Types of Employment
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Across all industries and workplaces, over two-million workers in unions across Australia continue to negotiate higher pay to ensure all members get a fair wage for a fair day’s work. Join your union today and make it happen.How you are employed affects what your entitlements are at work, what responsibilities you have and even how much you can expect to be paid. The most common types of employment are listed below.
Full-time
Full-time employees have a permanent position. Full-time employment usually means working around 38 hours per week, although this can vary depending on the award or agreement that covers your workplace, or the terms of your employment contract.
As a full-time employee, you are entitled to all of the minimum conditions laid out in the National Employment Standards as well as the entitlements included in the award or agreement that covers your workplace.
Part-time
Part-time employment usually means working less than 38 hours per week. Like working full-time, working part-time means that you have a permanent position.
You are entitled to all of the minimum conditions laid out in the National Employment Standards as well as the entitlements included in the award or enterprise agreement that covers your workplace.
You are entitled to the same amount of leave as a full-time employee, relative to the number of days you work. For example, if you work two days a week, and a full-time worker would be given four weeks off, this means that your entitlement to four weeks’ leave would equate to eight days off.
Fixed-term contract
An employee can be on a fixed term contract: an employment contract that ends after a defined period of time, or upon the completion of a defined task. An employer cannot place an employee on a fixed term contract, or a series of them, for more than two years in total (some exemptions apply).
Casual
As a casual employee, future work shifts are subject to agreement between yourself and your employer. Casuals typically get paid a 25% loading on top of the base rate of pay to compensate them for not getting paid leave entitlements and job security.
Shift work
Shift workers work in roles that need to be done outside of what are considered ordinary business hours and sometimes for longer periods of time than other types of employment. This means that shifts often fall at inconvenient times. The award or agreement that covers your workplace will define exactly what counts as shift work in your workplace.
Shift workers are usually permanent employees. If you are a permanent shift worker, you are entitled to all of the minimum standards laid out in the National Employment Standards, plus those in the award or agreement that covers your workplace.
Shift workers are also entitled to an extra week of annual leave under the National Employment Standards.
Labour hire
Labour hire is a form of employment in which a company (“host”) hires a worker from a labour hire agency (“provider”) to perform duties.
Gig workers (Also known as ‘regulated’ or ’employee-like’ workers)
A regulated worker is someone engaged by a digital labour platform who, while not classed as an employee, is considered ‘employee-like’, and so will benefit from minimum standards. Road transport contractors also fall under this category.
For the first time, from 26 August 2024, the Fair Work Commission has the power to make minimum standards for these workers through (voluntary) minimum standards guidelines or (binding) minimum standards orders. ie. the Fair Work Commission will be able to set terms and conditions of these workers who are not “employees”.
This change is thanks to the union-won Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 and will see better protections for workers are currently excluded from the rights that most workers are entitled to.
Regulated workers must satisfy at least two of the following conditions to be considered ‘employee-like’:
- Low bargaining power
- Receives remuneration at or below an employee performing comparable work
- A low degree of authority over their work, or
- Other characteristics as prescribed by regulation
The new laws will also give regulated workers the right to make collective agreements with the firm that engages them, and delegates will be able to represent regulated workers just as they do other kinds of workers.
Regulated workers will also be able to challenge an ‘unfair deactivation’ or ‘unfair termination’ from a digital labour platform where the primary remedy will be ‘reactivation’.
Independent contractor
Independent contractors are usually not considered to be employees and are not covered by normal employment law.
However, if you are an independent contractor, the organisation that engages with you still has a legal responsibility to provide you with a safe working environment and one that is free from discrimination. As an independent contractor, you are also covered by laws that protect you against unfair contracting arrangements.
The following union-won changes come into operation from 26 August 2024, as part of the Closing Loopholes (No.2) Act – these are a huge win for workers. They include:
- A commonsense definition of employee
A definition of ‘employee’ and ‘employer’ will now be determined by ascertaining the ‘real substance, practical reality and true nature of the relationship between the individual and the person’, instead of the current approach of examining the terms of the contract.
- Unfair contracts
Contractors will now be able to go directly to the Fair Work Commission, rather than the courts, to challenge unfair contracts. Existing access to court processes will remain under the Independent Contractors Act.
Not sure if you’re an independent contractor?
Just because your boss made you get an ABN, doesn’t mean that you are necessarily a genuine independent contractor. Here are some key factors that suggest you may be an employee and not an independent contractor:
- You do not have control over the way you work – genuine independent contractors can choose how they get a job done, including by hiring other people to sub-contract work to
- You are integrated into your employer’s organisation – genuine independent contractors remain independent, meaning you should not have a boss to report to
- You are required to wear a uniform, or display material that associates you with your employer’s business – genuine independent contractors work for themselves, not the company that engages their services
- Your employer can suspend or dismiss you as they would an employee
Some employers attempt to use independent contracting to disguise what is actually an employment relationship to avoid employment laws. This illegal practice is known as sham contracting.
Sham contracting
Sham contracting is illegal, and refers to an employer deliberately misrepresenting their employees as independent contractors.
Employers use sham contracting to avoid fulfilling obligations they have to employees, such as paying minimum wages or providing entitlements like leave and superannuation, and it’s common practice in several industries, especially the gig economy.
Union members fought hard for changes to protect workers from sham contracting arrangements, winning significant improvements to the laws as part of the Closing Loopholes (No.2) Act. These stronger laws introduce a range of measures to stop employers from mislabelling employees as ‘independent contractors’ to deny workers their work rights.
The sham contracting defence changes came into effect as of 27 February 2024. These changes mean that if a case ends up in court, the onus is now on the employer to prove they had a ‘reasonable belief’ that an employee was an independent contractor. This replaces previous laws where employers could claim they ‘did not know’ or were ‘not reckless’ as a defence.
Daily and weekly hire
Certain employees can be hired on a daily and weekly basis. In these limited industries, you can be employed on either a part-time or full-time basis in this type of employment. Apprentices can only be hired on a weekly basis.
Both daily and weekly hire employees are covered by any award or agreement that covers their workplace, meaning that you get the same entitlements as the permanent employees working there. Daily hire employees also have additional entitlements:
- Giving or receiving only one day’s notice when leaving their job
- Tradespeople are paid for an extra hour at the end of their employment to collect, clean and pack away their tools
- A follow-the-job loading – a higher rate of pay that compensates for the time they spend not working between jobs
Outworkers
Outworkers are employees or contractors who work at their home or somewhere that wouldn’t be considered a normal business premises (at least in a pre-pandemic world). Outworkers are common in the textile, clothing and footwear industries.
The award or agreement that covers your workplace applies to outworkers as it does to other employees. Awards and agreements often contain specific terms for outworkers.
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