Legal 101: How to protect your business from employment law roasting

The Coffee Commune

Knowing the legal ins and outs of running your cafe or coffee business doesn’t have to be confusing. As part of our ongoing commitment to strengthening our Coffee Commune community, we reached out to Hillhouse Legal Partners‘ Managing Director, Zac Herps, for his expertise on making sure that you and your employees are legally protected.

The notion of bricks and mortar businesses often go hand-in-hand with full-time, part-time and casual engagement of employees, but the ways in which the Fair Work Act and Modern Awards operate could mean that important nuances in employment terms and your obligations might be overlooked.

The most important rule of thumb is to have all agreements in writing, no matter how simple the terms might appear to be. All employers should also be familiar with employment standards ahead of signing on any new recruit.

5 steps to follow when signing on a new employee

Once you have decided to employ someone, there are some general resources and steps to become familiar with. Due diligence in the following areas will safeguard your interests:

1. Closely consider the type of employment you are hiring for (i.e. full-time, part-time, casual or contractor status) and provide employment or independent contractor agreements specific to their status.

2. Give all new employees a Fair Work Information Statement or a new Casual Employment Information Statement.

3. Ensure that the National Employment Standards (NES) in the Fair Work Act that set out minimum entitlements such as leave, weekly hours and notice, are reflected in agreements.

4. Take note of Modern Awards which prescribe certain terms and conditions in addition to the NES that might be applicable to agreements.

5. Provide clear employment / independent contractor agreements reflective of the above.

It is highly recommended that you talk with a legal partner to become familiar with the specific rules and laws concerning hiring. These might include mixed employment and contracting terms and firing, such as redundancy, resignation and dismissal. The costs to you and your business in not understanding this area of the law might see you defending an action in the Fair Work Commission and/or face compensation claims.

Types of employment

Mixed employment and contracting is an area that needs due consideration when establishing the status of new roles in your business.

In some circumstances it may be more effective for you and the other party to have an independent contractor relationship, not an employment relationship. This is a very complex area of the law and you should seek legal and accounting advice on what arrangement should be used.

When engaging independent contractors, it is considered best practice to have separate agreements: one for independent contractors, and one for employees. The separation of these agreements clearly identifies the differences in the roles, and in doing this, significantly reduces the likelihood of a contractor claiming ‘entitlements’ that should have been applied under employee agreements.

Having an insurance policy that extends beyond the primary location of your business that protects your people and assets against events that might happen while they are working remotely, is important for all parties. It is common for employers to think that independent contractors will have their own insurance, but in the event that they are not covered and injure themselves, they might seek compensation through a claim against you.

Caution must also be taken in relation to casual workers as in certain circumstances a casual employee may be entitled to some or all of the entitlements of a permanent employee. The law around casual workers also changed in March 2021, creating new rights for casuals. Keep an eye out for a further Hillhouse Legal Partners’ article on these changes, coming soon.

As with any business, there may be times when the terms of an engagement become unclear or you need advice. The team at Hillhouse Legal Partners are proud to assist members of Coffee Commune and can provide you with an obligation-free call to discuss your situation and in assessing your legal support. Get in touch with them at: [email protected] or call (07) 3220 1144.

This article was contributed by Zac Herps, Managing Director at Hillhouse Legal Partners. The information in this blog is intended only to provide a general overview and has not been prepared with a view to any particular situation or set of circumstances. It is not intended to be comprehensive nor does it constitute legal advice. While we attempt to ensure the information is current and accurate we do not guarantee its currency and accuracy. You should seek legal or other professional advice before acting or relying on any of the information in this blog as it may not be appropriate for your individual circumstances. 

The Coffee Commune