EMPLOYMENT LAW
•Deals with the relationship and legal rights and obligations between
employers and employees.
•The legal rights and obligations come from 4 main sources:
1. Federal Legislation
2. State Legislation
3. Awards, Workplace Agreements and Enterprise Agreements
4. Common Law
•Employees can work in a business organisation that is either in the public
or private sector.
• Private sector:- business is owned and operated privatly.
• Public sector:- is a Government Department
Public Service Act 1922 (Cwlth) protects employees from changes in
government by ensuring political impatiability.
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CATEGORIES OF EMPLOYEMNT
• Employee - Contracts of service
• Independent Contractor - Contracts for service
• Agent - Person who makes a contract on behalf of
another with a third party.
If an employee there are many statutory compliance required
including:
– Income tax laws
– Superannuation guarantee laws
– Workers’ compensation laws
– Payroll tax laws
– Workplace regulations taxation
– Occupational health and safety laws
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EMPLOYER-EMPLOYEE RELATIONSHIP
• Control Test - Nature
- Degree of control able to be exercised by a
person over the manner in which the work
is to be performed by another.
• Delegation Test - Discretion of service provider to
delegate work to another party.
• Business Test - Commercial factors showing whether
working on own account or for someone
else.
• Integration Test - Is work being performed on integral part
of the business operation of the person
engaging the services of the worker?
• Pragmatic Test (see next slide)
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PRAGMATIC TESTS
• Ownership of tools
• Ownership of equipment or stationery
• Method of remuneration
• Payment of superannuation, insurance or workers’ compensation
• Deduction of PAYG income tax
• Use of business name or business structure
• The ratio of money spent to money earned after deduction of expenses
• Whether invoices are required to be submitted prior to payment
• The responsibility for losses or for rectifying errors or mistakes in the
quality of work done
• The freedom to work for other people
• Whether the work is simply an identifiable job for a specified period of
time
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OUTSOURCING/CONTRACTING OUT
EMPLOYEE
Contract of
Service Payment
Labour
LABOUR HIRE
COMPANY
Payment Labour
Contract for Supply
Service
BUSINESS
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CONTRACTORS HAVE PROTECTION AGAINST
UNFAIR CONTRACTS
• Workplace Relations Act 1996 (Cwlth)
S127A, 127B and 127C:
Allows protection to contractors with respect to contracts
that are unfair, harsh or unconscionable, or against the
“public interest”.
• Trade Practices Act 1974 (Cwlth)
S51AC: Unconscionable conduct in business transactions.
S51AD: Industry codes to be mandatory.
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FORMATION OF THE EMPLOYMENT CONTRACT
Intention to create legal relations
Offer and acceptance
Consideration
Capacity of parties to enter into contract
Reality of consent
Legality of object
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TERMS OF THE EMPLOYMENT CONTRACT
Express terms (spoken/written)
• Nature of work
• Location of work
• Wages
• Remuneration
• Hours of work
• Statement of duties/position description
(employee responsibility)
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TERMS OF THE EMPLOYMENT CONTRACT
- EMPLOYER’S DUTY
Implied terms (from circumstance of offer
and acceptance):
• To provide work
• To provide remuneration
• To not destroy or seriously damage the
relationship of trust
• To ensure safety of employees
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TERMS OF THE EMPLOYMENT CONTRACT -
EMPLOYEE’S DUTY
Implied terms (from circumstance of offer and acceptance):
• To work in a skilful and competent manner, and to exercise reasonable care.
• To obey an employer’s lawful and reasonable commands (a command by the
employer that exposes an employee to an unreasonable risk of injury is not a
lawful command).
• To provide faithful service (also known as the duty of fidelity).
• To not prejudice an employer’s interests or act in a manner hostile to the
employer’s interests.
• To maintain confidentiality after termination of the contract (e.g. not to disclose
trade secrets).
• To account for moneys and property received on behalf of the employer.
• To hand over inventions made during the course of employment.
• To disclose to an employer information relevant to the business of the
employer.
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TERMS OF THE EMPLOYMENT CONTRACT
By Industrial Bodies
eg. Australian Industrial Relations Commission
Minimum mandatory standards:
• Hours of work
• Wage rates
• Classifications
• Rosters
• Overtime
• Penalty rates
• Consultation
• Training
By the Workplace Relations System
Workplace Relations Act 1996 (Cwlth)
Annual Holidays Act 1994
Long Service Leave Act 1922 (Vic)
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LAWFUL TERMINATION OF EMPLOYMENT
CONTRACT
• Termination by death
• Termination by the dissolution or bankruptcy of the employer
• Termination by sale of business by the employer
• Termination by frustration of contract
• Termination by abandonment of contract
• Termination by breach of contract
• Termination by notice
• Termination without notice
• Redundancy
• Suspension by employees
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UNLAWFUL TERMINATION OF EMPLOYMENT
• Dismissals prohibited by law
• Unfair dismissals:
Unfair dismissal is assessed as being “harsh, unjust or
unreasonable”.
Assessment based on objective analysis of all circumstances
applicable to employer and employee, using “reasonable
person test”:
- reason for dismissal
- procedural fairness
(using concept of “a fair go all round”)
• Constructive dismissals 12
REMEDIES FOR UNFAIR DISMISSALS
(VIA LEGISLATION)
Employee:
• re-employed in the same position
• re-employed in an alternative position
• paid an amount of compensation.
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REMEDIES FOR BREACH OF THE
EMPLOYMENT CONTRACT
Employer’s remedies
– Termination of employment
– Damages
– Injunctions and specific performance
– Suspension of an employee
– Orders by an industrial tribunal
– Retraining
– Disciplinary procedures
– Contract negotiation
– Private mediation
– Withdrawal of discretionary benefits
– Reallocation of duties or hours of work
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REMEDIES FOR BREACH OF THE
EMPLOYMENT CONTRACT
Employee’s remedies
• Resignation
• Damages
• Injunctions and specific performance
• Unfair dismissal proceedings
• Unlawful termination
• Claims for sums due
• Orders by an industrial tribunal
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LIABILITIES AND RIGHTS OF EMPLOYERS
AND EMPLOYEES TO THIRD PARTIES
Vicarious Liability
• Employer is liable to a third party for negligent acts or omissions of an
employee, carried out in the course of employment, where these acts or
omissions cause loss or damage to a third party.
Liability for Contracts
• Employer is liable for contracts entered into by an employee as agent of
employer.
• Employee liable for contracts if act outside of authority given by
employer.
Liability for Criminal Acts
• Criminal acts of employee conducted in course of employment in strict
liability cases without intention to commit the act results in vicarious
liability.
– Employer liable - where at direction of employer.
– Employee liable - no employer direction but intention to commit the
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acts.
STATUTORY REGULATION OF EMPLOYMENT
RELATIONSHIP
1. Worker’s compensation - (Federal and State legislation)
Provides wage and salary maintenance and prescribed benefits for injured
workers:- e.g. Pensions, Lump sums, Medical expenses
Coverage:
Work-related injuries
“Worker” as defined in legislation
Insurance obligations:
Mandatory Workers’ Compensation Insurance required by employers
with
“WorkCover”.
Employee benefits:
Weekly benefits for initial period
Medical and hospital benefits are covered.
Economic and non-economic losses
Retirement provisions
Rehabilitation and return to work obligations
Common Law Access: Dependant on relevant legislation.
Dispute Resolution: Dependant on relevant legislation. 17
2. Occupational Health and Safety
• Employer and employee duties
• Risk identification and codes of
practice
• Sanctions and enforcement
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3. Anti-discrimination And Equal Opportunity Legislation
• Human Rights and Equal Opportunity Commission Act
1986
• Affirmative Action (Equal Employment Opportunity for
Women) Act 1986
• Racial Discrimination Act 1975
• Sex Discrimination Act 1984
• Disability Discrimination Act 1992
• Workplace Relations Act 1992
• Workplace Relations Act 1996
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3. Anti-discrimination and Equal Opportunity Legislation
Cont.
Nature of discrimination
• Race
• Sex
• Marital status
• Political belief
• Religious belief
• Disability
• Physical impairment
• Intellectual impairment
• Family responsibilities
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3. Anti-discrimination and Equal Opportunity Legislation
Cont
Complaints and disputes
• Conciliation resolution at disputes
Tribunal
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3. Anti-discrimination and Equal Opportunity Legislation
Cont
Affirmative action
Affirmative Action (Equal Employment Opportunity for
Women) Act 1986 (Cwlth)
For employers with 100 or more employees:
• To ensure appropriate action to eliminate discrimination by
employers against women in relation to employment
matters.
• Measures to promote equal opportunity for women in
employment matters.
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3. Anti-discrimination and Equal Opportunity Legislation
Cont
Sexual harassment
Sex Discrimination Act 1984 (Cwlth)
One person subjects the other to an unsolicited and
unwelcome act of sexual conduct or physical intimacy in
circumstances where the other person has reasonable
grounds to feel offended, humiliated or embarrassed.
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4. Occupational superannuation
• To fund and maintain living standards for an ageing
population in the future.
• Requires employers to make superannuation
contributions on behalf of their employees at a
prescribed percentage of the employee’s wage or
salary, as defined by the legislation, to a complying
fund.
• Rate: 2006-07 9%
• Penalties for non-compliance: Non taxable deduction
Superannuation Guarantee Charge.
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