5 things to consider when hiring a new employee

Hiring employees is an important part of growing your business, bringing new skills and perspectives into the workplace. However the hiring process can be overwhelming.  Ensuring that you have started the employment relationship with thorough and accurate knowledge of your responsibilities, and having all the correct documentation in place, can be daunting.  As part of our Bailiwick Workplace employers’ series, we will talk you through some of the legal obligations that you should know when engaging your new employee.Hiring employees, your legal and recording obligations – what you need to know to protect your business.

1.  Your legal obligations

Do you know where your legal obligations stem from? Is the employment relationship covered by the Fair Work Act or state legislation?  Will your employee be covered by an award or enterprise agreement?  It is crucial that you know what your employment obligations are and where these arise from, and ensure that you are up to date with any recent changes.

For further information about some of last year’s changes within the Fair Work System, see our article Employers ! – Do recent changes to employee entitlements affect you?

2.  Permanent, casual or contractor

In deciding to take on an employee, you will have considered the capacity in which to engage them: full time or part time, permanent, casual or fixed term or for a specified task.

However, just because an employee is called a ‘casual’, even in a written employment contract, this is not conclusive of their status.  There are a number of legal authorities which state that even though in the contract of employment the employee was described as a ‘casual’, and paid as such, the employee was entitled to the benefits of a permanent employee.

Similarly, with contractors there can often be a fine line as to whether they are contractor or employee.  Again, a written contract may not be definitive of the status of a contractor (versus an employee). The ATO has a useful video guide to help you make this distinction: https://www.ato.gov.au/Calculators-and-tools/Employee-or-contractor/.

If classified incorrectly unpaid entitlements may become payable.  As every case is different, employers that are unsure should always seek legal advice.

3.  Paperwork

Do you have the necessary paperwork in place?  Has this been provided to your employee, and signed and returned?

As well as your employee’s taxation and bank details, it is important to consider what other paperwork should be prepared.

An employment contract can be important in mitigating your risk as an employer and ensuring both parties are clear on the terms of employment, an issue we will cover in more detail in a later article.

Other documents that you should consider include: an induction manual, workplace policies and procedures, a copy of the fair work statement (if applicable), and a copy of any applicable award or agreement.  Have you taken copies of identification, qualification certificates, driver’s license and visa details (if relevant)?

Please note that as of 1 July 2019, unless an exemption applies, all employers are required to have joined the Single Touch Payroll scheme.  For more information see: https://www.ato.gov.au/Business/Single-Touch-Payroll/

4.  Training

With greater focus than ever on workplace safety, and recent increases in fines, it is essential that every employer considers their workplace safety and health obligation for every new (as well as existing) employee.

This includes the requirement to train employees appropriately.  Section 19 of the Occupational Safety and Health Act 1984 (WA) (OS&H Act) states:

“(1) An employer shall, so far as is practicable, provide and maintain a working environment in which the employees of the employer (the employees) are not exposed to hazards and in particular, but without limiting the generality of the foregoing, an employer shall —

(b) provide such information, instruction, and training to, and supervision of, the employees as is necessary to enable them to perform their work in such a manner that they are not exposed to hazards;

In circumstances where an employer is grossly negligent in breaching this requirement, the OS&H Act provides for fines of up to $550,00.00 for an individual, as well as 5 years imprisonment, and $2,700,000.00 for a body corporate (increased last year from $500,000.00 for body corporates).

Please note that there will be further significant developments in this area if the Western Australian Model Work Health and Safety Bill (WHS Bill) is passed in parliament this year.

Employees should receive ongoing information about health and safety matters affecting their work.  Some things for employers to think about when bringing on a new employee are:

We recommend regular training needs analysis with each employee, which should include consultation with the employee about their training needs.  It is important to document all training and meetings, and to retain this documentation to protect your business.

5.  The end of the relationship

Although you have just taken on a new employee, it is important to think about what happens at the other end.

You would require a crystal ball to see when and under what circumstances the employment relationship will end, however, from a risk management perspective, it is important to consider the following matters at the beginning of the relationship:

These are matters that can be dealt with in a written contract, and if handled correctly, may save a lot of pain (and money arguing the point) at a later date.

There are many resources available to assist you when taking on a new employee, and we will be happy to have a conversation with you if you have any questions.

TIP:  The Australian Government’s ‘Business’ website provides a helpful checklist to assist small businesses to learn about their employee obligations: https://www.business.gov.au/people/hiring/taking-on-an-employee-checklist

If you would like further information in relation to how the above matters may affect your business, please contact us on (08) 9321 5451 or by email at kim@bailiwicklegal.com.au.

Please also subscribe to our newsletter to be alerted to further articles in this series.  Next time we will be looking at employment contracts and what should be included.

For further information about our legal services, please visit our website: https://www.bailiwicklegal.com.au.

The above information is a summary and overview of the matters discussed. This publication does not constitute legal advice and you should seek legal or other professional advice before acting or relying on any of the content.

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