News & Views
Aug 23

Understanding Different Employment Relationships

The world of employment is a mix of laws and guidelines designed to look out for both employers and employees. Figuring out the right kind of work arrangement for your employees is a big deal.

Before someone starts a job, you need to decide what type of employment it will be. It could be permanent, casual, or fixed-term. This choice really matters for both sides, and if you get it wrong, there can be serious consequences.

Different Ways of Being Employed

  1. Permanent Employment: This is where the employee has an ongoing role with no set end date. Employees in permanent employment have minimum entitlements like sick leave and holidays. If an employer wants to end a permanent employee’s job, they have to follow the right steps, including correctly following any trial period provision that employee may have.
  2. Casual Work: Casual jobs are flexible. They’re for when employers need workers on an inconsistent basis. An employee might work different hours each week or not at all. Importantly, casual employees have no expectation for any future work at all. Casual employees usually don’t get things like paid annual leave, but they receive this as an additional payment on top of their wages to make up for it.
  3. Fixed-Term Employment: This is where someone works for a set time, e.g. for a specific project or until a certain date which is set out in an agreement. Fixed-term employees are good for temporary roles or when you know a job will end on a certain date i.e., cover for parental leave.

Why This Choice Matters

Picking the right kind of employment for a job isn’t just about paperwork. It sets the foundation for the employment relationship and affects what both sides are entitled to. If you don’t get it right, things can get messy.

  1. What You Get: Different types of employment mean different rights. Permanent workers, for instance, get things like paid annual leave. If you treat someone as a casual when they’re actually permanent, they can be entitled to backdated payments for leave.
  2. Legal issues: If you label a job wrong, it could lead to legal problems and penalties for a business. If you mess up, you might have to pay up or deal with legal action.
  3. Reputation Matters: Being accused of treating employees unfairly or not following the rules can give your company a bad name. This affects how people see your business and whether good workers want to stay. This is especially important when it is hard to find the right staff.

Final Thoughts
If you are thinking of hiring an employee in your business in the near future, it is important that you take employment legal advice and ensure the employee has the right type of employment agreement. Employment agreements generally need to be reviewed regularly to ensure they are still current with the ever-changing employment legislation.