This is the prescribed textbook for your course.
Available NOW at your campus bookstore!
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
Employment law
Chapter 21
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
by Barron & Fletcher. Slides prepared by Kay Fanning.
Employment
• Public Service Act 1922 (Cwlth)
protects employees from changes
in government by ensuring political
impatiability.
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-2
Employer-employee
relationship
• Control Test - Nature
- Degree of control able to be exercised by
a person over the manner in which the work is to be
performed by another.
• Delegation Test - Discretion of service provider to
delegate work to another party.
• Business Test - Commercial factors showing whether
working on own account or for someone else.
• Integration Test - Is work being performed on integral part
of the business operation of the person engaging the
services of the worker?
• Pragmatic Test
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-3
Pragmatic tests
•
•
•
•
•
•
•
•
•
•
•
Ownership of tools
Ownership of equipment or stationery
Method of remuneration
Payment of superannuation, insurance or workers’
compensation
Deduction of PAYG income tax
Use of business name or business structure
The ratio of money spent to money earned after deduction of
expenses
Whether invoices are required to be submitted prior to
payment
The responsibility for losses or for rectifying errors or
mistakes in the quality of work done
The freedom to work for other people
Whether the work is simply an identifiable job for a specified
period of time
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-4
Options
• Employee
• Independent Contractor - Contracts for service
• Agent - Person who makes a contract on behalf of
another with a third party.
If employee (substance), statutory compliance required
including:
–
–
–
–
–
–
Income tax laws
Superannuation guarantee laws
Workers’ compensation laws
Payroll tax laws
Workplace regulations taxation
Occupational health and safety laws
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-5
Contractors have protection against
unfair protects
Workplace Relations Act 1996 (Cwlth)
• S127A, 127B and 127C: Allows protection
to contractors with respect to contracts that
are unfair, harsh or unconscionable, or
against the “public interest”.
Trade Practices Act 1974 (Cwlth)
• S51AC: Unconscionable conduct in
business transactions.
• S51AD: Industry codes to be mandatory.
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-6
Outsourcing/contracting out
EMPLOYEE
Contract of
Service
Payment
Labour
LAND HIRE
COMPANY
Supply
Labour
Payment
BUSINESS
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-7
Formation of the Employment
Contract
•
•
•
•
Intention to create legal relations
Offer and acceptance
Consideration
Capacity of parties to enter into
contract
• Reality of consent
• Legality of object
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-8
Terms of the Employment
Contract
Express terms (spoken/written)
• Nature of work
• Location of work
• Wages
• Remuneration
• Hours of work
• Statement of duties/position description
(employee responsibility)
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-9
Terms of the Employment Contract
- employer’s duty
Implied terms (from circumstance of offer
and acceptance):
• To provide work
• To provide remuneration
• To not destroy or seriously damage the
relationship of trust
• To ensure safety of employees
By the Workplace Relations System:
Workplace Relations Act 1996 (Cwlth)
Annual Holidays Act 1994
Long Service Leave Act 1922 (Vic)
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-10
Terms of the Employment Contract - employee’s duty
Implied terms (from circumstance of offer and acceptance):
•
•
To work in a skilful and competent manner, and to exercise reasonable care.
To obey an employer’s lawful and reasonable commands (a command by the
employer that exposes an employee to an unreasonable risk of injury is not a
lawful command).
• To provide faithful service (also known as the duty of fidelity).
• To not prejudice an employer’s interests or act in a manner hostile to the
employer’s interests.
• To maintain confidentiality after termination of the contract (e.g. not to
disclose trade secrets).
• To account for moneys and property received on behalf of the employer.
• To hand over inventions made during the course of employment.
• To disclose to an employer information relevant to the business of the
employer.
By the Workplace Relations System:
Workplace Relations Act 1996 (Cwlth)
Annual Holidays Act 1994
Long Service Leave Act 1922 (Vic)
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-11
Terms of the Employment
Contract
By Industrial Bodies
eg. Australian Industrial Relations Commission
Minimum mandatory standards:
• Hours of work
• Wage rates
• Classifications
• Rosters
• Overtime
• Penalty rates
• Consultation
• Training
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-12
Lawful termination of Employment
Contract
• Termination by death
• Termination by the dissolution or bankruptcy of the
employer
• Termination by sale of business by the employer
• Termination by frustration of contract
• Termination by abandonment of contract
• Termination by breach of contract
• Termination by notice
• Termination without notice
• Redundancy
• Suspension by employees
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-13
Unlawful termination of
employment
• Dismissals prohibited by law
• Unfair dismissals: Unfair dismissal is assessed
as being “harsh, unjust or unreasonable”.
Assessment based on objective analysis of all
circumstances applicable to employer and
employee, using “reasonable person test”:
- reason for dismissal
- procedural fairness
(using concept of “a fair go all round”)
• Constructive dismissals
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-14
Remedies for unfair
dismissals (via legislation)
Employee:
• re-employed in the same position
• re-employed in an alternative position
• paid an amount of compensation.
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-15
Remedies for breach of the
Employment Contract
Employer’s remedies
•
•
•
•
•
•
•
•
•
•
•
Termination of employment
Damages
Injunctions and specific performance
Suspension of an employee
Orders by an industrial tribunal
Retraining
Disciplinary procedures
Contract negotiation
Private mediation
Withdrawal of discretionary benefits
Reallocation of duties or hours of work
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-16
Remedies for breach of the
Employment Contract
Employee’s remedies
•
•
•
•
•
•
•
Resignation
Damages
Injunctions and specific performance
Unfair dismissal proceedings
Unlawful termination
Claims for sums due
Orders by an industrial tribunal
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-17
Liabilities and rights of employers and
employees to third parties
Vicarious Liability
• Employer is liable to a third party for negligent acts or omissions of
an employee, carried out in the course of employment, where these
acts or omissions cause loss or damage to a third party.
Liability for Contracts
• Employer is liable for contracts entered into by an employee as
agent of employer.
• Employee liable for contracts if act outside of authority given by
employer.
Liability for Criminal Acts
• Criminal acts of employee conducted in course of employment in
strict liability cases without intention to commit the act results in
vicarious liability.
– Employer liable - where at direction of employer.
– Employee liable - no employer direction but intention to commit the acts.
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-18
Statutory regulation of
employment relationship
• Worker’s compensation
• Occupational Health and Safety
• Anti-discrimination and equal
opportunity
• Occupational superannuation
• Workplace privacy
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-19
Worker’s compensation
(Federal and State legislation)
• Provides wage and salary
maintenance and prescribed benefits
for injured workers
e.g. Pensions
Lump sums
Medical expenses
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-20
Worker’s compensation
Coverage:
• Work-related injuries
• “Worker” as defined in legislation
Insurance obligations:
• Mandatory Workers’ Compensation Insurance required by employers
with “Work Cover”.
Employee benefits:
• Weekly benefits for initial period
• Medical and hospital benefits are covered.
• Economic and non-economic losses
• Retirement provisions
Rehabilitation and return to work obligations
• Common Law Access: Dependant on relevant legislation.
• Dispute Resolution: Dependant on relevant legislation.
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-21
Occupational Health and
Safety
• Employer and employee duties
• Risk identification and codes of
practice
• Sanctions and enforcement
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-22
Duty of care
EMPLOYER
• Maintain a safe working
environment.
• Maintain safe systems of
work.
EMPLOYEE
• Wear safety equipment
supplied by the employer.
• Follow lawful and reasonable
safety policies determined by
the employer.
• Maintain plant and equipment • Take reasonable care to
in a safe condition.
prevent injuries to fellow
employees.
• Provide training and
instruction to employees on
workplace safety, and provide
supervision of employees
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
,mhgbffdsasgfghjjklkl;; Australia
21-23
Anti-discrimination and equal
opportunity legislation
• Human Rights and Equal Opportunity
Commission Act 1986
• Affirmative Action (Equal Employment
Opportunity for Women) Act 1986
• Racial Discrimination Act 1975
• Sex Discrimination Act 1984
• Disability Discrimination Act 1992
• Workplace Relations Act 1992
• Workplace Relations Act 1996
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-24
Anti-discrimination and equal
opportunity legislation
Nature of discrimination
• Race
• Sex
• Marital status
• Political belief
• Religious belief
• Disability
• Physical impairment
• Intellectual impairment
• Family responsibilities
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-25
Anti-discrimination and equal
opportunity legislation
Complaints and disputes
• Conciliation resolution at disputes
Tribunal
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-26
Anti-discrimination and equal
opportunity legislation
Affirmative action
Affirmative Action (Equal Employment
Opportunity for Women) Act 1986 (Cwlth)
For employers with 100 or more employees:
• To ensure appropriate action to eliminate
discrimination by employers against women
in relation to employment matters.
• Measures to promote equal opportunity for
women in employment matters.
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-27
Anti-discrimination and equal
opportunity legislation
Sexual harassment
Sex Discrimination Act 1984 (Cwlth)
• One person subjects the other to an
unsolicited and unwelcome act of sexual
conduct or physical intimacy in
circumstances where the other person has
reasonable grounds to feel offended,
humiliated or embarrassed.
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-28
Anti-discrimination and equal
opportunity legislation
Occupational superannuation
• To fund and maintain living standards for an
ageing population in the future.
• Requires employers to make superannuation
contributions on behalf of their employees at a
prescribed percentage of the employee’s wage
or salary, as defined by the legislation, to a
complying fund.
• Rate: 2000-01 8%
2002-03 9%
• Penalties for non-compliance: Non taxable
deduction Superannuation Guarantee Charge.
Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e
Copyright © 2000 McGraw-Hill
by Barron & Fletcher. Slides prepared by Kay Fanning.
Australia
21-29