Entitlement to Work in Australia

Employment Contracts

Enterprise Agreements

An Enterprise Agreement is negotiated between employers, employees and bargaining representatives to establish a fair working wage and conditions of employment. In this comprehensive guide for employers, we explain what an enterprise agreement is, things included in an enterprise agreement, and how the EBA has evolved over the years. Please note that all the information below is general in nature and if you need further information, consult an employment relations professional. Is there a difference between Enterprise Bargaining Agreements and Enterprise Agreements? Enterprise Bargaining Agreement (EBA) was an old term prior to the Fair Work Commission (FWC) amending it to Enterprise Agreement (EA). Prior to EBAs were Collective Agreements which were in place before the Fair Work Act 2009. Changes to EBAs The Secure Jobs Better Pay Act, Closing Loopholes Act and Closing Loopholes No.2 Act changed how employers and employees bargain and make agreements. What is an enterprise agreement? An Enterprise Agreement sets out the minimum terms of employment between one or more employers and their employees or a group of their employees. The Agreement may replace any applicable modern awards to act as the base terms and conditions of employment for those employees who are covered by the EA; or it may incorporate certain terms from the relevant parent Award. An Enterprise Agreement (EA) gives employers and employees the freedom to bargain for better wages, greater flexibility and working conditions to suit their individual needs above and beyond a Modern Award or the National Employment Standards (NES). The Fair Work Act 2009 sets out strict rules and guidelines for all parties to follow to ensure the process is fair. This includes guidelines for negotiating, mandatory terms to include, and the requirements to meet the Fair Work Commission’s (FWC) approval standards. Enterprise Agreements can benefit employers because they can negotiate for more flexible working arrangements provided employees are better off overall. Likewise, employees can bargain for higher wages and extra benefits the applicable Modern Award may not offer. What are the different types of enterprise agreements? There are three main types of enterprise agreements including single-enterprise agreements, multi-enterprise agreements, and greenfields agreements. An Enterprise Agreement cannot offer overall lesser terms than the Modern Award or national minimum standard. Type of enterprise agreement Definition Single-Enterprise Agreement Made between one or more single interest employers (employers with shared interests i.e. in a common enterprise, joint venture or related corporations, or who are authorised to be single interest employers by the Fair Work Commission) and employees to be covered by the agreement. Multi-Enterprise Agreement Made between one or more employers who may not have a single interest and employees to be covered by the agreement. Greenfields Agreement  Made in relation to a new enterprise before any employees are hired. This agreement can be a single-enterprise or multi-enterprise agreement and is between employers and employee associations or other bargaining representatives (usually a union). Employee-like Collective Agreement They are made between a digital labour platform operator and an organisation that can represent employee-like workers. Road Transport Collective Agreements They are made between a road transport business and an organisation that can represent regulated road transport contractors. Single enterprise agreements Most registered employment agreements are single enterprise agreements. An employer may make single enterprise agreements with its employees. An agreement covers employees when they: Are employees at the time the agreement is made. Start work for the employer after the agreement is made. In some cases, 2 or more employers may make a single enterprise agreement. They must be related employers, which means they are one of the following: A joint venture or a common enterprise. Related body corporate entities. Employers that carry on similar business activities under the same franchise and are franchisees of the same franchisor and/or related bodies corporate of the same franchisor. Multi-enterprise agreements Two or more employers may make a multi-enterprise agreement. The agreement is only with the people who are: Employees at the time the agreement is made AND Employees who will be covered by the agreement. Employers must follow a clear process to make a multi-enterprise agreement. From 27 February 2024, an employer may transition from a supported bargaining agreement or a single interest employer agreement that has not yet passed its nominal expiry date, to a single enterprise agreement. Things to include in an enterprise agreement An Enterprise Agreement covers a range of matters from rates of pay to employment conditions and dispute resolution procedures. The Fair Work Act 2009 requires an Enterprise Agreement to contain the following terms: Coverage term that explains who the agreement covers. Flexibility term that allows an employer and an employee to agree to vary some specific terms of the agreement with employees to suit through an individual flexibility agreement. Consultation term that requires the employer to provide notice and consult with affected employees regarding any major workplace changes. Dispute resolution term that allows the FWC or another independent party to settled disputes concerning matters arising under the agreement. Nominal expiry date of the agreement no longer than four years from the agreement’s approval date. In addition to the mandatory terms, an EA can only contain ‘permitted matters’, which includes terms relating to rates of pay, penalty rates, overtime, allowances, standard hours, annual leave, personal/carer’s leave and deductions from wages. There are certain terms that cannot be included in an EA or EBA, specifically: Discriminatory terms, or terms that otherwise breach the general protections of the Act; Objectionable terms, for example a term that requires or permits breach of the general protections; Terms that are inconsistent with the unfair dismissal provisions of the Act. Terms that are inconsistent with the industrial action provisions of the Act. Terms that are inconsistent with the right of entry provisions of the Act. Terms that are below standards outlined by the NES or Modern Award. What is the difference between an enterprise agreement and a modern award? Like awards, enterprises agreements set out minimum entitlements and employment conditions for your business. An enterprise agreement is negotiated within one or more specific businesses, rather than determined by the Fair Work Commission for an entire industry or occupation. But it still needs Fair Work Commission approval before it can come into effect. Generally, when you have an EA the award doesn’t apply, though some agreements do defer to the award or incorporate award provisions. Enterprise agreements can be tailored to meet the needs of a business or group of businesses and can include provisions regarding various matters, such as rates of pay, employment conditions and dispute resolution processes. The agreement cannot include anything unlawful, for example anything discriminatory. The minimum pay in the agreement still can’t be less than the base rate of pay for the classification under the award, and the National Employment Standards (NES) enshrined in the Fair Work Act will also continue to apply. The employees also need to be “better off overall” than they would have been under the award for the Fair Work Commission to approve the agreement. Enterprise bargaining process Employers, employees and their bargaining representatives are involved in the process of bargaining for a proposed enterprise agreement in good faith. Once an employer decides to initiate the bargaining for an EA, they are required to take all reasonable steps to notify any existing employees who will be covered by the EA of their right to be represented throughout the negotiations. Once the notice of employee representational rights has been issued, negotiations can commence. There are four steps to the bargaining process: Notice of Representational Rights. Commencement of Good Faith Bargaining. Voting and Access Period to the finalised EA. Approval by the Fair Work Commission. Grow your business with Peninsula Peninsula has worked with thousands of businesses in Australia providing expert advice on employment relations and workplace health and safety. We offer access to resources, tools, documents, and software to all our clients. Contact our team to find out how we can help you. This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

Employment Contracts

An employment contract is a written agreement between an employer and the employee. It sets out enforceable terms and conditions that govern the employment relationship. Although the employment agreement does not have to be in writing, ideally it will be. An employee contract must provide for at least the same minimum terms and conditions and wages set by the National Employment Standards (NES) contained in the Fair Work Act 2009 or the relevant award, enterprise or other registered agreement. Both the employer and employee must agree to any changes to the employment contract. What to Include in An Employment Contract An employment contract is the most effective way to codify the terms and conditions of the employment relationship. It should outline fundamental aspects of the employment relationship including employment status, particularly if the employee is engaged as a part-time or casual basis, remuneration and obligations. Setting out the conditions of employment in writing is likely to reduce the risk of misunderstanding or confusion. When drafting a letter offering employment together with an employment contract it is useful to have them professionally reviewed to ensure that the terms are sufficiently clear. Doing so will also mitigate the risk of inadvertently incorporating unlawful terms. Although every employment contract is unique and needs to reflect the specific employment relationship between the employer and the employee, there are specific conditions of employment that should be included in an employment agreement, regardless of your company size or industry. You should include the following terms and conditions in your employment contracts: Name and personal details of the employer and the employee Commencement date of employment and probation period (if a permanent employee) Clause referring to employer policies and procedures Clauses referring to essential requirements of the role e.g. Licences, clearances, registrations Type of employment (i.e. full-time, part-time or casual) Place of work and hours of operation of the business Remuneration clause – setting out the method of payment e.g. salary, wage, or piece-rate) and what is included or paid separately e.g. superannuation, loadings, overtime, bonuses, benefits and allowances. Commission is usually set out in a separate scheme. Leave entitlements – the NES provides compulsory minimum standards for various types of leave e.g. annual leave, personal leave, long service leave Clauses protecting employer property and information – e.g. company vehicle, intellectual property Confidentiality agreement making clear what employer information should be kept confidential and setting out the possible consequences of a breach Non-disparagement clause preventing the employee from any action which can reflect negatively on the company Amount of notice required to be given by the employer and employee to end the employment relationship (there are minimum notice periods under the Fair Work Act) Termination conditions including Redundancy Clauses regarding Assignment, Jurisdiction, Severability and Variation of Terms Also consider provisions to deal with potential changes in the employee’s role or their scope of duties (i.e. will the same contract still apply if the employee has to change locations, roles or duties?) and depending on the employee’s position, perhaps clauses preventing them from setting up a similar business close to their former employer for a period of time and/or stealing their clients, though these clauses can be hard to enforce. Types of Employment Contracts Each type of engagement has different benefits and consequences, but it is preferrable that agreements take written form. How to engage workers in a manner that is right for your business will depend on your specific business needs. You should also consider the industry standards of each role and how the arrangement will affect your business financially. Below are the most common types of engaging workers: Full-Time Employment Contracts Full-time employees have ongoing employment and generally work 38 ordinary hours per week or an average of 38 ordinary hours a week. This may vary depending upon whether the relevant employee is covered by an industrial instrument. They are entitled to paid leave and are required to be given notice of termination. Part-Time Employment Contracts Part-time employees have ongoing employment and typically work less than 38 hours a week. They usually work regular hours each week and are entitled to the same minimum employment entitlements as full-time staff. However, the part-time entitlements are on a ‘pro rata’ basis. Casual Employment Contracts Casual employees work for an employer on a demand-only basis. Unlike a permanent agreement, casual employees have no firm commitment in advance of ongoing employment and generally work on an ad hoc basis (so the work hours are irregular). Casual employees are paid for the hours they work, and they can refuse shifts. Casual employees are not entitled to paid sick or annual leave, and their employment can generally be terminated at any time without notice. To compensate, casual employment attracts an hourly loading. Fixed-Term Employment Contracts This is when an employee is hired for a specified period of time or to complete a specific task or project. Typically, the contract ends either when a project is complete or an event has passed (e.g. a peak season). Fixed-term contracts clearly outline the length of the employment period from start to end. Although this type of arrangement is often short-term, fixed-term workers still receive the same entitlements as permanent employees though notice is not required if the employment contract ends at the end of the fixed-term. Independent Contractor Independent contractors are typically self-employed workers who contract their services out to other companies. Contractors negotiate their own fees and working arrangements and they have the freedom to work for multiple employers at once. It’s important for an employer to clearly define whether the person they hire is a permanent employee or independent contractor as there may be risks to the business if the contractor turns out to be an employee. Termination of an Employment Contract An employment contract can be terminated by either the employee (ie through a resignation) or the employer. Regardless of what triggered the termination, the correct procedure must be followed to ensure the process is fair and carried out in accordance with the workplace procedures. Depending on the circumstances, if an employee is dismissed or resigns, they may be entitled to be paid notice, and must be given their final payment, which includes any entitlements owed to them e.g. accrued but untaken annual leave. Make sure you clearly outline the terms relating to ending employment in your employment contract and employee handbook. For more information on Employment Contracts call us for free initial advice on 1300 651 415. Please note this guide is intended to provide general information only and should not be substituted for the advice of a trained employment relations professional. Peninsula accepts no responsibility for employment contracts that are made based on the information provided. If you are unsure about what to include in an employment contract, Peninsula recommends you seek out professional guidance.

Employment Contracts

Key Workers

Key workers are major contributors to a business. Typically, key workers possess a certain set of skills, knowledge, or expertise, which no other employee in the company has. They may also play a key role in decision-making and claim partial ownership of the business. For these reasons, retaining key workers is vital to the long-term growth and success of businesses. The term ‘key worker’ is also used to describe an essential service worker. For example, an emergency respondent or an employee involved in the supply, production, or distribution of energy, power, or fuel. What is the role of a key worker? Key workers often have a greater responsibility than other workers. They may hold a high-level position in management, have partial ownership of the company, or contribute to the business in another way that is perceived as highly valuable. As a result, key employees often receive a higher level of compensation, including extra benefits and incentives. Most key employees possess a unique set of skills and knowledge, which is usually acquired from further education like a bachelor’s degree, master’s degree, postgraduate, or MBA (Master of Business Associates). There are top-level positions that are obtained purely based on experience. The value of a key worker comes down to the degree of impact they’ve had on your business. Below are a few questions to guide employers in determining the key worker’s impact on the business: Have sales increased since they were brought on board? Has there been substantial market growth? Was there a positive impact on company morale and productivity? What is a Restraint of Trade? Losing a key worker can be difficult for a business. To minimise loss, it is common for a business to add a restraint clause in the worker’s terms of employment. For example, the key worker may have to give longer notice than usual, or they may be restricted from working for a competitor in the same industry. The purpose of a restraint clause is to impose certain restrictions on an employee after they leave the business. This is usually done for several reasons: Prevent disclosure of trade secrets Prevent a former employee from poaching clients from your business Prevent a former employee from directly competing with your company Protect your intellectual property The terms of the restraint clause have to be reasonable. Employers are generally allowed to include terms which are in place for the purpose of protecting the business. If the terms go beyond that, the courts may deem the clause as not enforceable. Given the complexities of a restraint clause, it is advisable to get a legal perspective on the document. A workplace relations expert will be able to detect nuances within the clause and provide insight into whether the courts may find the clause reason and enforceable. What are employee retention strategies? Many employers offer financial incentives and bonuses to retain key employees. While this may be effective in the short-term, money is not always the best retention technique. Below are some alternative techniques, steps and methods that employers can adopt: Know your key players- Take the time to perform individual assessments of your top players. Which of these employees would have the biggest impact on the business if they were to leave? Once they have been identified, they should be paid close attention to. Identify their core strengths- Are the key employees working at their full potential? There are instances where the best workers are constrained by their own roles. Review job descriptions of star players and note potential areas where their valuable contributions could be channelled. Encourage feedback and new ideas- It is necessary that employees have a voice. This can be achieved by having a system in place that makes it easy for employees to provide honest feedback and share new ideas. This will foster a cohesive work environment, making employees feel like a valued part of the business. Beyond compensation- Key employees should understand pay structures clearly and without ambiguity. This includes how much they earn, when they are paid, and the details of other bonuses and incentives. Refer to the current market value rates to determine the best salary package for your key workers. Frequent recognition- While greater financial support and bonuses helps to a certain degree to retain key employees, it should not be used as a replacement for regular feedback and recognition. Demonstrating appreciation brings rise to a strong sense of pride and accomplishment. Know your obligations Peninsula offers complete HR support and guidance for Australian businesses and employers. We work extensively with owners, employers, and managers to provide guidance on vital topics such as recruitment, performance, termination, and dismissal. Call us on 1300697028 to find out how we can help you.

Employment Contracts

Employee versus Independent Contractor

Business owners in Australia can hire employees or independent contractors, depending on the nature of their work. There is a clear distinction between an independent contractor and an employee which is based on the nature of the working relationship. The difference between an independent contractor and an employee is not always clear cut. The relationship between you and your employee is a contract of service, but the relationship between you and an independent contractor is a contract for service. The differences are subtle, but important. Employee vs Independent Contractor An employee usually works as the employer directs them. A contractor runs their own business and provides a service, usually works the hours required to do a task, and has a high level of control over the way they work. But even these factors are not necessarily enough to determine whether someone is an employee or an independent contractor. A court or tribunal looks at the full picture (totality of the relationship) and all possible factors (a multi-factor test) including: The degree of control over how and when the work is done Hours of work Expectation of ongoing work Assumption of financial risk Who provides tools and equipment Method of payment Leave entitlements Ability to work for other companies Right to delegate or subcontract If you incorrectly represent to your worker the nature of the relationship between you and that worker, under the Fair Work Act 2009 (the Act) this could be a sham contracting arrangement. Contractor vs Subcontractor While the terms contractor and subcontractor are similar by name, there are key differences regarding how these roles function and the nature of their agreements. As contactors are businesses, they generally negotiate the scope of work, which may include a project timeline, hours of work, services provided and method of payment. Due to the wide scope of some projects, contractors often rely on subcontractors to complete specific tasks they are unable to do, but they are generally still responsible for delivering the whole completed project to their client. For example, a building contractor may hire a roofing subcontractor to restore the roof on a home renovation project. With this situation, a subcontractor agreement exists between the subcontractor and contractor which sets out the terms of the arrangement between contractors. Contractor services Independent contractors have the freedom to negotiate prices and the terms of the engagement of their services. Because independent contractors run their own business, they don’t get the benefits that employees do. Employees work to the directions of their employers and receive entitlements from their employer such as leave, allowances and loadings, depending on the circumstances, which an employer has to manage and record. You can manage and keep track of employee rosters, timesheets, leave and absenteeism, and store employee profiles, wage and time records and related documents securely in the cloud with BrightHR. Contractor rights and protections Even though independent contractors run their own business, they still have workplace rights that are protected under the Act. The general protections protect both the independent contractor who has already been engaged and the person who has engaged them to provide services (the principal) as well as the contractor the principal proposes to engage. The independent contractor and proposed contractor are protected from coercion, adverse action, and abuses of freedom of association if they exercise a workplace right or engage in industrial activities. Workplace rights for contractors include any responsibilities they may have under a workplace law. Contractors can make a complaint or enquiry, or initiate a process or proceedings under a workplace law to seek compliance with it. Adverse action is taken by the principal against a (proposed) independent contractor if the principal threatens to or takes action for exercising a protected right (for example a workplace right or the right to engage in industrial activity) by: refusing to engage the independent contractor or terminating the contract discriminating against the independent contractor in the terms or conditions on which the principal offers to engage the independent contractor injuring the independent contractor in relation to the terms and conditions of the contract changing the position of the independent contractor to the independent contractor’s disadvantage refusing to make use of, or agree to make use of, services offered by the independent contractor, or refusing to supply, or agree to supply, goods or services to the independent contractor. Though bear in mind the principal is protected from the independent contractor if the principal exercises a right under a workplace law, and the independent contractor threatens to or takes action by: ceasing work under the contract, or taking industrial action against the principal. Sham contracting The Act protects employees from sham contracting. Sham contracting is when an employer misrepresents the nature of the relationship between the worker and the business i.e. that the worker is an independent contractor when, in fact, they are an employee. While some sham contracts are unintentional, (eg an employer misunderstands the employment arrangement), the mistake has significant ramifications insofar as it can impact leave accrual, penalty rates and notice of termination. To make it easier, BrightHR can help you keep track of employee entitlements. Engaging in sham contracting is prohibited under the Fair Work Act 2009 and penalties may be applied in the event of contravention. Under the sham contracting provisions act you are not allowed to: Claim an employee as an independent contractor Force an existing employee to become an independent contractor Dismiss or threaten to dismiss an employee if they refuse to become an independent contractor. Dismiss or threaten to dismiss an employee in order to engage them as an independent contractor to do the same work. Mislead an employee in order to persuade them to perform the same (or mostly the same) work as an independent contractor. As an employer it is important that you understand the common factors that determine whether a person is an employee or independent contractor. Keep in mind there is no single deciding factor, and each case is approached differently to decide if a contract is one of employment or independent contracting. Below are some of the most important factors to take into account: How much control the employee has over the work they do The right to delegate work to another The right to perform work for other companies Whether the arrangement is ongoing work or requires a specific task Who provides tools and equipment Payment methods Leave entitlements Please note the above list is not exhaustive. Since 27 February 2024, there are changes to sham contracting defence. Employers who engage in sham contracting can be penalised. A defence is one provided to a court to defend a claim against sham contracting. The previous defence to sham contracting claims (recklessness test) has been changed to a 'reasonableness' test. To defend a sham contracting claim, an employer must now prove that at the time the representation was made they reasonably believed the worker was engaged as a contractor. Changes to Independent Contractor definitions There have been changes to definitions and protections for independent contractors since 26 August 2024. A new definition of employment has been added to the Fair Work Act to help determine the meaning of 'employee' and 'employer.' This is used by some businesses to work out whether a worker is an independent contractor or an employee. There is a different method of checking if a worker is a contractor or an employee, using the new definition of employment that applies from 26 August 2024. This new method is known as the whole of relationship test. Get HR support with Peninsula Wondering if your business needs an independent contractor? Relying on free or stock templates for employment contracts? Standardised templates or contracts don't take into account the nuances of your business and can lead to potential penalties. Peninsula offers customised contracts, documents, and policies that are tailored for your business, staff, and work arrangements. Call us today on 1300750491 to learn more. The information in the above article has been compiled on the basis of general information current at the time of publication. Please note that the contents of this article and website and any information provided by our Fair Work Help Line do not constitute legal advice and are not intended to be a substitute for legal or other professional advice and should not be relied upon as such. Your specific circumstances or changes in circumstances after publication may affect the completeness or accuracy of this information. You should seek legal advice or other professional advice in relation to any particular matters you or your organisation may have. To the maximum extent permitted by law, we disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, currency and reliability of the information on this website, and to seek professional advice where necessary. Nothing contained on this website is to be interpreted as a recommendation to use any product, process or formulation or any information on this website. For clarity, Peninsula does not recommend any material, products or services of any third parties.

Employment Contracts

Falsifying Documents

Being an employer means you have to deal with several things constantly. This includes managing employees, looking after their health and safety, and keeping on top of your obligations. You also need to be on the lookout for any issues or challenges that may appear during managing employees. This can be performance management, probation or even something serious such as falsifying documents. In this guide for employers, we explain what is falsifying documents, the legislation around it, your responsibilities as an employer, and how Peninsula can help you. Please note that the information is general and not intended to replace advice. If you need help understanding aspects of falsifying documents, please consult a professional. Falsifying documents Falsifying documents is when employees make a document appear to be genuine. Falsifying a document can include tampering with it, altering it, or modifying it without permission or authorisation to do so. Employees may falsify documents to get more overtime, increase their bonus, or to get higher expense claims. They may alter timecards (or time clocks) to change their working hours or tamper with financial documents, inventory records or sales targets. Employees can also falsify documents such as resumes to be considered as a potential candidate by recruiters. Some examples of falsifying documents include: Altering the date of a medical certificate to make a worker’s compensation claim. Altering the driver’s license as proof of their age to enter an establishment. Have in possession a passport which indicated their photograph but a different name. Sometimes employers will falsify records and documents to make their company look more attractive, for example, to lenders. In some cases, an employee has been forced to falsify records under duress from others in the company. Offence of possession of falsified documents Falsification of document offences covers the creation, production of copies, or use of a copied or original falsified document. They can also be charged with this offence if they had in possession of a falsified document and had intended to use the falsified document. Each offence requires that the accused intended to convince someone that the falsified document was genuine and that the convinced person would do, or not do, something because they accepted the document as genuine. Penalties for falsifying documents Making false representations on the truthfulness of the contents can have serious consequences. There are penalties that the Court can impose for this charge: Imprisonment. Community Corrections Orders. Fine. Adjourned Undertaking. Discharge. Dismissal. Workplace policies As an employer you should have a policy to handle and manage claims of falsifying documents at the workplace. This policy should be written and clearly communicated with all employees. Clearly explain the potential consequences of falsifying documents in your employee handbook, including potential ramifications for their employment. The ramifications can include warnings, disciplinary action, or dismissal. This process should be laid out carefully and clearly in the handbook and updated when necessary. It should explain the types of documents in question and what is considered as falsifying. If an employee does falsify documents and you would like to address that conduct, make sure you always follow proper procedures. Implement effective policies with Peninsula Running a business involves managing multiple obligations and keeping track of your employees and their entitlements. We know business owners and employers have a lot to manage and that's where we step in. Peninsula offers customised documents, resources, and support that is specific to your business and industry. Contact us to learn more.

Entitlement to Work

Eligibility and the right to work in Australia

Australian citizens

New Zealand citizens

Permanent residents

Non-citizens with a valid visa

Types of documents considered as proof

Are there any other supporting documentation employers can accept?

Right to work checks

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Related Guides

Enterprise Agreements

Employment Contracts

Key Workers

Employee versus Independent Contractor

Falsifying Documents

Related Guides

Enterprise Agreements

Employment Contracts

Key Workers

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