Rules Of Employment

There’s been some confusion since WorkChoices about employers’ rights and responsibilities when setting up contracts for their workers - At the minimum, employment contracts should at least meet legal requirements and be clear to both parties - Mark Dunphy and Alison Baker examine the crucial clauses and explain what a court may deem to be ‘reasonable’ in the event of a dispute.

The employment contract is used as the mechanism to determine the relationship between the employer and the employee. As such, it is essential that it clarifies the rights and obligations of both parties.

Generally, this can be achieved if the employment contract expressly states the rights and obligations of the employer and the employee during the employment relationship, on the termination of the employment relationship, and after the employment relationship has ceased.

When deciding what rights and obligations to include in an employment contract, the minimum terms and conditions of employment that arise under statute and those that are implied at common law should be considered together with any applicable award.

Under Statute

Since the 2006 introduction of the Federal Government’s WorkChoices laws, all employees within Victoria and the territories and all other Australian employees employed by constitutional corporations have derived their minimum terms and conditions of employment from the Workplace Relations Act 1996 (the WR Act). This article focuses on the employment of employees under the federal system.

The WorkChoices amendments to the WR Act introduced the Australian Fair Pay and Conditions Standard. The standard is made up of five minimum terms and conditions:

1. A guaranteed right to payment at the applicable minimum rate of pay for each hour worked.

2. Maximum ordinary hours per week of 38 ordinary hours plus reasonable additional hours.

3. A guaranteed four weeks’ annual leave per year.

4. Personal/carer’s leave made up of 10 days’ paid personal/carer’s leave per year; two days’ unpaid carer’s leave per occasion required where paid carer’s leave entitlements are exhausted; and two days’ paid compassionate leave per occasion required.

5. Up to 12 months unpaid parental leave.

In addition to the standard, there are other minimum terms and conditions of employment that must be provided to employees, including minimum notice requirements for the termination of an employment contract based on years of service, and unpaid meal breaks, and a qualified entitlement to public holidays.

Minimum terms and conditions of employment can also be found in other pieces of legislation. At the federal level, employers are required under statute to make minimum superannuation contributions, currently 9 percent of an employee’s salary. At the state level, employers derive entitlements to a number of matters not covered by the WR Act, including workers’ compensation, occupational health and safety, and long service leave.