I received a phone call from a client of mine just recently. He told me that he had received an email from the Fair Work Ombudsman and that it was about a past employee claiming a substantial sum of money for hours worked.
“What type of request is this?” I asked.
“Casual loading for every hour that he worked in the 3 month period, which works out to be about 300 hours at 25% of his hourly rate. This is a lot of money Karen, over $1800.”
“Not a problem Darren, just scan a copy of your contract and send it to Fair Work to show that he was a permanent part time employee.” I said.
“I can’t”, He said.
“You don’t have a scanner?” I asked.
“I didn’t give him a contract; it was on my To Do List. I was busy and I didn’t get around to
“Okay, that is alright, did you pay him his Annual leave when he finished.” I asked.
“Not yet, I haven’t done his final pay as yet, he only finished last week.” He said.
“Did you terminate him, or did he leave of his own volition?” I asked.
“He resigned.” He said.
“Okay, let’s get together and see if we can sort this out.”
The final result was that he paid the employee a lesser sum of money and the employee agreed to dismiss the case. He would have had sufficient grounds to argue the case being all other employees are permanent part time employees and the fact that the employee did not question his weekly wage whilst being employed. However, Darren didn’t want to go through the time consuming and expensive process of fighting the case so he paid a sum of money to make it go away.
Darren was disappointed that Fair Work were very one sided. They only wanted to see the case dismissed and expected Darren to put whatever sum of money was necessary to make it go away. Darren felt that, despite the fact that his employee didn’t have a contract, he had still done the right thing and had still paid him the correct sum of money whilst he was employed by him and it wasn’t very fair that the employee could make these claims and he had to pay additional money to make the matter “go away”.
This is a deplorable situation, but one that is very common.
The employment relationship is subject to the fair work legislation (the act and the regulations), the appropriate award (decided by their profession) and there is a safety net of minimum conditions that must be adhered to contained in the National Employment Standards (NES) which form part of the Fair Work Act 2009. There is a lot here, I know, and it can be confusing, in addition the NES contain general protection in respect to the following:
- Fair Work Information Statement
- Maximum weekly hours
- Request for flexible working hours
- Parental Leave
- Annual leave
- Personal Carers leave
- Community Service Leave
- Long service leave
- Public Holidays
- Notice of Termination and Redundancy
And contravention of these provisions may result in penalties of up to $10,200 for an individual and $51,000 for a corporation.
Clearly with 10 requirements under the NES, the Fair Work Act, and the Awards, it just makes sense to have a contract and Darren’s situation would not have arisen if he had a contract.
You should obtain assistance with the preparation of your initial contract. Once you have a permanent, permanent part time and casual contract precedent prepared for your company, you can use this for all staff, just altering certain sections dependent upon the wage and conditions that you agree with them. There are sections of the contract that must remain and sections that you can change. It is also helpful to ensure that you are paying them the correct amount under the Award that they would be employed under. All awards have classifications and it is helpful to know exactly where your employee sits to ensure you are paying them the correct amount and you have a mechanism in place each year to increase depending upon their level of experience.
You do not need to obtain the assistance of a lawyer to complete your contracts of employment. A HR Professional can assist you in this regard and there are many in your area that can assist you. If you are unsure who can help you, you are welcome to contact us for more information or direction.