To determine this , you must consider the following points :
• Whether there is a mutual understanding or expectation between the boss and the worker
• Whether the worker can choose to accept or reject work ( and whether this happens in practice )
• The future availability of continuing work
• Whether there are other workers performing the same work who are full-time or part-time workers
• Whether there is a regular pattern of work for the worker .
None of these points should be considered in isolation and you need to look at both the contract and the practical reality of the relationship . You need to ask , ‘ What was the mutual understanding or reasonable expectation between the worker and the boss ?’.
Do you need to do anything ? Nothing for any casual already employed on 26 August 2024 , but any casual you employ after that date meets the new definition of a casual . Also take note , this must be correct from commencement , or you can be penalised .
Casual Employment Information Statement When a causal worker starts with your business you need to provide them with a Casual Employee Information Statement available from Fair Work . See the link above in the section on NES .
One thing that has changed though , is the timing of when you must give the casual employee a copy of this Statement :
• Small Business ( 15 or fewer workers ): on commencement and on completion of 12 months of employment
• Non-Small Business ( 15 plus workers ): on commencement , after 6 months of employment and thereafter every 12 months
To do :
• Review all your current casual employee contracts and any terms that may indicate a firm advance commitment to continuing and indefinite work . Make sure that any new casual hired after 26 August fits the new definition and has a contract reflecting that .
• Check your induction process to make sure casuals are receiving the Casual Employee Information Statement when they should be .
4 . New definition of employer and employee
There has been much debate about when a person has been hired as an employee or as an independent contractor and equally as many approaches to what should be used to decide this . From 26 August 2024 the Fair Work Act includes new definitions of an employer and an employee , which in turn should clarify the definition of an independent contractor .
The terms ‘ employer ’ and ‘ employee ’ will be determined ‘ by assessing the real substance , practical reality and true nature of the working relationship , by considering the “ totality ” of the relationship ’ according to the Fair Work Act 2009 . This means that a fairer test will again apply by looking at the practical reality of the working relationship , as well as any terms of a contract that may exist .
So , what do you need to look at in deciding if someone is an employee or an independent contractor ? You must ascertain the real substance , practical reality and true nature of the working relationship by assessing all the following :
• The totality of the relationship
• The terms of the contract governing the relationship
• Other factors showing how the contract is performed . For example , does the worker wear a uniform provided by the employer ? Do they drive a vehicle provided by the employer ? Do they need to request leave ? Are they able to work for other employers ? Do they get paid the same amount each month ? Do they invoice the employer to be paid ? Do they need to supply an ABN ? Are they responsible for their own tax and superannuation ? Does the employer provide the tools of trade ?
These are just some points to consider , and each employment relationship is determined on a case-by-case basis . If you are unsure , please seek legal advice .
To do :
• Review all your current contractors against the new employee definition . There are tools available to assist you at Fair Work ( https :// www . fairwork . gov . au / find-help-for / independent-contractors ).
• Review all your employment contracts before hiring any new contractors after 26 August 2024 .
There are more changes made but these are the main ones that I think will affect you . If you are uncertain about whether you have hired an employee or an independent contractor , or if you have really hired a casual not a full timer , always seek clarification the from the Fair Work Ombudsman ( https :// www . fairwork . gov . au /) or a solicitor .
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