Q&A: Employee types for WA employees

Employees vs Contractors

An employee works in another person’s business, are paid for the hours they work, and generally do not have a lot of control over how they do their work and when they can work. In contrast, a contractor runs their own business, they will generally have their own ABN and send invoices to the person who has contracted them.

A contractor will be paid per job or task and will usually have a lot of control over how they perform the work, when they work and are generally required to bring their own tools. Employees have more rights under employment law than contractors.

Sometimes, an employer will try to classify a worker as a contractor, when they should actually be an employee – to avoid their rights and obligations under employment laws.

For more information, see our dedicated publication Q&A: Contractor or employee for WA Workers.

Gig-economy Workers

Gig-economy workers generally use an app or website to connect and perform services for users. One common example of gig-economy workers is ride share app drivers (e.g Uber drivers).

Most gig-economy workers are likely to fall under the definition of “employee-like” workers under the Fair Work Act. Employee-like workers are separate to employees, and do not have the same rights as employees. However, there are some new protections for employee like workers, which are explained further on the Fair Work Ombudsman’s website.

Employees vs Unpaid Workers

Unpaid work can be legal. For example, volunteer work which is performed for a charity or not-for-profit is lawful if it is genuine, and not being used to exploit workers.

Unpaid trials can be lawful if they for a short period of time (usually a day or less) and are necessary to determine a potential employee’s skills or knowledge.

Most employment laws do not apply to unpaid workers. However, there are some protections, like work health and safety laws and sexual harassment/discrimination protections that can still apply.

In addition, there are situations where an unpaid worker is called a volunteer, but is actually carrying out the work of an employee and may have an employment contract. Generally, to be an employee, there should be:

• an offer to enter into a working relationship;
• an intention to create legally binding relations;
• a commitment to perform work for the benefit of the business or organisation;
• something given to the person doing the work in exchange for their efforts (e.g money); and
• clarity and certainty in the terms of the agreement and no illegal activity that would prevent the arrangement from having legal effect.

If you are an unpaid worker but are unsure whether you should actually be an employee, you can contact us to make a request for legal advice here:  https://circlegreen.org.au/get-help/

A permanent employee is an employee who works regular hours and has a reasonable expectation of ongoing employment This has been called a ‘firm advance commitment to continuing and indefinite work’. This means that you can expect to keep your job, and to work the same hours, unless there is some sort of significant change like a demotion or redundancy.

Permanent employees can be either full-time or part-time. If a permanent employee is part-time, there is usually a regularity or “pattern” to the hours that are worked.

Permanent employees receive paid annual (holiday) leave and paid personal leave (which includes sick leave) and a number of other entitlements (see below).

A casual employee is an employee who works on a temporary, irregular or uncertain basis – they do not have a firm advance commitment to continuing and indefinite work. Casuals often don’t have set hours and work to a roster that changes frequently.

Businesses generally hire casuals to work flexibly. Casuals might get more shifts when it’s busy and less shifts when it’s quiet. Casuals may work regular hours but generally this would only be temporary – for example during a busy “season” for a particular job or industry.

A casual employee does not receive paid personal/carer’s leave or annual leave and receives a casual loading on their base rate of pay to compensate for this. A casual loading is an additional amount (between 20% and 25%) that gets added to your wage.

For more information on employee minimum conditions see our publication: Q&A: Minimum conditions of employment for WA employees.

You will likely be a permanent full-time employee if you usually work at least 38 hours per week.

You will likely be a permanent part-time employee if you work regular and ongoing hours, but less than 38 hours per week.

Part-time employees have access to the same entitlements as a full-time permanent employee, but on a pro-rata basis according to the hours worked. For example, an employee who works 19 hours per week accrues half the entitlements of a 38 hour per week full-time employee.

It is important that you know whether you are a causal or permanent employee as this will impact what employee entitlements you may have and can impact the claims and options available to you as an employee.

Employment law is complex, and every employment relationship is different. Rules and entitlements come from minimum conditions, industrial awards and agreements, contracts of employment and other sources.

Minimum conditions are a basic safety net of rights that apply, regardless of what it says in your contract, award or industrial agreement. However, sometimes there are rules around how or when these entitlements apply and the information below is a simplified summary.

Permanent employees

A permanent employee is entitled to the following minimum entitlements:

• paid annual leave;
• paid personal/carer’s leave;
• paid compassionate leave;
• paid long service leave;
• unpaid parental leave;
• unpaid family and domestic violence leave;
• unpaid community service leave;
• notice of termination (unless they are terminated summarily/”on the spot” for serious misconduct);
• redundancy pay (in certain circumstances);

Casuals

Casual employees are entitled to the following minimum entitlements:

• a casual loading to compensate them for the lack of entitlements compared to permanent employees (20% for state system employees and 25% for national system employees)
• unpaid parental leave in certain circumstances;
• unpaid family and domestic violence leave;
• unpaid carer’s leave;
• unpaid bereavement or compassionate leave;
• a reasonable period of unpaid leave for a voluntary emergency management activity; and
• long service leave

Casual employees are not entitled to:

• paid annual leave;
• paid personal/carer’s (sick) leave (unless expressly included by the relevant award or agreement);
• notice of termination; or
• redundancy pay.

For more information on these entitlements, and other rights and entitlements, see our resources page: https://circlegreen.org.au/resources/workplace/

Usually, whether you are a casual employee or not will be communicated to you either in a:

• written contract;
• conversation at the beginning of your employment; or
• in some other way (such as via email or text).

Sometimes even if your employer has told you that you are a casual, this may not actually be the case – because whether you are a casual or not can depend on how your employer treats you and what your working relationship is like day to day.

You may be a casual employee if:

• your employer chooses to offer or not offer work to you;
• you can accept or reject work;
• your work hours depend on the needs of your employer;
• there is no guarantee of ongoing work;
• you are entitled to a casual loading or a special casual rate; and
• You have an irregular pattern of work.

Note the above points aren’t requirements to be a casual employee, but they are important factors that indicate you may be a casual.

There are casuals that get regular work – they are generally known as regular casuals.

The information above sets out the general rules, but the rules apply a bit differently depending on whether you are a national system employee or a state system employee.

As a general rule, national system employees who commenced work after 26 August 2024 are likely to be defined based on the day to day relationship.

State system employees and national system employees who commenced work before 26 August 2024 are likely to be defined based on the agreement made at the start of the relationship (for example, what it says in a written contract). However, this area of law is complex and if you are unsure how to determine if you are casual or permanent you may wish to seek legal advice.

If you are unsure whether you are a national system employee or a state system employee, see our publication: “Q&A: State or national for WA employees”.

If you are a national system employee, the test will be applied to the contract that was made when you started working.

If you are a state system employee, there may be more consideration paid to your working arrangements, if different to your contract. However, your contract will still be important to the test.

If you are a national system employee, you may be able to request to become permanent if you fulfil certain criteria.

State system employees are free to negotiate a permanent position with their employer, but generally do not have a right to request a change to permanent employment unless there is a special rule in an applicable award, agreement, or employment contract.

National system casual employees

Employees who start employment on or after 26 August 2024

You can notify your employer you intend on becoming permanent if:

• you have been employed for a minimum of 6 months (if you work for an employer with 15 or more employees) or 12 months (if you work for an employer with less than 15 employees); and
• you believe that you are not a casual employee (e.g you have an expectation that you will be getting ongoing, indefinite work).

You must provide the notification in writing – usually this will look like an explanation as to why you no longer fit the definition of casual employee.

You are unable to notify your employer of an intention to become permanent if in the last 6 months, your employer had already rejected your notification or come to a resolution about casual conversion.

Once the employer receives a notification, they must talk to the employee about what will change if the employee becomes permanent. The employer has 21 days to respond to the notification, they can either refuse or accept the notification – and they must communicate the response in writing.

An employer can refuse a notification if:

• The employee still fits the definition of casual; or
• There are reasonable business grounds for rejecting the notification.

Reasonable business grounds to reject a notification may include:

• substantial changes to the organisation of a business, or conditions of the employee; and
• significant impacts on the business.

If you and your employer are having a dispute about your casual conversation, you and your employer can refer the dispute to the Fair Work Commission.

Employees who started employment before 26 August 2024

These employees still have an entitlement to access casual conversion under the old pathway for a limited time. If your employer has 15 or more employees, you can access the old casual conversion pathway until 26 February 2024. If your employer has less than 15 employees, you can access the old casual conversion pathway until 26 August 2025.

For more information on the old pathway to casual conversion pathway, please see the Fair Work Ombudsman’s website here.

You can be employed for a specific term with a start and end date. Generally, this can be on either a fixed term or maximum term contract.  The main difference is that maximum term employees will have a clause in their employment contract that allows the contract to be terminated with notice before the contract end date.

If you are a true fixed term employee, your employment cannot be terminated by you or the employer before the contract end date, except in limited circumstances such as serious misconduct or some other serious breach of the contract.

If a fixed term contract is terminated early, the party terminating the contract may have to pay compensation to the other party.

If you are a maximum term employee, you or your employer can terminate the contract before the end date by providing notice of termination under the contract.

Whether you are a fixed term or maximum term employee can affect whether you may be able to make an unfair dismissal claim if your employment is terminated. It may also affect your entitlement to redundancy pay.

For more information see our publication Q&A: Dismissal for WA employees.

If you are in the national system, there are some restrictions for fixed term contracts.

From 6 December 2023 onwards, there are some restrictions for national system employees on fixed term contracts including:

• the duration of a fixed term contract generally cannot exceed 2 years;
• a fixed term contract cannot be renewed for a period exceeding 2 years or more than once; and
• there are further limitations on offering someone a second fixed term contract.

If the fixed term contract is in breach of these restrictions, then end date on the contract will no longer apply. Meaning that employment will no longer come to an end on the specified end date in the contract.

There are exceptions to these fixed term contract rules for certain employees, including:

• employees with specific skills required for a specific task;
• apprentices and trainees;
• employees in positions subject to government funding;
• employees hired for temporary positions (e.g maternity leave cover);
• high income employees;
• contracts for governance positions; and
• essential workers during a peak demand season (e.g beach lifesavers over the summer).

Casual employees can generally be hired on fixed term contracts. However, most University or other Higher Education teaching staff are prevented from being put on casual fixed term contract.

If you have a dispute about a fixed term contract, you should first try to resolve it with your employer. If you are not able to resolve the dispute internally, then you make an application to the Fair Work Commission to decide a dispute on fixed term contracts.

You may be a labour hire employee if you are employed by a labour hire agency and perform work at a different host business or are contracted to another business.

The labour hire agency has a commercial contract with the host business for the supply of labour and the host business pays the labor hire agency for the labour. The labour hire agency pays you your wages. If you are a labour hire employee, you will have an employment contract or employment relationship with the labour hire agency, but not the host business.

It is important to know whether you are employed by a labour hire agency as it can impact on legal claims you may be able to make including if you are removed from the host business.

Apprentices and trainees are employees, but also have a training contract that operates alongside the employment contract.

An apprentice or trainee should have a training contract registered with the Apprenticeship Office. If there is no registered training contract, then you are a regular employee under the law.

Generally, if you are an apprentice or trainee you can expect to have the entitlements and protections of an employee, however there are some differences under the laws including the following:

• apprentices and trainees are paid different rates to regular employees. These rates are normally set out in the industrial award that covers the work you are doing. These rates may be less than that of other workers, to reflect the fact that you are receiving a benefit and a qualification from the training your employer is providing you.
• apprentices and trainees that are hired for the duration of the training contract don’t normally have unfair dismissal rights if they complete the training contract. In the state system, apprentices and trainees may not be able to make an unfair dismissal claim at all and are expected to dispute an early termination of the training contract under training laws.
• apprentices and trainees are normally required to be released by their employer to attend off-the-job training (for example at TAFE).
• some industrial awards require employer to reimburse apprentices for their training fees if they complete their off-the-job training satisfactorily. To find out which award covers you and what it says about training fees, call Wageline if you are a state system employee and the Fair Work Infoline if you are a national system employee.
• employers of apprentices and trainees must follow rules under training laws if they want to terminate the training contract outside of its probationary period. In most circumstances, an employer will need the agreement of either the apprentice/trainee, or the Apprenticeship Office.

If you have been dismissed and you are being asked to sign paperwork, you may wish to seek legal advice first. If you sign a “mutual consent” form to end the training contract, you may be agreeing to the dismissal from a legal point of view, which may restrict your rights to make an unfair dismissal claim or another type of claim.

Q&A: State or national system for WA employees

Q&A: Minimum conditions of employment for WA employees

Fair Work Commission

Western Australian Industrial Relations Commission

Equal Opportunity Commission

Australian Human Rights Commission