Employment contracts, awards, agreements and statutory conditions: HSC Legal Studies

What this dot point is asking

This page covers the second half of the nature of workplace law in the Workplace option of the Legal Studies Stage 6 Syllabus (2009): contracts (of service, for services, express and implied terms), awards and agreements, and statutory conditions. The syllabus asks you to describe the rights and responsibilities of employers and employees in the workplace, so this page finishes with a table of them.

These are the building blocks of every Workplace answer. Before you can judge whether the law achieves justice, you need to know which instrument gives a worker a right: a contract, an award, an enterprise agreement or a statute. The history of how these instruments developed is on the nature of workplace law, and how they are made and enforced is on the industrial relations framework and negotiations.

The answer

Contracts of service and contracts for services

Why the distinction matters

Only employees get minimum wages, leave, unfair dismissal protection and most workers compensation. That gives employers an incentive to describe workers as contractors, so the law needs a test that looks past the label.

The common law test

Courts apply a multi-factor ("multi-indicia") test, weighing control, integration into the business, the ability to delegate, who supplies equipment and bears risk, and how payment is made. In Hollis v Vabu (2001), bicycle couriers who wore the company's uniform and could not build their own business were held to be employees, making the company liable for a courier who injured a pedestrian.

The 2022 High Court cases

In CFMMEU v Personnel Contracting [2022] HCA 1, Mr McCourt, a young British backpacker with no construction experience, was labelled a "self-employed contractor" by a labour hire company and sent to work as a labourer on building sites under the builder's direction. The High Court held he was the labour hire company's employee, but its reasoning was that where the relationship is wholly in a written contract, the court looks at the rights and obligations in the contract, not how the relationship worked in practice. In ZG Operations v Jamsek [2022] HCA 2, two truck drivers who had been told in the 1980s to buy their own trucks and form partnerships were held to be contractors because of the contracts their partnerships signed, even though they worked for the same company for decades.

Parliament's response

The Closing Loopholes No. 2 Act 2024 inserted s 15AA into the Fair Work Act from 26 August 2024: whether someone is an employee is decided by "the real substance, practical reality and true nature" of the relationship, considering how the contract is performed in practice, not just its terms. A contractor earning above a high income threshold can opt out in writing. This is a clear example of law reform overriding a court decision in response to changing work.

Gig workers

Platform workers (food delivery, rideshare) are usually contractors. Rather than deem them employees, Parliament let the Fair Work Commission make minimum standards orders for "employee-like" workers. The first order, for on-demand food and grocery delivery, took effect on 17 August 2026, with minimum rates of $31.30 to $32 an hour of engaged time depending on the vehicle, and accident insurance. It followed an application by the Transport Workers' Union and a joint proposal on minimum standards by the union, Uber Eats and DoorDash, an example of cooperation producing law.

Types of employee

• Full-time and part-time (permanent) employees have ongoing work, paid leave and notice rights.
• Casual employees receive a casual loading (usually 25 per cent) instead of paid leave and notice. In WorkPac v Rossato [2021] HCA 23 the High Court held that a mine worker employed on a series of casual contracts was a casual because the contracts gave no firm advance commitment to ongoing work, even though he worked regular rosters for years. From 26 August 2024, the Fair Work Act defines a casual by the practical reality of the relationship, and an employee of at least 6 months (12 months with a small business) can use the employee choice pathway to notify the employer that they want to become permanent.
• Fixed-term employees work for a set period or task. Since 6 December 2023, employers generally cannot use fixed-term contracts that run for more than two years or are renewed more than once (s 333E), unless an exception applies.
• Labour hire workers are employed by an agency and placed with a host. Since 1 November 2024 a same job, same pay order can require them to be paid at least what the host's own employees receive under an enterprise agreement.

Express and implied terms

Express terms are those the parties actually agree, in writing or orally: the job title and duties, pay, hours, location, probation, notice, confidentiality and sometimes restraints of trade (clauses stopping an employee working for a competitor after leaving). Restraints are unenforceable at common law unless reasonable; in September 2026 the federal government released draft legislation to ban non-compete clauses for workers earning below the high income threshold ($190,100), but it was not law as at September 2026.

Implied terms are added by the law even though no one wrote them down:

In Commonwealth Bank of Australia v Barker [2014] HCA 32, the High Court refused to imply a term of mutual trust and confidence into Australian employment contracts, holding that such a far-reaching term is a matter for Parliament. Mr Barker, made redundant after 27 years, therefore could not recover damages for the bank's failure to follow its own redeployment policy. The case shows the limits of the common law: statute, not contract, is where most employee protection now comes from.

Awards and agreements

Modern awards (Fair Work Act Part 2-3) are legal instruments made by the Fair Work Commission that set minimum wages and conditions for an industry or occupation, such as the General Retail Industry Award 2020 or the Nurses Award 2020. They cover classifications and minimum rates, ordinary hours and rosters, overtime and penalty rates, allowances, leave loading and consultation. The FWC varies award wages each year in the Annual Wage Review (4.75 per cent from 1 July 2026) and can vary awards for work value or gender undervaluation. Since the Protecting Penalty and Overtime Rates Act 2025, it must ensure awards do not reduce penalty or overtime rates. In May 2025, 22.7 per cent of employees were paid by award only (ABS).

Enterprise agreements (Part 2-4) are made by collective bargaining between an employer (or several employers) and employees, usually represented by a union. An agreement must be voted up by a majority of employees and approved by the FWC, which checks it passes the better off overall test (BOOT) against the relevant award and does not undercut the NES. Agreements typically give higher pay in exchange for productivity or flexibility, and have a nominal expiry date of up to four years. The Secure Jobs, Better Pay Act 2022 made bargaining across several employers easier and ended old pre-2010 "zombie" agreements on 7 December 2023. See negotiations between employers and employees.

Other arrangements. Award-free employees on individual contracts must still receive the national minimum wage ($26.44 an hour from 1 July 2026) and the NES. Individual flexibility arrangements can vary some award or agreement terms for one employee, but only if the employee is better off overall. Individual statutory agreements (AWAs) can no longer be made.

Statutory conditions

The National Employment Standards (Fair Work Act Part 2-2) apply to all national system employees and cannot be excluded by any contract, award or agreement:

Other statutory conditions:

• Minimum wages set by the FWC's Annual Wage Review.
• Superannuation guarantee of 12 per cent of ordinary time earnings (from 1 July 2025); from 1 July 2026, under Payday Super, it is 12 per cent of qualifying earnings (ordinary time earnings plus some other amounts, such as commissions), paid with wages.
• Pay secrecy is banned (s 333B, from 7 December 2022): employees can disclose and ask about pay.
• Right to disconnect (s 333M): an employee can refuse to monitor, read or respond to contact outside working hours unless the refusal is unreasonable (from 26 August 2024; small business from 26 August 2025).
• Paid parental leave from the government under the Paid Parental Leave Act 2010 (Cth): 26 weeks for children born or adopted from 1 July 2026. See leave.
• Safety and workers compensation under the Work Health and Safety Act 2011 (NSW) and Workers Compensation Act 1987 (NSW). See safety.

Rights and responsibilities of employers and employees

Evaluating the balance. The system recognises rights through several layers, so a gap in one (a bad contract) is filled by another (the NES or an award). It encourages cooperation through bargaining and consultation. But protection depends on status (employee or not), and on compliance: the Fair Work Ombudsman recovered $453 million for more than 181,000 underpaid workers in 2025-26, and in FWO v Woolworths Group [2025] FCA 1092 (5 September 2025) the Federal Court found that Woolworths and Coles could not use annual salaries to offset award overtime and penalty entitlements across pay periods, exposing large underpayments of salaried store managers. Rights on paper are only as good as the systems that enforce them; see remuneration.

In one sentence

The terms of every job come from a contract, which only makes a worker an employee if the real relationship is one of employment, plus implied duties, modern awards, enterprise agreements and statutory minimums such as the NES, which together give both employers and employees enforceable rights and responsibilities, but only to the extent they are known and enforced.

Try this

Q1. Distinguish between express and implied terms of an employment contract. (4 marks)

• What the marker wants. Definitions, two examples of each, and one case (Commonwealth Bank v Barker).

Q2. Describe the rights and responsibilities of employees in the workplace. (6 marks)

• What the marker wants. Several rights and responsibilities with their sources (common law, NES, WHS Act, anti-discrimination law).

Q3. Assess the effectiveness of the law in determining whether a worker is an employee. (8 marks)

• What the marker wants. The multi-factor test, the 2022 High Court cases, s 15AA and gig worker minimum standards, and a judgement.