Types of employment arrangements
The information on this page applies only to employers and employees in the WA state industrial relations system.The state system covers businesses which operate as sole traders, unincorporated partnerships, unincorporated trust arrangements as well as any incorporated associations or not for profit bodies that are not trading or finanical corporations. The Guide to who is in the WA State System has more detail.
This information does not apply to any business which operates as a Pty Ltd business and is a trading or finanical corporation nor to any incorporated association or not for profit body that is a trading or financial corporation. These businesses and organisations are in the national fair work system and should visit the Fair Work Ombudsman website for information on employment laws.
There are several different kinds of employment arrangements. It is important to be clear which applies so that employees receive the correct pay and entitlements.
Employee or subcontractor?
A subcontractor is not an employee, but rather a worker running their own independent business. The Employee or Subcontractor page, has information on the differences between an employee and a subcontractor including an Employee or Subcontractor Checklist which is designed to assist in understanding the key aspects of each type of working arrangement.
Full time and part time
Full time and part time employees are workers who are in “permanent” ongoing employment. They work on a regular ongoing basis every week for a set number of hours. Part time employees receive the same wages and conditions as full time employees but on a proportionate basis according to the hours they work.
A casual employee is an employee, employed on a casual basis, who works on an irregular basis with no expectation of ongoing work. Casuals are paid a casual loading of at least 20%. Some WA awards require a higher casual loading to be paid and provide penalty rates for casuals working at particular times.
Many WA awards specify a minimum number of hours in a shift a casual employee can work, as well as restrict how long an employee can be employed as a casual. Such restrictions do not apply to award free casuals. Please check any specific requirements in your award about casuals in the WA award summaries.
Casuals can be terminated by giving the notice required in relevant WA award or reasonable notice if there are no specific award requirements. Casual employees are able to make a claim of unfair dismissal with the WA Industrial Relations Commission.
Casuals do not receive paid sick or annual leave. Casual employees are entitled to bereavement leave and up to two days unpaid carer's leave for each occasion when they need to take care of a family member. Casual employees may also be entitled to long service leave in certain circumstances and parental leave if they have been employed for 12 months.
Offering casual employment may be a useful option for employers to consider for:
- busy times or peak periods that require a larger workforce
- seasonal work
- replacing other employees who are sick or on leave for short periods of time or
- where the business has variable staffing demand.
There is no type of employment which is “permanent casual”. A casual employee receiving regular ongoing work with consistent hours is often not a casual but is either a full or part time employee. Employers can potentially be liable for back pay of unpaid leave entitlements if an employee is working regular hours on a long term basis but is paid only a casual rate.
|Casual employee||Permanent employee|
|Hours may vary from week to week||Works regular hours each week/fortnight and generally the same number of hours|
|Works on an irregular basis as needed||As above|
|There is no expectation of ongoing work||Employment is ongoing|
|No consistency in start or finish times||Consistent start and finish times|
|Is free to refuse work||Regular hours are required to be worked|
|No entitlement to annual and sick leave||Entitlement to sick and annual leave|
Fixed term employees
A fixed term employee is employed for an agreed length of time or to perform a specific task under a fixed term employment contract. Fixed term employment can be offered on a full time or part time basis. The length of employment needs to be agreed to beforehand and should be formalised in writing.
Fixed term employment may be an appropriate option for replacing employees who are absent for a period of leave or for a project of a finite length.
Fixed term employees are entitled to the same leave entitlements as full time or part time employees but on a proportionate basis depending on the period of employment.
Commission and piece rate employees
Employees who work on commission receive a percentage for the sales that they make and are paid when they sell or achieve a specific target.
Piece rate employees are paid per unit of production or per task they finish – for example, for each basket of fruit picked.
Some WA awards allow employees to be paid on a commission or piece rate basis and provide pay rates and leave entitlements. Employees who are award free can be paid by commission or piece rate, and if they are paid only in this manner there is no minimum wage required and no minimum paid or unpaid leave entitlements.
A probationary period may be used at the commencement of employment to assess whether or not an employee is suitable and capable of doing the work for which they were employed.
It is important that the nature of any probationary arrangement is clearly communicated and understood by both the employer and employee.
To gain maximum benefit from a probation period, it is important that the employer and employee agree, preferably in writing, on issues such as:
- the length of the probationary period;
- how and when employee performance will be assessed; and
- the employer’s expectations and obligations.
During the probationary period, both the employer and employee have all the rights and duties normally associated with the employment relationship. Probationary employees may make a claim of unfair dismissal in the WA Industrial Relations Commission. An employer wishing to dismiss a probationary employee must have a valid and fair reason for doing so, such as:
- consistent unsatisfactory work performance
- inappropriate behaviour or actions
- serious misconduct.
An employee who is not meeting their employer’s expectations should be informed and given an opportunity to respond and improve. They should also be warned that a failure to improve may lead to termination, and if necessary, be given assistance to meet the required standard.
The employee should be advised prior to the end of the probationary period whether or not their employment will be continuing. If an employee is deemed to be unsuitable, they are still entitled to receive notice of termination and to have any entitlements owing paid out.
Please note that some WA awards contain provisions about probationary periods. It is not permissible for an employer and employee to agree to a probationary arrangement which contravenes an applicable award. For example, if the applicable award states that an employee may be engaged under probation for a period not exceeding three months, the employer and employee cannot agree to a six month period of probation.
All state system employers are legally required to keep employment records that detail time worked, leave taken and pay received by employees.
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