Getting it right: Types of employment and contracts

Getting it right: Types of employment and contracts

Engaging new staff and not sure if they should be permanent or casual? AMA (NSW)’s Felicity Buckley discusses the differences and offers some top tips. 

Employing staff is a necessary part of running a medical practice, although that doesn’t make the task any less challenging. 

It is important to understand the different types of employment before you start recruiting so you make the best decision about the role and what you require. Choosing the correct type of employment should be based on your business needs and will set up appropriate expectations of your new employee.

Permanent: Full-time & Part-time

There are two types of permanent employment, the first is full-time, which means the employee works 38 hours a week, the other is part-time, and the employee is contracted to work anything less than 38 hours a week. Permanent full-time and permanent part-time employees are entitled to paid annual leave, paid personal leave (sick and carer’s), and usually have to give, or be given, written notice of between one and five weeks when their employment is ending. They work regular days and hours each week, and this can usually only be changed in advance by agreement and recorded in writing. When a public holiday falls on an employee’s normal working day, they still need to be paid for that day.

Casual

The key component of a casual employment contract is that the offer is made and accepted on the basis that there is no firm advance commitment of ongoing employment and no agreed pattern of work. Each individual shift is based on the practice requiring staffing for those hours, for example, if there is a public holiday and the practice is closed, the casual employee is not engaged for that day. The employer offers the shift to the employee and the employee is free to accept or reject it. It is important to make it clear in the employment contract that the position is “casual” and that the employee will be receiving 25% loading on top of the minimum rate of pay for their classification, to compensate for the casual nature of the role. Casual employees do not receive paid annual leave or paid personal leave (sick and carer’s). If the casual employee isn’t working, then they don’t get paid.

Employment Contracts

There is no legal obligation to provide new staff with a written contract of employment. Nonetheless, we recommend that you have written contracts in place, signed by both parties, before any new staff commence work in your practice. A written employment contract will first and foremost set out the terms and conditions of employment, such as the type of employment, hours of work, rate of pay, and the applicable Modern Award. Having one in place before an employee starts work is a great way to avoid confusion and minimise potential future disagreements.

Top Tips

1. Make sure the employment contract is signed.

Make sure your employee returns a signed copy of the employment contract before they commence work with you, and that you keep the copy in their secure employment file for future reference.

2. Casual employment should not be used as a form of trial period.

It is common for employers to fall into the trap of hiring ‘casual’ employees as a form of trial period, under the belief that it is less risky if things don’t work out. 

Without a doubt, the casual employment model does have a lot to offer in the right circumstances. However, it comes at a financial cost to the business, and doesn’t give either party the guarantee of ongoing staffing or employment. It can be difficult to convince an employee to transfer over to a permanent position if you decide you would like to retain them long term, as they usually need to take a 25% pay cut and let go of their flexibility.

3. Variations to the contract must be agreed and should be in writing.

It is important to remember that neither party, employer or employee, can unilaterally change the terms and conditions of an employment contract. The terms and conditions of the contract may be varied only by agreement with both parties. Employers have an obligation under the relevant Modern Award to consult with their employees before making any major workplace changes, as well as changes to rosters and working hours. 

4. Regularly review your employment contracts.

A good time to do this is in July, when the Fair Work commission hands down its annual minimum award wage increase. Look closely at your pay rates to make sure you are still meeting the minimum award rate, as well as your employees’ classifications and any other clauses that may need updating.

AMA (NSW) provides template contracts of employment for members, which can be accessed by logging onto the AMA (NSW) website. If you need any assistance with the template contracts, including tailoring of contracts to your business, members can contact the Workplace Relations team at workplace@amansw.com.au or
on (02) 9439 8822.