied.

The High Court decision now squarely aligns with the newly introduced casuals provisions in the Fair Work Act 2009 (Cth) which took effect on 27 March 2021. These legislative amendments affirmed that if agreed under terms of an employment contract, a casual employment relationship that mutually acknowledges no firm commitment to an ongoing working relationship or a regular pattern of work between employer and employee, will be sufficient to curtail any subsequent claims for service related entitlements enjoyed by permanent staff provided the parties observe the terms of the casual contract.

Employment Law Changes from 1 July 2021

The beginning of the financial year marks a number of important changes to the employment law area. These changes, relate to minimum wages, the unfair dismissal threshold, the Fair Work Information Statement and changes to the Superannuation Guarantee rate. A summary of the changes to come and what this means for your business is covered in this alert.

“Ordinary and Customary Turnover of Labour” What Does This Really Mean?

Many labour hire and contract for service employers (such as commercial cleaning, security and maintenance companies) exist as a result of contracts they have with clients for their services, for which they engage staff. When these contracts come to an end, there is no need to retain the staff and as such their positions are redundant. It has been widely accepted that if this is the manner in which these businesses did business, and it was an ordinary and customary part of the business model, then the employer would not be liable to pay the employees redundancy pay as a result of the terminations due to loss of contracts. This idea has been enshrined in the Fair Work Act 2009 (Cth) which provides that redundancy pay is not required if the termination of employment is a result of the “ordinary and customary turnover of labour”. However, there has been much uncertainty as to when this actually applies and what these words mean. There has also been significant recent judicial scrutiny of the issue.

The Impact of the UK Uber Decision on the Australian Gig Economy

When the High Court decided in 2001 that an injured courier was, in fact, an employee rather than an independent contractor, the decision had a significant impact on the relationship between workers and business. This shift is occurring again in relation to the Gig Economy. In Hollis v Vabu Pty Ltd (2001) 207 CLR 21, the Court determined that what had once been assumed as an independent contractor, being a courier delivery rider, was determined to be an employee. The Court found that factors such as level of skill, control and work hours, presentation to the public, and tools of trade were all relevant to whether the legal relationship was one of contractor or employee. The Court in effect, developed the multi-factorial test to determine this issue, which has been applied consistently since to determine whether a worker is an employee or independent contractor. Later decisions have added other qualities, such as an ability to subcontract work, in determining the nature of an engagement.

Are Your Casual Employees Actually Casual: Examining A New Federal Court Decision and What It Means For Australia’s Casual Workforce?

Many employers engage casual employees who are often longstanding members of their workforce and/or work a regular pattern of hours. However, are these employees really engaged on a casual basis? This has been a vexed issue for some time and for legal questions such as access to the unfair dismissal jurisdiction and long service leave entitlements it has been recognised that casual employees who work regular and systematic hours, are to be treated in the same way as permanent employees. However, it has always been accepted that if casuals are paid a casual loading, they are not entitled to paid leave.

Changes to Modern Awards That Will Affect Most Australian Employers: The Time to Act is Now!

On 4 July 2019, the Fair Work Commission (“Commission”) finalised its decision in relation to the incorporation of new ‘annualised wage arrangement’ clauses, which will replace the existing annualised salary clauses in the modern awards already containing an annualised salary clause. The new terms will also be inserted into three modern awards (Pastoral Industry Award 2010, Horticulture Award 2010 and Health Professionals and Support Services Award 2010) which have not previously had an annualised salary clause.

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