Is there an employment relationship?
There are a number of key elements to establishing if an employment relationship exists between two parties.
A contract of employment exists where an offer of employment at a given rate of pay has been accepted. The terms of a contract may be verbal, written, implied, or a combination of all three. Some types of contracts, for example for an apprentice, are required by law to be in writing.
A contract of employment will come into existence as soon as employees start work and by doing so, demonstrate that they accept the job on the terms offered by the employer.
An employment relationship, established by a contract of employment, places certain rights and obligations on employers and employees. Some of these obligations will have been expressly stated in the contract itself, either verbally or in writing, and others are legal obligations that come from legislation, awards or agreements or from common-law employment principles. For example, employers must comply with State and federal laws in relation to pay rates, working conditions, taxation, workers compensation, occupational safety and health, equal opportunity and superannuation, in addition to any agreed conditions in the contract.
If there is no employment relationship established, most of these laws will not apply. This would be the case with a volunteer, a trial worker or a subcontractor. However, as each piece of legislation provides a different definition of employees or workers, it is important that employers check which obligations they have in each particular circumstance.
Employment law also regulates the nature of pay and conditions within a contract of employment. Any condition agreed to is invalid if it conflicts with a legal requirement. In Western Australia, the Industrial Relations Act 1979 prohibits employers and employees making contracts that vary or override awards, orders or registered agreements such as enterprise bargaining agreements or employer-employee agreements. Any elements of such employment contracts would be invalid where they are inconsistent with the award, order or agreement.