Employment

Incorporated associations, regardless of their size, need people to carry out the business and activities of the association. Those associations that have the funds often employ staff to undertake specific tasks, while others without the financial resources may have to rely entirely on volunteer workers. Many associations rely on both employees and volunteers. 

When employing people, incorporated associations generally need to be aware of employment law and any relevant industrial agreement or instrument with which they are required to comply. This chapter provides some general information on recruitment and appointment of employees, employment contracts and employment law.

Key Points

  • Incorporated associations that engage employees should have clearly formulated selection criteria and job descriptions.
  • When engaging employees, it is important to understand what industrial awards and agreements (if any) apply and which employment laws are relevant to that employment.
  • In relation to the above point, an incorporated association may be a ‘constitutional corporation’ subject to Commonwealth, rather than State, industrial relations jurisdiction.
  • If the management committee is required to terminate an employee's contract of employment, it is essential to understand how to terminate the employment in accordance with the contract and in accordance with fair procedures to ensure the termination is lawful and fair.
  • Incorporated associations must keep records relating to employment, including payment of wages, leave, tax records and superannuation records.

Recruiting and appointing employees

Employees may be employed by incorporated associations to undertake a range of duties, including:

  • service delivery to undertake those activities to which the association has committed as a means of furthering its objectives. For example, community educator, advocacy caseworker, policy worker, recreation coordinator, personal care worker, youth worker, counsellor, crisis worker, refuge worker, information provider (including over the telephone);
  • administration and support to assess, develop and maintain the administrative infrastructure required for the association to conduct its business. For example, reception, financial reporting, accounts, corporate documentation, media and public relations, records, data systems, office management;
  • management to manage the day-to-day operation of the association. This may include one or more levels of management or coordination. For example, manager, coordinator, supervisor, team leader, executive officer.

Sometimes, employees will be given responsibilities across different areas. For example, a manager may also have service delivery responsibilities, a senior caseworker may be given the task of supervising junior workers or all employees may have joint responsibility to share administrative duties.

Types of employment

There are a number of different working arrangements that employers can apply when engaging workers. Incorporated associations should consider what type of employment they wish to offer as it may affect the terms and conditions of employment.

  • Full time: employees generally work between 38 and 40 hours per week on a regular, ongoing basis. Benefits such as paid sick leave, annual leave, holiday pay, long service leave and carers usually apply.
  • Part time: employees generally work regular hours each week but fewer than full time employees. Part time employees are usually given the same basic entitlements as full-timers, based on hours worked (this is called pro-rata).
  • Casual: employees are usually employed on an hourly, daily or weekly basis and don’t usually get paid sick leave or annual leave.
  • Fixed term: employees are employed to do a job for an agreed length of time. Many employers hire fixed term employees to do work on a specific project or fill in for employees who may be on leave.
  • Commission: people in this category may be paid on a ‘commission only’ basis which means they only receive money when they sell or achieve a specific target.

Start at the beginning

When an incorporated association is considering employing a person, it is essential to take into account some fundamental concerns, including:

  • what the association wants the employee to do;
  • the selection process that will be followed;
  • the employment conditions (full/part time, short/long term contract etc); and
  • the legal obligations of the association as the employer.

In considering these matters, incorporated associations should take into account their own objectives and needs, legal and regulatory requirements, potential employee needs and resource availability.

Job descriptions

Job description profiles are useful tools in ensuring that any new position fits with the association’s objectives, vision and strategic plan.

The document should include details such as:

  • the position title;
  • the essential tasks or duties of the position;
  • the hours that the employee will be required to work;
  • the remuneration the employee will receive in return for work performed;
  • the reporting structure (who the employee reports to and who, if anyone, reports to the employee); and
  • other conditions of employment.

A job description can be sent to prospective employees so that they know what the job requires, and allows them to decide if they think they are suitable for the position. 

Selection criteria

The association should set out in writing the matters that will be taken into account in selecting applicants for employment. These are called selection criteria. The use of selection criteria ensures that the selection process is transparent, fair, consistent and accountable.

The selection criteria should include matters such as the qualities, skills, knowledge and experience that the incorporated association requires of a successful applicant. For example, ‘well developed written communication skills’ or ‘ability to develop Excel spreadsheets’. It is helpful to limit the number of selection criteria to, six to ten as having too many often makes the selection task more difficult.

It is fair and normal practice to let applicants know what criteria will be used to assess applications, and any special weight that will be given to each criterion. The selection criteria are usually forwarded to potential applicants along with the job description.

When preparing selection criteria (and later, selecting people for employment through the interview) associations need to be mindful of anti-discrimination legislation (See Discrimination and Harassment).

Advertising the position

An association may need to advertise for applicants for a position (although this is not a requirement of the law). The Association should use the best means available (newspaper, recruitment agent, websites) to attract suitable applicants.

The advertisement should provide details about the job and contact details for obtaining further information on the job description and selection criteria.   When preparing advertisements, consideration should be given to requirements under anti-discrimination legislation, and any information provided should not be misleading or deceptive.

The employment interview

The employment interview provides the employer with an opportunity to meet face-to-face with an applicant, learn more about the person and see if he or she is suitable for the association, persons or committee interviewing the applicant (the interview panel) should prepare a basic set of interview questions relevant to the particular job description and the selection criteria. For example, questions about a person's previous employment experience, qualifications and reasons for applying for the job will generally be relevant.

As noted above, all aspects of the employment selection process are subject to anti-discrimination legislation and the interview panel should keep this in mind when developing questions. For example, questions about a person's religion, marital status or sexual orientation are not likely to be relevant and may give rise to discrimination issues.

The employment contract

Generally, a contract of employment forms the foundation of the relationship between an employer and an employee. The employment contract contains the terms and conditions of employment, including matters such as pay, leave and hours of work. A contract of employment may be in writing or verbal. However, it is preferable to have a written contract, as this generally minimises any confusion, uncertainty or doubt about the terms and conditions of employment and in particular, key terms and conditions like remuneration, duties and notice of termination of employment.

For the majority of incorporated associations, an employment contract could be:

  • a contract that supplements entitlements in:
    • an existing industrial award,
    • a collective agreement made between an employer and either employees or a union/s; or
  • an individual agreement made between an employer and one employee;
  • a ‘common law’ contract of employment, particularly where the association is not covered by any award or agreement and only legislated minimum entitlements apply.

Industrial relations systems

Industrial relations and employment in Australia is governed at two separate levels – the State level and the Commonwealth level. Each level has its own system of regulation. The terms and conditions of an employee's contract may be subject to a State or Commonwealth industrial award or agreement. In addition, there are State and Commonwealth workplace laws, such as minimum conditions, which may apply to that employment.

As a result of the previous Commonwealth ‘Work Choices’ legislation the Workplace Relations Amendment (Work Choices) Act (2005), incorporated associations fall under the Commonwealth system by virtue of them being ‘constitutional corporations’. To be a constitutional corporation, a body must firstly be incorporated, and secondly, have ‘significant’ or ‘substantial’ trading or financial activities. This can include charitable organisations, clubs, educational institutions and health providers.

Clearly, all incorporated associations meet the incorporation test, but many will need clarification on whether they are engaged in sufficient financial or trading activities to be considered constitutional corporations. Associations that are not constitutional corporations will generally fall under the Western Australian labour relations system.

To clarify whether your association falls under the Commonwealth or the State system, or if you are unsure what industrial award and/or agreement may apply to your incorporated association, you can contact the Labour Relations Division of the Department of Mines, Industry Regulation and Safety for advice.

Wageline is a service provided by Labour Relations that can provide assistance in determining which State or Commonwealth award, agreement and legislation may apply.

Wageline can be contacted on telephone 1300 655 266. You can also visit the Labour Relations website for more information.

Western Australian industrial relations system

The Western Australian industrial relations system is generally governed by the Industrial Relations Act 1979. It is also underpinned by minimum conditions of employment provided by the Minimum Conditions of Employment Act 1993.

This latter Act contains a minimum set of conditions that are taken to be implied into every contract of employment, award or industrial agreement entered into in Western Australia.  These minimum conditions cover areas such as:

  • minimum rates of pay;
  • annual leave;
  • sick leave;
  • public holidays;
  • bereavement leave;
  • parental leave; and
  • consultation in the event of significant change (including redundancy).

In addition, the Long Service Leave Act 1958 sets out minimum entitlements to long service leave for all employees in Western Australia (generally, 8 and 2/3 weeks’ leave after 10 years’ continuous service). The Long Service Leave Act 1958 generally applies to all employees in Western Australia, unless a federal award or agreement deals with, or excludes, long service leave entitlements.

The relevant State Government authority is the Labour Relations Division of the Department of Mines, Industry Regulation and Safety, which can provide a wealth of information on all aspects of the Western Australian industrial relations system (including those that apply to constitutional corporations) and how it interfaces with the Commonwealth’s laws.

Contact Wageline on 1300 655 266 or visit the website.

Commonwealth industrial relations system

In 2009, the Commonwealth Government introduced a new national workplace relations system under the Fair Work Act 2009. Some key elements of the system under the Fair Work Act include:

  • A legislated set a 10 minimum National Employment Standards
  • The creation of modern awards designed to establish one set of minimum conditions and wage entitlements for employers and employees across Australia who work in particular industries and occupations.
  • Streamlined protections dealing with workplace rights (including protection against discrimination), industrial activities and unfair dismissal.

The workplace relations system is regulated by two agencies, Fair Work Australia and the Fair Work Ombudsman.

To find out more about Commonwealth awards and agreements, you can contact the:

Fair Work Commission
Telephone: 1300 799 675
Perth Office contact details
Telephone: 9464 5172
Address: Floor 16, 111 St Georges Tce, PERTH WA 6000
Website: www.fwc.gov.au
Email: perth@fwc.gov.au

Fair Work Ombudsman
Infoline: 13 13 94
Address: GPO Box 9887, In your capital city
Website: www.fairwork.gov.au

Establishing the terms and conditions of employment

Industrial awards

An industrial award is a legally binding document that outlines the wages and conditions of employment for groups of employees in an industry or occupation, for example, the Western Australian Hairdressers Award 1989.  Generally, employers cannot provide conditions of employment that would be less favourable than award conditions. They may provide conditions that are more favourable that the award conditions or enter into arrangements with employees in relation to matters that are not dealt with by the award.

Western Australian awards are made by the Western Australian Industrial Relations Commission. Traditionally, Commonwealth awards were made by the Australian Industrial Relations Commission.

State awards covering employers that are not constitutional corporations continue to apply in the State industrial relations system. Western Australian awards can only apply to employers that are in the State industrial relations system (that is, employers that are not constitutional corporations).

As indicated above, Labour Relations will be able to assist incorporated associations that are not constitutional corporations to determine whether they are required to apply a State award in their particular circumstances.

Incorporated associations that are constitutional corporations can seek advice about award coverage from the Fair Work Infoline on 13 13 94.

An employment contract based on an award might simply be a letter which acknowledges that the position is subject to the provisions of a particular award.

Employer-employee agreements

If your association is not a constitutional corporation, it may be eligible to make use of a form of individual agreement known as an ‘Employer-Employee Agreement’ (EEA).

An EEA is a voluntary written agreement between an employer and employee, which generally replaces the provisions of an award and forms the basis of the contract between the two parties. (Note that an EEA cannot be made while an industrial agreement, i.e. a collective agreement, applies to an employee's employment).

An EEA cannot be offered as a condition of employment. In offering EEAs, the employer must give a new employee the choice of an EEA or the applicable award, or, if there is no applicable award, a ‘common law’ contract of employment containing the same terms as an EEA.  The maximum term of an EEA is three years.

EEAs must be registered by the Registrar of the Western Australian Industrial Relations Commission within 21 days of signing, and must pass a no-disadvantage test to ensure that employees are not worse off than they would be under a relevant award. 

There are also a number of other substantive and procedural requirements that must be met before an EEA can be registered.

For more information about EEAs is available from the Western Australian Industrial Relations Commission.

Common law contract of employment

Common law contracts are individual agreements between an employer and an employee. Unlike statutory agreements, it is not possible to negotiate out of any applicable award or collective agreement provisions or conditions in a common law contract. Whether they are included in the contract or not, the terms of the award or collective agreement still apply.

Common law contracts may therefore be most useful to incorporated associations where there is no award that applies to its employees. However, any contract would still need to comply with the minimum conditions imposed by the applicable State and Commonwealth legislation.

Labour Relations can provide assistance with developing a common law contract.

Should the contract be in writing?

As noted earlier, it is not essential that a contract of employment be in writing, but it is certainly desirable.  It is good practice to confirm any offer of employment in writing, and for the employee to accept the offer by returning a signed copy of the letter, accepting its conditions, before starting work.

A letter of employment could cover:

  • details of the duties required by the position;
  • whether the position is full-time or part-time, casual or permanent;
  • the award or agreement (if any) applying to the position; and
  • any special or additional conditions that apply in the association’s workplace.

Termination of employment

A contract of employment may be lawfully terminated in a number of ways. If your incorporated association needs to terminate an employee's employment, it is important to find out how the employment can be terminated and what procedures the association must follow in effecting that termination. It is advisable to obtain legal advice before terminating an employee's employment.

Some of the ways in which employment may come to an end are set out below.

  • Termination by operation of law: for example if an employee dies.
  • Completion of the contract: an employment contract for a fixed-term, or for the completion of a certain task/project, ends automatically at the end of the period, or on completion of the task/project.
  • Termination by notice: Either party may terminate a contract of employment by giving the proper period of notice of termination. The period of notice may be set out in the employee's contract of employment or an applicable award or agreement. In the absence of a right to terminate by giving a specified period of notice, an employee is entitled to ’reasonable notice‘.  This can often be a relatively long period of time, and will vary depending on the circumstances, including the employee’s age, seniority and length of service.
  • Termination by breach of contract: A party may terminate a contract of employment in some circumstances if the other party breaches the contract of employment. Not every breach of contract will justify the termination of that contract. Whether a particular breach justifies termination will depend on the nature of the breach and the particular circumstances of the case.

Redundancy

If an incorporated association in the Commonwealth industrial relations system has genuine operational reasons for terminating the employment of an employee (i.e. reasons of an economic, technological, structural or similar nature relating to the employer’s business), an employee is not able to claim for unfair dismissal.

It is advisable for employers to meet other requirements concerning notice and fairness, including procedural requirements to consult with employees and, in some circumstances, their representative.

State and Commonwealth awards and agreements will often deal with matters concerning redundancy, including issues such as consultation with the employee, notice to and consultation with unions, possible redeployment opportunities (providing the employee with another position), redundancy payments and benefits. There are provisions contained in the Western Australian Minimum Conditions of Employment Act, which generally require employers to consult with an employee as soon as reasonably practicable after a decision has been made to terminate the employee's employment due to redundancy. 

Associations should be clear that a position is no longer required before terminating employment by reason of redundancy. If an employee's employment is terminated on grounds of redundancy in circumstances where this is not a genuine reason for the termination, the association may be exposed to a claim of unfair dismissal.

Example:      

An association tells its receptionist that he has been made redundant because it no longer needs a receptionist. A week after leaving, the ex-employee notices that the Association is advertising for a 'customer service officer', whose job description is virtually identical to his receptionist's job description. Depending on the circumstances, the termination of the receptionist's employment may give rise to a claim of unfair dismissal.

Summary (instant) dismissal

Some contracts of employment make allowance for instant termination of employment (termination without notice) where an employee has been found to have engaged in serious misconduct. To justify summary dismissal, an employee's conduct generally has to be serious enough to strike at the heart of the employment relationship, such as conduct that destroys the employer-employee relationship of mutual trust and confidence.

Examples of serious misconduct that may justify summary dismissal include:

  • theft;
  • use of illicit drugs in the workplace;
  • criminal conduct, for example, assault; and
  • fraudulent conduct.

It is important that any allegation of serious misconduct is investigated thoroughly and fairly, and that any allegations are substantiated by reference to clear evidence before an association terminates an employee's employment summarily for serious misconduct.

Employees whose employment is terminated summarily will usually still be entitled to payment in relation to their outstanding annual and long service leave entitlements.

Unlawful termination

Termination of a contract of employment is unlawful if it is terminated for a prohibited reason, or if proper notice is not given. Regardless of whether they fall under the Commonwealth or State jurisdictions, associations must not breach these provisions.

Prohibited reasons include:

  • union membership, reasonable participation in union activities, or non-membership;
  • prohibited grounds of discrimination;
  • temporary absence from work because of illness or injury;
  • absence from work during maternity or parental leave; and
  • filing a complaint, or participating in proceedings against an employer.

Unfair dismissal

There are unfair dismissal laws in both the State and Commonwealth industrial relations systems. In Western Australia, the term 'unfair dismissal' refers to a termination of employment in circumstances that are ‘harsh, oppressive or unfair’. Under the Commonwealth law, an unfair dismissal occurs when an employee’s termination is ‘harsh, unjust or unreasonable’.

Under both systems, the focus is on both the substantive 'fairness' of the decision to terminate the employment, and the process by which the decision to terminate employment was reached and communicated to the employee (procedural fairness).

Key elements of procedural fairness include:

  • notifying the employee of reasons for termination of employment;
  • giving the employee an opportunity to respond before any final decision is made;
  • if employment is to be terminated for reasons, such as repeated misconduct or poor performance, advising the employee of the issues and giving the employee an opportunity to improve prior to termination (eg. by way of warnings, counselling).

Employees are generally entitled to be told if their work performance is not satisfactory, given a chance to implement change and be warned if their performance is still unsatisfactory.

When discussing performance issues with an employee, it is important that each party is clear on:

  • the status of the discussions;
  • the mutual expectations of each party; and
  • agreed outcomes and consequences of the discussion.

Written records of discussions that are clear and simple and signed by both parties act as ongoing documentation of the process for both the employer and employee. It is essential for employers to keep well-documented and up-to-date records that may later be used to support decisions about an employee's ongoing employment.

Certain employees are excluded from access to unfair dismissal legislation.

For information regarding exclusions under the national workplace relations system associations should contact the Fair Work Commission, or call on 1300 799 675.

Under the Western Australian system, a non-award employee whose contract of employment provides for a salary exceeding $153,900 per annum is excluded from bringing an application of unfair dismissal.

This figure is subject to change annually, so check the website for the current prescribed amount.

Exit interviews

An exiting employee has valuable knowledge on the role in which they have been employed. Exit interviews invite the employee to provide information and feedback about:

  • their role within the organisation;
  • the resources required to adequately fulfil the role;
  • issues the organisation should be aware of as an employer; and

arrangements that have been made for existing workloads and changeover or transition periods.

Other employer obligations

Superannuation

The Commonwealth’s superannuation guarantee scheme generally requires all employers to make superannuation contributions on behalf of their employees.  There are limited exemptions for certain employees.

The required minimum level of employer contribution is 9.5% of an employee's notional earnings base.

Under both Commonwealth and State industrial relations systems, employees may (depending on the terms of an applicable award) have the right to nominate their preferred superannuation fund and if so, employers must notify employees of their right to choose. If an employee does not provide written details of their preferred fund, the employer can use a fund of its choice until such time that the employee requests a change.

Workers' compensation

Regardless of which industrial relations system applies to their operation, all incorporated associations that employ staff should arrange appropriate workers’ compensation insurance.

For more information on worker’s compensation insurance, refer to Insurance and Risk Management and/or Occupational Safety and Health and Workers’ Compensation. An employee’s legal entitlement to compensation for injury in a workplace cannot be nullified through any employment contract or individual agreement.

Records

Under both Commonwealth and State industrial relations systems, employers are required to keep time and wage records for each employee. The records must accurately document the employee’s wages and entitlements. Penalties apply if these records are not kept.

The specifics of employee record keeping will vary depending on the relevant industrial system, award, agreement, industry standard, or the association’s policy. However, as a general guide, there should be a separate record for each employee detailing basic personal information that includes, where applicable:

  • the name of the relevant award or agreement regulating the employee's employment;
  • the classification of the employee under the award or agreement;
  • whether the employee works full-time or part-time, or is employed on a casual basis;
  • the date the employee began work;
  • hours worked, including breaks;
  • leave entitlements taken and due;
  • remuneration; and
  • overtime, flexitime or time-in-lieu.

Employees (and, in some cases, their representatives) are generally entitled to access and inspect their records.

Employment of children

In Western Australia, children under 15 years of age (including the year in which the child turns 15) cannot generally be employed during school hours.

Children under 12 years of age cannot generally engage in street trading. Children between the ages of 12 and 15 cannot engage in street trading during school hours or before 6am or after 9.30pm. Street trading includes any form of selling or offering an item or service in a public place.

Where the welfare of a child is at risk, the Director General of Education can impose conditions or prohibit employment.