Start your employment relationship the right way by understanding your commitments to staff.
Are you onboarding new employees into your business, but don’t know where to start? Chances are you’re not alone. The rules relating to bringing on employees is an area that changes regularly. With over 800,000 businesses in Australia that employ staff, there are a lot of misconceptions about what the rules and responsibilities are for employers.
Understand your obligations
The rules that regulate your staff are set out in a number of different places. You need to have an understanding of how they work together in order to fully comprehend these obligations. All employees are guaranteed a number of minimum standards for their employment. There are two sources for these standards; the National Employment Standards and the range of over 120 awards that might apply to your employees. To make matters more complex, different awards may apply to different employees within your business. If unsure, consult an employment lawyer or consultant to figure out what the right standards are for your employees.
Other matters to consider are:
- Whether you need to apply for or update your WorkCover insurance.
- What are your obligations to pay super and tax on behalf of the employee?
- Do they have any special needs that need to be accommodated in the business?
National Employment Standards (NES)
The NES covers 10 areas that you must cover for each of your employees, these include entitlements relating to:
- minimum standards for leave (there are 5 types of leave – annual leave, personal and carer’s leave, long service leave, parental leave and volunteer leave)
- how public holidays are dealt with
- maximum hours of work
- obligation to consider flexible working arrangements
- minimum notice periods if employment is terminated
- the provision of an information sheet to each employee setting out these rights.
These standards, as well as the obligations in a relevant award, are considered to be the bare bones. If you opt to provide better conditions, that is your choice.
Classification of Employees
Employers are under different legal obligations to their employees depending on their classification. These include:
- full time employees
- part time employees
- casual employees
- fixed term employees
- daily or weekly employees
Full time employees have an expectation of work on a regular basis, as well as entitlements to the full amount of leave set out in the NES. In contrast, part time employees are only entitled to a pro-rated expectation of work and amounts of leave. Casual, fixed term and daily or weekly employees are usually not entitled to any leave and have no guarantee of work but are paid a higher hourly rate as compensation. The same applies to contractors, but the added compensation includes all of their tax and super.
Getting contracts right
Good contracts make great relationships and this is very true for employment agreements. You need to document the agreement with your employees to make sure that both your and their rights and obligations are understood. As a rule of thumb, make sure to avoid generic contract templates.
Jeremy Streten is a lawyer and the author of the Amazon best seller “The Business Legal Lifecycle”, a guidebook designed to help business from a legal perspective.