How and when to engage people (part 1) – guest author Jo Hanlon

Eeny, meeny, miny, moe: getting that job done how and when you need it (part 1)

With thanks to our guest contributor: Jo Hanlon of  Mind Your Ps, our go-to HR experts

Many business owners or managers are put off from engaging people to do work for them because they still think they have to employ someone full-time; all they can see are the real or perceived issues and complications that can come with that type of engagement model.

Increasingly, there are a larger variety of models to use in engaging someone to assist you with getting a job, task or project done on a one off, short term, medium term or long(er) term basis which may be a better choice.

A number of options include:

Employees

• Full time employee – a person who is appointed (as an employee) to work 38 hours per week or an average of 152 hours per 4 weeks.
• Part time employee – a person who is appointed (as an employee) to work a pattern of regular hours amounting to less than 38 hours per week or an average of 152 hours per 4-week cycle.
• Casual employee – a person who is appointed to work only as and when they are needed, possibly in a regular pattern of work, or intermittently (e.g. 38 hours one week and 0 the next), depending on the needs of their employer, which may be in response to one off, cyclical or seasonal demands.

Be aware that under many modern awards, casual employees or even labour hire workers who work a regular pattern of hours over a 6 (or 12) month period may be required to be offered a permanent role by the employer. The casual worker does not have to accept the offer but, for compliance reasons, it may be required to be offered. In any case, if this is a requirement, it is advisable to document and file the offer and acceptance (or refusal) in writing. Also, most awards state a minimum shift length or payment  amount in lieu of work for casual workers performing a shift of 2, 3 or 4 hours.

All Australian-based employees have a number of rights and entitlements, including: minimum pay rates by classification level and/or age, a set amount of paid or unpaid leave, various allowances, a superannuation payment guarantee, penalty rates and termination or redundancy notice period. These entitlements are set according to Fair Work, federal or state-based employment legislation and/or the appropriate industrial instrument or enterprise agreement if they are covered by one. Please refer to the appropriate legislation, award, agreement, Fair Work Information Statement or Fair Work Act 2009 for further details.

Increasingly, ignorance of an employee’s rights by their employer is proving to be no defence in a court of law. For those that read such media releases, if, when an audit is done by the ATO or other compliance agency and shortfalls in payments of rights and entitlements to staff are discovered, you will be aware that substantial back payments plus substantial fines may apply.

Contractors

Contractors are not generally considered employees but are workers or specialists who are contracted by an entity to work for a period of time and/or to complete a specific project or piece of work.

There are a number of conditions which need to be met before a contractor can be considered a true contractor, as determined by the ATO, which include: use of their own equipment to undertake the job, being legally responsible for the commercial risk of their own work and footing the cost of rectifying any errors, freedom over how the job is completed subject to the terms of the contract, being able to sub-contract the work, basis of how the job is paid, and being independent of your business, i.e.: being able to take on other clients.

A number of employers have tried to use this type of worker engagement model as a way of avoiding fulfilling the legal obligations they normally have towards an employee, so be clear you are meeting the requirements of engaging a true contractor or you also may be up for additional fines and costs.

Different types of contractors include:

• Fixed term contractor – this type of worker is normally contracted to undertake work for a set period of time which may be a number of days, weeks or months.
• Maximum term contractor –the contractor is contracted for a maximum term i.e. for up to a maximum of X months from the date of signing or commencing the contract.

The longer the term of any contract relationship is in play, and the more full time hours the contractor works for an entity, especially if the contract is extended for a further term or there is scope creep, the more likely it is that a court would have a view the contractor will be entitled to all the rights and entitlements of an employee in relation to conditions such as: unfair dismissal, paid leave, superannuation payments and parental leave entitlements, especially if the contractor does not stick to the conditions listed above. To avoid these pitfalls, it is highly recommended you check with your accountant, employment lawyer or an IR expert if you are not sure what type of worker you need…

See part 2 of this article here.

Learn more about Jo at her website.