Issues regarding employment contracts can arise at any stage of the employment relationship. You may be seeking legal advice about whether a contract you have been offered by a prospective employer is “fair”. Alternatively, if your employer is proposing to “update” your current contract with a new one, you may want to know how this will affect your rights and obligations. Or you may be in dispute with your employer about the interpretation of a particular clause, and you want legal assistance to help resolve the stalemate.
Regardless of what is stated in your contract, our employment contract lawyers can advise you of certain rights which are guaranteed by legislation. Your employer cannot “contract out” of the 10 National Employment Standards in the Fair Work Act 2009 (Cth), known as the “NES”, by stating something in your contract which is inconsistent with the NES. If they do, the relevant clause will be invalid to the extent of the inconsistency. The NES relate to the following matters:
- maximum weekly hours;
- requests for flexible working arrangements;
- parental leave and related entitlements;
- annual leave;
- personal/carer’s leave, compassionate leave and unpaid family and domestic violence leave;
- community service leave;
- long service leave;
- public holidays;
- notice of termination and redundancy pay;
- Fair Work Information Statement.
Similarly, if you are covered by a modern award or enterprise agreement, then any individual contract between you and your employer will be read subject to the terms of the award or agreement.
Whatever the situation, we can help you to understand, negotiate and enforce your contractual rights and obligations.
“Sham Contracting” - the use of contracting to cheat workers of benefits
At RCT, our employment lawyers often advise workers of what is called “sham contracting”. It refers to a situation where a worker has the characteristics of an employee, but is engaged by a company under the pretence that they are an independent contractor. An independent contractor operates their own business and provides services to, but is not actually employed by the company for whom they work.
Companies may attempt to classify workers as independent contractors instead of employees in order to avoid paying them employment entitlements like paid leave and superannuation, whilst also circumventing workers compensation and unfair dismissal laws. In short, an independent contractor is cheaper, and exposes the company to less legal risk, than an employee.
The courts have developed a multi-factor test to determine whether a worker is an employee or independent contractor. Importantly, the crux of this test is substance (ie the actual nature of the relationship) over form (ie how the parties describe themselves). In other words, a worker may be found to be an employee even if the parties have always stated – and perhaps genuinely believed – that the worker was an independent contractor. Relevant factors include:
- the degree of control exercised over the manner in which work is performed;
- whether the worker performs work for others;
- whether the worker has a separate place of work or advertises their services to the world at large;
- whether the worker provides and maintains significant tools or equipment;
- whether the worker can delegate or subcontract work to others;
- whether the worker is represented as an “emanation” of the business, such as by wearing a company uniform or carrying company business cards;
- whether the company deducts income tax;
- whether the worker is paid a wage or salary, or by reference to the completion of tasks;
- whether the worker is provided with paid holidays or sick leave;
- whether the worker spends a significant portion of their pay on business expenses.
If you believe that you have been incorrectly classified as an independent contractor, our employment lawyers can:
- provide you with advice about your situation;
- write to your employer to clarify your employment arrangements; and
- help you make a claim for any entitlements that you may be owed.