The Commonwealth's industrial powers are derived from Section 51(xx) of the Constitution, which is now the key power regulating employment law. There are three tiers of employment regulation: federal legislation, state legislation, and common law. An employment relationship is defined as either an employer-employee relationship based on a contract of service, or a principal-independent contractor relationship based on a contract for services. The multi-factor test is used to determine the type of relationship. Employers have duties to employees including paying wages, providing work, and ensuring safety. Employees have duties during and after employment. Termination of employment can occur through various means and may result in claims of unfair or unlawful dismissal. Workplace health and safety is regulated through

1. 2105AFE
Introduction to
Business Law
Lecture 11
Employment Law
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2. The Commonwealth’s Industrial Powers
- Constitution
 The Commonwealth’s industrial powers are derived from Section
51(xx) of the Constitution – the Corporations Power. It is now the
key power that regulates employment law.
 Where Federal and State legislation clash, Commonwealth law will
prevail to the extent of any inconsistency – Section 109
Constitution.
See NSW v Commonwealth [2006] (Text 792)
Facts: In NSW the state governments argued that Parliament’s
constitutional power to make laws with respect to foreign, trading
financial corporations (s51xx) was limited to the external relationships
of such corporations, The states argued that external relationships
b/w a corporation and its actual or prospective employees.
Held: The states argument was rejected the HCA upheld the Cth.s
reliance on the corporations power
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3. Employment Law
 In Australia there are essentially three tiers
(levels) of regulation of employment:
1. Federal legislation – Fair Work Act 2009 (Cth)
2. State legislation – Industrial Relations Act 1999
(Qld)
3. The common law
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4. Employment Relationship
 Defining an employment relationship: there are two
types of employment relationships with the legal
consequences between the two differing:
1. Employer – Employee:
 Relationship of employer/employee is based on a contract
of service. Whereby a person agrees to work under the
control and supervision of someone else.
2. Principal - Independent Contractor:
 An independent contractor works under a contract for
services, i.e. agrees to produce an end result.
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5. Determining the Employment
Relationship
 The HCA has indicated that apart from issue of
‘control’ the ‘economic’ relationship’ between the
parties is also significant.
 Indicators of the type of relationship are included
in the Multi-factor (facet) Test:
 Control remains the key element, although the court will now look
at other factors.
 Stevens v Brodribb (1986)
 Hollis v Vabu P/L (2001)
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6. 6
Vicarious liability - Control Test
Hollis v Vabu Pty Ltd [2001] HCA 44
FACTS: H had been hit by a bicycle courier, the
courier worked for V and wore a distinctive
‘Crisis Courier’ uniforms. Hollis sued V as the employer of the courier.
The key issue was whether the bicycle courier was an employee or an
independent contractor for purposes of vicarious liability.
i.e V would only be liable if the courier was an employee and not if he
was an independent contractor.
HELD: HCA decided that as V was in ‘control’ of the couriers activities
the courier was an employee. H’s claim succeeded.

7. Determining the Employment
Relationship - Distinction
 The main reasons for distinguishing the employment
relationship as either a contract ‘of service’ (employee)
or ‘for services’ (independent contractor) are:
 Workers’ compensation
 Vicarious liability of employer – Tort & Contract
 Tax
 Establishing the relevant industrial
award/agreement
 Statutory entitlements
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8. Duty and Liability of the Employer
 Duties of an Employer - Vicarious Liability:
 An employer may be liable for an employee’s actions even though the employer may have done nothing
wrong.
 It applies as long as the employee’s action is ‘within the scope of the employment’.
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9. Duties and Liabilities of the Employer
There are three main duties for an Employer:
1. Pay the agreed remuneration:
 Casual Contracts: there is no entitlement to
payment in the absence of performance of
duties
 Continuing Contracts: with a fixed
remuneration are entitled to be paid irrespective
of whether or not they have performed their
duties
2. Provide Work
 Only if the continuing contract involves
commission, the exercise of a skill or talent, or
remuneration is linked to performance
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10. Duties and Liabilities of the
Employer
3. Take reasonable care to ensure safety of employees
 Employ competent staff and provide adequate supervision
 Provide safe plant and appliances
 Provide a safe system of conducting work
 The employer’s duty to take reasonable care to ensure the safety
of employees have been given statutory support by the
Occupational Health and Safety Acts of the various Australian
jurisdictions
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11. Duty of the Employee
The major duties and responsibilities of the employee
can be divided up into two categories:
Obligations during employment:
 To obey the employer’s lawful, reasonable and safe
commands
 Ottoman Bank v Chakarian (1930)
 Disclosure of information relevant to the employer
 To hand over inventions made during the course of
employment
 To account for all money or property received in the
course of employment
 Maintenance of confidentiality
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12. Duty of the Employee
 Obligations during employment
A duty to work in a skilful and competent
manner, and to exercise reasonable care
Lister v Romford Ice and Cold Storage Co Ltd (1957)
• Facts: “Lister was employed by Romford Ice as a truck driver. His father was
employed by the same co. and worked with his son. While reversing his truck into the
loading bay the son lost sight of his father, who was directing him, and accidently ran
over him. The father then brought an action against the employer and succeeded on
the basis that Romford Ice’s employee, the younger Lister, was negligent. The co. then
exercised its right of subrogation by bringing an action against the son. It stepped into
the shoes of the co. and claimed that the son had been in breach of his duty to drive
the truck carefully. As a result of his failure to exercise due care and skill, he had
caused his employer to suffer damage.
• Held: The son had been negligent in the manner in which he drove the truck. He owed
a duty of care to exercise his skills as a truck driver with due care and competence,
and he had broken his duty of care by running over his father. He was therefore in
breach of his employment contract.” (not in text).
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13. Duty of the Employee
 Obligations after employment
has ended include:
 Confidentiality in relation to confidential
information, inventions and trade secrets
 Where an employee is a trustee of an invention
made during the course of employment, the
beneficial interest in the property must be
returned to the employer
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14. Termination of Employment
 A contract of employment may be terminated by:
 Death of either party because of the personal
nature of the relationship
 Bankruptcy or dissolution
 Sale of the business:
 Those employees who stay on are employed under new contracts of service and
as a general rule accumulated entitlements carry forward
 Employees who are not re-employed only have rights against the former
employer
 Frustration
 Termination by notice
 Redundancy
 Termination without notice (Summary or Constructive dismissal)
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15. **Vote Break** **Unfair / Unlawful Dismissal
Incorrect termination of an employee can amount
to Unfair or Unlawful Dismissal under the common
law or commonwealth and state industrial relations
legislation
The legal actions for unfair/unlawful dismissal
are:
 The dismissal is ‘harsh, unjust or unreasonable’ - unfair
 The dismissal is unlawful because it was done on the basis
of a prohibited reason such as race – unlawful
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16. Making a claim for Unfair/ Unlawful Dismissal
Via Fair Work Australia
Unfair Dismissal on the basis of:
 the dismissal being Harsh, Unjust or Unreasonable
Unlawful dismissal on the basis of:-
 Temporary absence from work because of illness or injury;
 Trade union membership or non-membership;
 Whistle blowing;
 Discrimination;
 Absence from work during maternity or parental leave
Both causes of action cannot be commenced without the matter
being conciliated first and then possibly arbitrated by the Tribunal or
the Court
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17. Fair Work Act 2009 (Cth)
Unfair Dismissal (Termination)
• A claim for Unfair Dismissal is made pursuant to the FWA.
I.e. - the dismissal was harsh, unjust or unreasonable.
• Industrial tribunals must take into account:
• Number of employees working in the business
• Whether employee was still working under a qualifying period
• Any valid reason such as the ability or conduct of the employee or
workplace operational requirements
• Any notification of reason given to the employee
• Any opportunity given to the employee to respond to the employer’s
stated reasons for the dismissal
• Any warning given about unsatisfactory work performance
• The operational requirements of the business.
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18. Other Issues: Commission (Tribunal) must
take into account for Unfair Dismissals.
The employer will be excluded from unfair dismissal claims
as follows:
• Qualifying period –
• If the employee has less than 12 months service and if the employer
has less than 15 fulltime equivalent employees.
• If employee has served less than 6 months and the employer has more
than 15 fulltime equivalent employees
• Employee earns over income threshold
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19. Fair Work Act 2009 (Cth)
Unlawful Dismissal (Termination)
Discrimination
• An employer must not terminate an employee’s employment for any
one or more of the following reasons, or for reasons including any one
or more of the following reasons: on the basis of:- s659
(a) temporary absence from work because of illness or injury within the
meaning of the regulations;
(b) trade union membership or participation in trade union activities
outside working hours or, with the employer’s consent, during
working hours;
(c) non-membership of a trade union;
(d) seeking office as, or acting or having acted in the capacity of, a
representative of employees;
(e) the filing of a complaint, or the participation in proceedings,
against an employer involving alleged violation of laws or regulations
or recourse to competent administrative authorities;
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20. Fair Work Act 2009 (Cth)
UNLAWFUL TERMINATION
(Discriminatory Reasons)
(f)race, colour, sex, sexual preference, age, physical or mental disability, marital
status, family responsibilities, pregnancy, religion, political opinion, national
extraction or social origin;
(g)refusing to negotiate in connection with, make, sign, extend, vary or terminate an
ITEA;
(h)absence from work during maternity leave or other parental leave;
(i)temporary absence from work because of the carrying out of a voluntary emergency
management activity, where the absence is reasonable having regard to all the
circumstances.
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21. Remedies for Unfair or Unlawful
Dismissal (Termination)
If the employer is found to be at fault, a court
or tribunal may order the employer to:
 Re-employ or reinstate the employee to their original
position or an alternate position
 Order compensation if re-employment is not a viable
option
 Pay a penalty
Employee must mitigate their losses
Tribunal must take into consideration the
effect of an order on the business
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22. Other Statutory Rights and Obligations
• National Employment Standards
• 1. Maximum weekly hours
• 2. Requests for flexible working arrangements
• 3. Parental leave and related entitlements
• 4. Annual leave
• 5. Personal/carer’s leave and compassionate leave
• 6. Community service leave
• 7. Long service leave
• 8. Public holidays
• 9. Notice of termination and redundancy pay
• 10. Fair Work Information Statement
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23. Workplace Health & Safety
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24. Workplace Health & Safety
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25. Occupational Health and Safety
Legislation
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26. Workplace Health and Safety Act
2011 (Qld)
 WHSA Imposes obligations on
persons who can influence
workplace health & safety.
•Breaches of obligations are
punishable by $ penalties - custodial sentences are rare
•WHS Act also provides defences for breaches
 The main object of the WHS Act is to prevent or minimise
a person’s exposure to injury or illness at work.
 The broad objective of WHS Act is the PREVENTION of,
(not compensation), illness and injury in the workplace.
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27. Who is covered by the WHS Act? – s23
 persons who conduct a business or undertaking,
whether as employers, self-employed persons or
otherwise
 principal contractors
 designers, manufacturers and suppliers of plant
 erectors and installers of plant
 owners of plant
 manufacturers and suppliers of substances
 designers of structures to be used as workplaces
 persons in control of fixtures, fittings or plant included
in relevant workplace areas
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28. WHS obligations – ss28,29,30WHSA
 Persons in control of workplaces/conduct a business
must ensure:
 health & safety of each person
 that risk of injury or illness is minimised for people coming to &
from work
 there is safe access to and from the workplace for everyone
 Workers must follow instructions given by an
employer
 Workers must use personal protective equipment (if
provided must be trained in its use)
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29. Codes of practice & Inspectors
http://www.dir.qld.gov.au/workplace/law/legislation/codes/
State ways to manage
exposure to risks
 If a code of practice exists for
a risk at your workplace, you must:
 do what the code says; or
 adopt another way that manages exposure to risk;
 And take reasonable precautions and exercise due care
 An inspector may visit a workplace to:
 check the effectiveness of health & safety management programs;
 register high risk plant;
 investigate serious accidents or complaints; and
 provide advice on managing health & safety risks.
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30. Penalties for breaching WHS obligation
http://www.dir.qld.gov.au/workplace/law/penalties/maximum/
Penalties are substantial:
• Individual - ranging from $37,500
or 6 months imprisonment to a
maximum penalty for a breach
causing death or grievous bodily
harm of $75,000 or 2 years
imprisonment.
• Corporation - $187,500 to
$375,000 - If there are multiple
deaths, maximum penalty
increases to $150,000 or 3 years
imprisonment for an individual
and $750,000 for a corporation.
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31. Workplace Consultation, Records
and Reporting
• WHS representatives are ELECTED by fellow workers – do not need
experience or special qualifications, but entitled to paid training if requested.
• WHS committee may be formed by employer if WHS rep requests it -
cooperation between employers and workers.
• WHS OFFICERS are APPOINTED if 30 or more persons at the workplace.
• Employers and principal contractors must make a RECORD of every
workplace incident.
• REPORT must be sent to WHS Queensland where there is:
 workplace incident that involves a serious bodily injury
 work-caused illness
 dangerous event
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32. Workers’ Compensation Legislation
• Workers’ compensation legislation is a no-fault scheme
meaning that it is irrelevant whether the injury was the fault
of the employee
 Under the Workers Compensation and Rehabilitation
Act (Qld) 2003 - an employee injured (injury includes
disease) in the course of employment is entitled to
compensation and rehabilitation, however:
 The employee must be able to show a connection between the
employment and the injury
 Acts outside the course of the employment, e.g. a deviation from the
usual path of travel, are generally not recoverable
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