How Do I Know If I Am An Employee In NSW?
In order to determine your status as an employee in NSW, it is important to first look to the applicable legislation which governs the rights and obligations of employees and provides the necessary protections based on the classification that a you, may as an employee, fall under. corporate law firms sydney
The main statute that governs employment law in New South Wales is the Fair Work Act 2009 (“FW Act”).
Background
At the time of enactment of the FW Act in 2009, it had covered most employees in NSW.
In 2010 a referral of powers to the Commonwealth by all states (excluding Western Australia) came into effect. As a result in NSW alone, 500,000 more jobs from the NSW private sector moved to the national system.
The reason for this is that for over a century the states worked concurrently with the Federal Relations System. This is because the Australian Constitution gave the states the responsibility primarily for regulating their own industrial relations, while at the same time providing the Federal Parliament with restricted law making power in the same area.
The reality being that the referral of powers from the states to the Commonwealth was necessary and dealt with the increasing complexities that were arising due to the duplication of regulations. Mostly funded by the taxpayer.
NSW - who is an employee? The National System– who does it not cover?
Effective from January 1, 2010 all NSW private sector employees came under Federal Industrial Relations system governed by the FW Act.
This FW Act is not applicable to all employees of NSW and excludes government agencies as such it does not apply to public sector employees or the local government sector. A public sector employee are employees of the NSW public Service or any other NSW state service provided to the Crown.
To be an employee in NSW private sector you must therefore come under the definition and classifications of the FW Act which identifies certain employees as National System Employees. National system employees are employed by National System Employers.
Division 3, ss13-14 of the FW Act is where we find the definition for the meaning of an employee as a “national system employee” and an employer as a “national system employer”
Section 13.20
“National system employee” is defined as an employee employed or “usually employed” by a national system employer.
Section 14.20 “National system employer”
“National system employer” is defined by reference to the constitutional heads of power which support the FW Act.
A “national system employer” may be:
o a constitutional corporation;
o the Commonwealth;
o a Commonwealth authority;
o a person who in connection with constitutional trade or commerce, employs or usually employs a flight crew officer, maritime employee, or waterside worker;
o a body incorporated in a territory; or
o a person who carries on an activity in a Territory and employs or usually employs an individual in connection with the activity carried on in the territory.When is an employee not an employee?
Not all individuals performing services are considered employees.
To assess your rights under the FW Act as a worker, you must determine first whether you fall under the classification of an employee or that of a contractor.
Contractors (independent or freelancers) provide specialised services without control by the employer. Being classified as a contractor or an employee has important and significant impact in terms of the conditions of employment superannuation and IP.
The difference between employees and contractors
The test most used as the means to determine the difference between employees and contractors is based on control.The ability of the employer in directing how the work is undertaken by the worker.
If there is a significant independent nature in the manner in which the worker is running his/her own work and workflows. The worker is more than likely a contractor.
If on the other hand the worker is operating as a representative of the business of the employer and demonstrates little or none independence in the conduct of the performance of his operations he/she is most likely an employee.
There are situations that differ to this test and in particular where specialised skills are required. Workers in these situations exercise more discretion in their work and do not have much to do with the employer.
The employer is also unlikely to give specific directions or tasks concerning the way the work is done and it is the workers job to undertake his job in a skilful and professional manner.
In this latter scenario, such a person maystill be considered an employee in determining the employer’s legal obligations.
An “organisational test” is usually more appropriate In these situations, in determining whether the worker is an employee or a contractor although not used as extensively as the control test, but still remains relevant:
The person is an employee if he/she is employed as part of the business and his/her work is an integral part of it
Conversely, the person is a contractor if his/her work is not part of the business but only in addition to it.
There are also other factors that may be considered in the determination of whether a worker is an ‘employee’ or a ‘contractor’.
These include:
Employee - Receiving a periodic and consistent wage or paid or being Contractor – Paid on a per project basis
Employee –sell their labour Whether the worker sells his/her labour Contractor – seels the product of their labour·
Employee - supplied with equipment to do their job Contractor - provides their own equipment·
Employee - whether the worker is simply an individual worker Contractor – being a sole trader of part or a company·
Employee - the worker works exclusively for the employer·
Contractor- work is non-exclusive and advertises business to third parties.
No one factor is conclusive on its own and in determining your status as an employee, it is necessary to examine your entire relationship with the employer.
Volunteers
If you are a volunteer, it is very unlikely that you will have an enforceable employment contract with an organisation.
Volunteers do not fall under the classification of employees nor do they as contractors. The concept is that as a volunteer you make a gift of your work without compensation by way of pay.In this scenario you are working in a charitable context and have no intentions to enter into a legal relationship with the organisation you are offering your services to.