What employment contracts does my small business need? Small business lawyer series – Article 3

Many small businesses will be involved in recruiting employees in a variety of capacities and for a range of purposes. If you are in the position where you would like to hire employees, you should consider the roles that you would like these employees to fulfil and the types of contracts that you will require to carry out this goal.

We have compiled a list of the most useful employment contracts that small businesses often need. They are:

• Casual employment contracts
• Fixed-term employment contracts
• Part-time employment contracts
• Full-time employment contracts

Casual employees are those employees that you hire on an ad-hoc basis. For example, during the Christmas and New Year period many retail stores hire casual employees to cope with the increase in customer sales demands during this busy holiday period. Casual employees are usually paid on an hourly basis and are not entitled to paid leave and many other benefits prescribed by the Fair Work legislation.

Fixed-term employees are usually hired by small business to carry out work for a specific time period. If you would like employees to carry out a specific project within an identifiable time frame, then drafting a fixed-term employment could be a useful option for you.

Part-time employees are employees that are hired to work for less than 38 hours per week. These employees are entitled to paid leave and long service leave according to Fair Work Australia and the award that their employment may fall under. Despite the fact that part-time employees may work less hours than a full-time employee, please be aware that these employees are still entitled to a number of benefits under Australian law.

Full-time employees are perhaps the most common form of employees who are hired on a permanent basis to carry out duties for the small business that has hired them. Full-time employees are generally expected to work for an average of 38 hours per week and are entitled to a full suite of paid leave, long service leave and other entitlements under Australian law.

Who is an employee?

When investigating the type of employment contracts that your small business may require, you should understand the difference between an employee and a contractor. This is because employees and contractors are entitled to different benefits under Fair Work legislation, and you are required to provide these workers with their respective entitlements as their employer.

It is often hard to tell the difference between an employee and a contractor. However, it is a good starting point to note that employees work in your business and are part of your business whereas contractors run their own businesses. According to the Australian Taxation Office, there are also some types of workers who will always be considered as employees. These workers include:

• Apprentices
• Trainees
• Company directors
• Labourers
• Trade assistants.

Conclusion

The process of hiring employees can become quite complicated due to the range of legal entitlements they must be provided with under Australian law. To make sure that you understand what your employees are entitled to and that you are not breaching the law, it is a good idea to seek legal advice from an employment lawyer who has specific knowledge in this field.