#13075 - Forming A Contract Of Employment - Employment Law

Topic 2: Forming a Contract of Employment

• Types of employment contracts

  • Casual vs continuing

    • Casual:

      • Casual under industrial standards: Casual is anyone who is specifically engaged and paid as a casual. So long as they are ‘labelled’ as a casual from the outset Telem Civil (Qld) v CFMEU 2013

      • Casual work: informal, irregular and uncertain, and not likely to continue for any length of time Reed v Blue Line Cruises 1996

        • This definition does not apply to the NES and EA’s

      • Long-term casual s 12 FWA:

        • A national system employee who is a casual employee and has been employed on a regular and systematic basis for at least 12 months.

    • Continuing

      • What is continuing? It can include workers who may be hired under a contract that can be terminated on short notice, or employees who have fixed-term contracts. It is nevertheless a convenient label for non-casual hiring.

      • You can distinguish a casual from a part-timers as casuals have loading and part-timers have benefits.

  • Fixed term vs continuing

    • Fixed term: contract comes to an end at a fixed point in time. The contract will automatically expire without the need for termination.

      • Incudes: when the employee must retire at a certain age Bolotin v University of Melbourne 1996

      • A contingent term contract Carr v Blade Repairs 2010

      • If the agreed term is long, if there is no express termination clause provided, any attempt to terminate will bea breach of contract.

      • If the employer allows the employee to work past that date, they will be taken to have agreed to the employment becoming continuing and may need to give ‘reasonable notice’ to terminate.

        • ‘Reasonable notice’ will be implied even if the parties have expressly dealt with the issue of termination NSW Cancer Council v Sarfaty (1992)

  • Part time vs full time

    • Part time: when an employee is engaged to work less than 38 hours per week, or whatever the ‘standard’ is for that industry. The ABS treats anyone working for less than 35 hours per week as part time.

  • Trainees

    • Trainees are regulated by the Education and Training Reform Act 2006

    • Apprentices are considered to be employees Rowe v Capital Territory Health Commision

    • What about unpaid ‘work experience’ or performing training before starting?

      • If a job applicant agrees to complete certain training as a condition of being employed, they may not be an employee at this stage.

      • But if they enter into an employment contract and start performing actual work, albeit under supervisions, the employer cannot simply designate it was unpaid ‘training’ and refuse to pay them Workplace Ombudsman v Golden Maple (2009)

  • Outworkers

    • Outworkers are those who perform work away from a defined workplace e.g. homeworkers

    • There is no reason why they cannot be regarded as employees. They are not considered contractors.

    • In 2012 the FWA was amended to add a deeming provision of its own for a TCF outworkers (a person who performs work in the textile, clothing and footwear industry at home). They re deemed to be employed by the person or body that has engaged them (s 789BA – 789BB).

  • Public sector employees

    • Those employees in Federal, State and Territory public services.

    • It is now recognised that even public servants must be regarded as having an employment contract. In legal terms their contract is with the Commonwealth, State or Territory, not with the particular department in which they work.

    • However, there are some exceptions e.g. magistrates and other judicial officers are engaged under a statutory framework that would appear to negate any suggestion of an employment contract.

    • Federal and Victorian police officers can be ‘national system employees’ for the purpose of the FWA s 30E(1)

• Formation requires:

  • Intention to create legal relations

    • An agreement to do something is only regarded as a contract if the parties intend the agreement to be legally binding.

    • Test: Whether this intention exists is determined by reference to an objective assessment of what the parties have said and done, rather than what each person may subjectively have had in mind

    • Volunteers

      • Many arrangements for voluntary work will not be regarded as contractual in nature which means that they can’t be regarded as employees at common law. Nevertheless it is still regulated in a few ways:

        • Some volunteers such as unpaid firefighters or ambulance workers may be ‘deemed’ to be employees for the purposes of workers compensation legislation.

        • Organisations may be required to take reasonable care not to injure volunteers, both under common law and by virtue of work health and safety legislation.

        • Volunteers may likewise owe some sort of duty of care to the organisation but this is subject to state legislation that limits their liability

        • Some state and territory anti-discrimination legislation applies.

    • Workers in religious organisations

      • Do not start with the presumption that just because there is a religious or family connection that there can be no intention to create legal relations Ermogenous v Greek Orthodox Community of SA 2002

      • However, if they are doing it for altruistic purposes, not for ‘private gain and material advantage’, might not have intention Teen Ranch v Brown

      • Moral vs legal obligation Teen Ranch

      • Even if the volunteer received a stipend, might not be employee if they were providing services ‘as volunteers in response to a calling to serve God’ Redeemer Baptist School v Glossop (2006).

        • By comparison, when a person agrees to perform work in return for payment, it can generally be assumed that intention will be present unless it is lacking.

    • Family arrangements

      • Do not start with the presumption that just because there is a religious or family connection that there can be no intention to create legal relations Ermogenous

      • However unpaid assistance would generally not qualify as contractual.

      • Factors which point away from being an employee: Suncorp v Metway

        • No payment of tax

        • Money paid is not consistent and not based on hours worked

        • Flexibility

        • Continuance when there is no payment

    • Trial periods and work experience

      • If the employer has agreed to pay, but the employee has no legal obligation to do the work, it won’t be a contract of employment Dietrich v Dare 1980

      • If it’s not a traineeship, it’s either a voluntary relationship or it’s a relationship of employment and they should be paid.

      • But there have been circumstances where employment contracts have been found to exist, especially in relation to longer duration arrangements Nominal Insurer v Cleanthous 1987

      • If the objective reality or ‘true substance’ of a relationship is one of employment, it does not matter that it may be described in other terms, or indeed that the worker concerned may be acquiring additional skills or experience FWO v Devine Marine Group 2014; FWO v Crocmedia 2015

        • However, one exception: under s 13,...