Are you engaging a new employee or independent contractor?

Are you engaging a new employee or independent contractor? Or maybe you are an employee or contractor taking on a new role? This could be a very exciting moment for you! However, there should be careful consideration when entering into a new contract as there can be severe consequences if you use the wrong one. Talk to us today and our experts will advise you on the appropriate contract and how to tailor it to your needs.

In summary, when negotiating a new employment contract or contractor agreement, be aware that:

  • There are different types of contracts to consider
  • Each contract entails different rights and obligations
  • Choosing the wrong type of contract can be detrimental to you and could cost you in the long run

What goes into selecting the appropriate contract?

There are many different types of contracts to consider when deciding on which is right for your circumstances (such as employment on permanent or casual basis or engagement of an independent contractor).

In general, employment contracts and contractor agreements can be made in writing or orally. There is no statutory requirement to provide employees or contractors with terms of their engagement in writing. However, always remember to check the relevant industrial instruments (enterprise agreements or modern awards). These instruments may set specific requirements in this regard and provide for additional terms of employment.

Written contracts often include only the essential elements of the relationship, such as:

However, be aware there are several terms implied into the contract by operation of law. For example, if the contract does not include a provision on how it can be terminated, a reasonable notice applies.

What should you be looking for in a contract as an employee or independent contractor?

As an employee or contractor, you should be aware of your entitlements, rights and obligations. These may come under not only the contract, but also under the Fair Work Act, an enterprise agreement or modern award (as the case may be), and applicable case law.

For example, each type of employment contract is governed by different rules in relation to its termination, annual and other leave entitlements, protection of employee rights (general protection) and unfair dismissal. We can assist you to understand all the aspects of your work relationship and ensure that your rights and interests are protected.

As an employer, why does it matter what type of contract you choose to use?

If you were to choose an inappropriate contract for the position you offer, severe consequences may follow. For example, if the employee is hired on a casual basis but the work performed is regular, predictable and continuous, the employee may (in very specific circumstances) be able to claim benefits belonging to permanent employees, such as leave entitlements, as far back as 6 years. For more details please read our article ‘High Court decision on Casual Employment’.

Similar consequences may arise in the case of independent contractors. If the worker is engaged on an exclusive basis, with no right to delegate work, and is required to follow the employer’s policies and directions, the worker may claim to be a permanent employee with all their entitlements. Be aware that the current definition of an independent contractor may change later this year due to an expected High Court’s decision.

How can we help you?

If you are concerned about your current contract or new employment opportunity, talk to us today. We will assist you with drafting and reviewing the contractual terms as well as inform you of your rights and obligations. Our team has the knowledge and experience to provide you with expert legal support to ensure your rights and interests are protected.

We offer an initial consultation and contract review for a flat rate fee. Contact us for more information.

e: info@elringtons.com.au | p: +61 2 6206 1300