Reading time: 5 minutes

As a small business owner, building a team is an exciting and challenging time. However, it is important to be aware of employment laws to ensure you provide your workers with the entitlements they are afforded under the law. This article outlines some important employment law considerations to help build your team and, ultimately, your business.

Employees vs Contractors

It is crucial to appropriately classify your workers as either employees or contractors to ensure you afford your workers the rights they are entitled to. An incorrect classification may subject you to an order from the Fair Work Commission or Federal Court. Here, you may have to pay fines, superannuation and other entitlements on top of what you may have already paid to your workers.

There are a number of factors to consider when determining what category your workers fall under, and some of these factors include:

  • control over work;
  • hours of work;
  • the expectation of ongoing work;
  • equipment;
  • remuneration;
  • superannuation;
  • leave;
  • income tax.

If you are unsure whether your workers should be employees or contractors, a lawyer can provide you with definitive results and advise you on your workers’ entitlements.

Contractor and Employment Agreements

Whether you are engaging workers as employees or independent contractors, you should have an appropriate agreement in place. Agreements between you and your workers not only define your relationship with them, but shape how your workers fit within your business. Having written agreements in place legally protects you as an employer as it provides you with a safety net if:

  • you need to discuss rights, duties, promises and agreements with your workers; or
  • a dispute arises with your worker.

Contractor Agreement

A contractor agreement outlines how you will engage a contractor and the key terms of your arrangement with them. Some key factors that the agreement should include:

  • details of the services of the contractor. For example, such details should include timeframes, deliverables and how you will pay the contractor;
  • the period of engagement. For example, you should consider whether you will engage the contractor on a project basis or ongoing basis; and
  • obligations of the contractors. For example, you may require your contractor to have a specific licence or qualification.

Employment Agreement

An employment agreement clearly sets out the relationship and rights between your business and your workers as your employees. Having a written agreement in place shows your commitment to your workers while also minimising the risk of a future dispute. It is important to outline the key factors of the engagement within the employment agreement such as:

  • payment terms;
  • working hours;
  • leave entitlements; and
  • termination.

National Employment Standards 

The National Employment Standards (NES) are 10 minimum employment entitlements that you must provide to all of your employees, although some standards differ slightly for casual employees. The NES addresses the following entitlements:

  1. maximum weekly hours that you can require your workers to work. For example, the maximum number of hours for full-time workers is 38 hours;
  2. requests for flexible working arrangements. Certain employees have a right to request changes to their working arrangement. For example, this may include a request to work from home;
  3. parental leave and related entitlements. If your employees have completed at least 12 months of continuous service with you, they may take up to 12 months unpaid parental leave and can ask for an additional 12 months;
  4. annual leave. Your employees are entitled to accrue a set number of weeks of leave per year. For example, full-time employees accrue four weeks per year of annual leave;
  5. personal carer’s leave and compassionate leave. Employees are entitled to 10 days per year of personal leave;
  6. community service leave. Your employees have a right to take leave for community-related work such as volunteer fire-fighting or jury duty;
  7. long service leave. Employees who have been with you for a long period of time accrue long service leave;
  8. public holidays. This addresses employees’ rights in relation to taking a paid day off on public holidays;
  9. notice of termination and redundancy pay. When making employees redundant, you must provide them with up to five weeks notice and up to 16 weeks redundancy pay, based on their length of service; and
  10. Fair Work Information Statement. As an employer, you must provide all new employees with this statement which contains information about employee entitlements.

Employee Handbook and Workplace Policies

An employee handbook plays a huge part in ensuring your business has the right framework in place to support your workers and business in succeeding. An employee handbook sets out the policies and procedures of your business, culture and expectations of your workers’ behaviour and work. While an employment agreement and contractor agreement governs the legal relationship with your workers, the handbook applies to all employees and contractors to an extent. Your employee handbook may include the following policies:

  • workplace health and safety;
  • IT;
  • anti-discrimination, harassment and bullying;
  • code of conduct and general office;
  • pay and leave;
  • grievances; and
  • disciplinary.

Key Takeaways

When building your team and engaging workers, it is crucial to be aware of and to adhere to the relevant employment laws. To ensure the success of your business and adhere to employment laws, it is crucial to:

  • appropriately classify your workers as either employees or contractors;
  • formalise your arrangement with your workers in a contractor or employment agreement;
  • provide your employees with the required entitlements under the NES; and
  • have set policies and procedures in place.

If you are looking at engaging workers and need employment law assistance, fill out the form on this page or get in touch with LegalVision’s employment lawyers on 1300 544 755.


Redundancies and Restructuring: Understanding Your Employer Obligations

Thursday 7 July | 11:00 - 11:45am

If you plan on making a role redundant, it is crucial that you understand your employer obligations. Our free webinar will explain.
Register Now

How to Sponsor Foreign Workers For Your Tech Business

Wednesday 13 July | 11:00 - 11:45am

Need web3 talent for your tech business? Consider sponsoring workers from overseas. Join our free webinar to learn more.
Register Now

Advertising 101: Social Media, Influencers and the Law

Thursday 21 July | 11:00 - 11:45am

Learn how to promote your business on social media without breaking the law. Register for our free webinar today.
Register Now

Structuring for Certainty in Uncertain Times

Tuesday 26 July | 12:00 - 12:45pm

Learn how to structure to weather storm and ensure you can take advantage of the “green shoots” opportunities arising on the other side of a recession.
Register Now

Playing for the Prize: How to Run Trade Promotions

Thursday 28 July | 11:00 - 11:45am

Running a promotion with a prize? Your business has specific trade promotion obligations. Join our free webinar to learn more.
Register Now

Web3 Essentials: Understanding SAFT Agreements

Tuesday 2 August | 11:00 - 11:45am

Learn how SAFT Agreements can help your Web3 business when raising capital. Register today for our free webinar.
Register Now

Understanding Your Annual Franchise Update Obligations

Wednesday 3 August | 11:00 - 11:45am

Franchisors must meet annual reporting obligations each October. Understand your legal requirements by registering for our free webinar today.
Register Now

Legal Essentials for Product Manufacturers

Thursday 11 August | 11:00 - 11:45am

As a product manufacturer, do you know your legal obligations if there is a product recall? Join our free webinar to learn more.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Casey D'Souza
Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards