Employment Relations - reflects the realities of work and its regulation at the end of the 20th century. Also reflects
the focus of both industrial relations and human resource management on the employment relationship and its
Two broad categories of employment regulation:
*Labour law (collective)
*Employment law (individual)
Workplace Law incorporates aspects of both.
Sources of workplace law:
Common Law - plays key role in clarifying who is an employee
Legislation/statutes - federal government given general powers to settle and prevent interstate disputes by
conciliation & arbitration and also set wages and conditions for own employees. Fair Work Act 2009, QLD IR Act
1999. Legislation has three major functions in terms of regulating employment relationship:
1. Establishes machinery for dealing with aspects of employment relationships
2. May be used to clarify uncertainty arising from common law
3. May create new rights and obligations.
Awards and agreements - set out minimum wage rates & working conditions which must be provided. They are
determined by Australian Industrial Relations Commission via dispute settlement in THE PAST. Federal minimum
wage set by Australian Fair Pay Commission between 2006 & 2010. Federal minimum wage set by Fair Work
Australia from 2010.
International law - ancillary source of regulation which can influence rights and duties of parties to employment. Key
source of regulation comes from International Labour Organisation
Fair Work Australia replaces:
*Federal IR Tribunal
*Australian Fair Pay Commission
Creating the employment relationship - recruitment and selection, offer of position, acceptance of offer,
consideration, establishing the contract, terms certain and complete and probation/qualifying period.
Express terms - usually written in the offer or told to you when you are offered a job (eg. wage, hours and days of
work, where you work)
Implied terms - once a contract is established the common law will automatically imply certain terms in the contract.
Health & safety, reimbursement, vicarious liability. Employees must - act in good faith towards employers, perform
duties in a proper manner, health & safety, reasonable care in performance of duties.
Psychological Contract - informal, implicit expectations and perceptions of employers and employees. Not legally
Two types of psychological contracts:
Relational - emphasises reciprocal relationship between employer and employee, is about social exchange, based on
long term agreement of mutual trust.
Transactional - emphasises instrumental relationship between employee and employer, is about economic
exchange, based on short term agreement.
Two types of violations regarding psychological contracts:
Reneging - where one party breaks a promise to the other
Incongruence - when parties have a different understanding concerning the obligations of the psychological contract
+ Aspects of psychological contract if upheld - Trust, job satisfaction, commitment, increased staff retention,
organisational performance, innovative behaviour.
- Aspects of psychological contract if violated - reduced employee citizenship, retaliation, absenteeism, turnover
Two common types of legal relationships - employer and employee or principal and independent contractor Employee - core of the relationship is to serve the employer, work under a contract OF service, employees are
required to comply personally with directions of employer. In return employees receive - reimbursement of
expenses, worker's compensation, redundancy/severance payments.
Independent Contractors - they provide 'services', operate under contract FOR service, usually engaged and paid to
achieve a particular task or outcome, do not take detailed direction from principal, run their own businesses and
may have multiple customers.
To determine whether an employee or independent contractor, tests are put in place.
Control Test - the greater the capacity of potential to control, the more likely they are an employee. Employees
usually have the right to determine when, where and by whom work is performed and the manner in which work is
performed. Can be problematic in the employment of technical or professional experts, employer may not be
capable of actively controlling or supervising work, focus on whether employer has reserved right to direct the
manner in which work is performed.
Economic Dependence or Organisation Test - focuses on the extent to which one party is reliant on the other for
income, for work, for organisations/routines. Organisation test focuses on determining whether the service provider
is carrying on a business on his/her own account that is separate to the employer, are the businesses separated by
location are they separately indentified.
Multi-factor test - incorporates the previous 2 tests. Courts will consider:
1. whether relationship indicates a contract of service or for service
2. the nature of the work and the manner in which work is performed
3. terms and terminology of the contract
4. if examination of the indicia does not provide a clear indication, decision should be based on whether
worker was running own business with independence in the conduct of operation
5. if still doubt, determination should be guided by notions of vicarious liability
Totality test -
Indicative Criteria Employee Contractor
Does the hirer have the right to exercise detailed control over the way the work is performed, so far as √hey have
scope to do so? (control test)
Is the worker integrated into hirer’s organisation ?(organisation/economic dependence test) √
Is the worker required to wear a uniform or display material that associates them with the hirer’s busine√s?
(organisation/economic dependence test)
Must the worker supply and maintain any tools or equipment (especially if expensive)? √
Is the worker paid according to task completion, rather than time worked? √
Does the worker bear any risk of loss, or have a chance of making a profit from the job? √
Is the worker free to work for others at the same time? √
Can the worker subcontract the work, or delegate performance to others? √
Is taxation deducted from the worker’s pay? Is superannuation paid? √
Is the worker responsible for insuring themselves against work-related injury? √
Is the worker provided with benefits (paid holidays and sick leave)? √
IS the worker described as a contractor on contract of hiring? √
Benefits of not having employees: flexibility in ending relationship, no access to unfair dismissal, no need to pay
superannuation, no need to pay leave entitlements, no need to pay Work Cover insurance, avoid liability for
To avoid 'employing' a worker - enter into an express written agreement, have each worker form a private company
and the contract is with the entity rather than worker, use labour hire agencies. National Employment Standards (NES) sets out the absolute minimum employment conditions, employers cannot
contract out of these entitlements, standard entitlements will prevail over terms in workplace agreements or
employment contracts that are less favourable.
10 minimum conditions under NES
• Maximum weekly hours of work (38 ordinary hours + ‘reasonable overtime’)
• Requests for flexible working arrangements
• Parental leave and r