Types of Employment

How you are employed affects what your entitlements are at work, what responsibilities you have and even how much you can expect to be paid. The most common types of employment are listed below.

Full-time

Full-time employees have a permanent position or are on a fixed-term contract.

Full-time employment usually means working around 38 hours per week—although this can vary depending on the award or agreement that covers your workplace, or the terms of your employment contract.

As a full-time employee, you are entitled to all of the minimum conditions laid out in the National Employment Standards as well as the entitlements included in the award or agreement that covers your workplace.

Part-time

Part-time employment usually means working less than 38 hours per week.

Like working full-time, working part-time means that you have a permanent position or are on a fixed-term contract.

You are also entitled to all of the minimum conditions laid out in the National Employment Standards as well as the entitlements included in the award or enterprise agreement that covers your workplace.

You are entitled to the same amount of leave as a full-time employee, relative to the number of days you work. For example, if you work two days a week, and a full-time worker would be given four weeks off, this means that your entitlement to four weeks’ leave would equate to eight days off.

Casual

As a casual employee, your employer is not committed to providing you with regular hours or employing you for any length of time. You are also not required to work a certain amount each week.

Casual employees are entitled to the minimum conditions laid out in the National Employment Standards, or the award or enterprise agreement that covers their workplace. However, casuals are not entitled to paid leave, including on public holidays.

As a casual, you do not have to give notice if you want to resign—and your boss does not have to give you notice if they want to dismiss you—unless your award or enterprise agreement states otherwise. 

To make up for this lack of job security, casual workers are entitled to casual loading—an extra amount of pay on top of what you would make if you were a permanent employee doing the same job. Casual loading is usually an extra 25%.

If you have been working for the same employer for longer than 12 months you can request flexible working arrangements and access unpaid parental leave.

Shift work

Shift workers work in roles that need to be done outside of what are considered ordinary business hours, sometimes for longer periods of time than other types of employment —often around the clock. This means that shifts often fall at inconvenient times.

The award or enterprise agreement that covers your workplace will define exactly what counts as shift work in your workplace.

Shift workers are usually permanent employees. If you are a permanent shift worker, you are entitled to all of the minimum standards laid out in the National Employment Standards—plus those in the award or agreement that covers your workplace.

Shift workers are also entitled to an extra week of annual leave under the National Employment Standards.

Independent Contracting

Independent contractors are usually not considered to be employees and are not covered by normal employment law.

However, if you are an independent contractor, the organisation that engages with you still has a legal responsibility to provide you with a safe working environment and one that is free from discrimination.

As an independent contractor, you are also covered by laws that protect you against unfair contracting arrangements.

Some employers attempt to use independent contracting as a way to disguise what is actually an employment relationship so as to avoid employment laws. This illegal practice is known as sham contracting.

Sham Contracting

Sham contracting refers to an employer deliberately misrepresenting their employees as independent contractors. This is common practice in a number of industries, especially in the so-called gig economy.

Employers often use sham contracting as a way to avoid obligations they have to employees, such as paying minimum wages or providing entitlements like leave and superannuation.

Just because your boss made you get an ABN, doesn’t mean that you are necessarily a genuine independent contractor. Here are some key factors that suggest you may be considered to be an employee and not an independent contractor:  

• You do not have control over the way you work—genuine independent contractors can choose how they get a job done, including by hiring other people to sub-contract work to
• You are integrated into your employer’s organisation—genuine independent contractors remain independent, meaning you should not have a boss to report to
• You are required to wear a uniform, or display material that associates you with your employer’s business—genuine independent contractors work for themselves, not the company that engages their services
• Your employer can suspend or dismiss you as they would an employee

Sham contracting is illegal. However, a lack of enforcement means that it remains widespread.

Daily and Weekly Hire

Certain employees can be hired on a daily and weekly basis. This is limited to:

• Trades people and labourers who work under the Building and Construction General On-site Award
• Mechanics and plumbers who work under the Plumbing and Fire Sprinklers Award

You can be employed for either part-time or full-time hours in this type of employment.

Apprentices can only be hired on a weekly basis.

Both daily and weekly hire employees are covered by any Award or enterprise agreement that covers their workplace, meaning that you get the same entitlements as the permanent employees also working there.

Daily hire employees also have additional entitlements:

• Giving or receiving only one day’s notice when leaving their job
• Tradespeople are paid for an extra hour at the end of their employment to collect, clean and pack away their tools
• A follow-the-job loading—a higher rate of pay that compensates for the time they spend not working between jobs

Labour Hire

Labour hire employees are engaged by a labour-hire provider, which supplies workers to a host organisation. Labour hire—also known as on-hire work—is commonly used to staff events and functions, where employees are only needed once and for a short amount of time.

As a labour hire employee, your entitlements come from the award or enterprise agreement that covers the labour-hire provider’s workplace—not the award or enterprise agreement that covers the host organisation. Labour hire employees are usually hired by the labour hire provider on a casual basis and are not entitled to paid leave or standard notice periods.

The labour hire provider is responsible for making sure your rights and entitlements are observed.

However, the host also has a responsibility to provide a safe workplace—which includes making sure you are not the victim of discrimination or harassment. Host organisations can be penalised if they do not do enough to make sure that your rights are observed.

Outworkers

Outworkers are employees or contractors who work at their home or somewhere that wouldn’t be considered a normal business premises (at least in a pre-pandemic world). Outworkers are common in the textile, clothing and footwear industries.

The award or enterprise agreement that covers your workplace applies to outworkers as it does to other employees.

However, if your workplace is covered by an enterprise agreement that has some conditions that are worse than the relevant Award, then those award conditions still apply to you as an outworker.

Awards and enterprise agreements often contain specific terms for outworkers. Ask your union for help if you are unsure about how to read your award or agreement.

If you need to know more about types of employment contracts, you can contact your union or the Australian Unions Support Centre for free, confidential information and advice about any workplace issue.

Types of Employment – Frequently Asked Questions

What are the different sources of terms and conditions of employment?

Terms and conditions of employment in Australia can be found in:

1. Individual contracts
2. Enterprise agreements
3. Awards
4. Legislation

An individual contract is an agreement between an employer and employee that sets out the terms and conditions of employment.

An enterprise agreement is an agreement between an employer and a group of its employees, that sets out the terms and conditions those employees.

An Award is a legally binding document made by the Fair Work Commission that sets out the minimum pay and conditions for employees in a particular industry or occupation.

The Fair Work Act contains National Employment Standards in relation to a number of employment conditions.  Other State and Commonwealth legislation makes provision for long service leave, work, work health and safety rights and anti-discrimination rights.

How can Enterprise Bargaining Agreements better benefit workers than Modern Awards?

An Enterprise Bargaining Agreement (EBA) is an agreement negotiated between workers acting together as a collective and their employer for improved pay and better working conditions.

Three are three types of EBAs which vary with the number of employers involved and type of employment:

• Single-enterprise agreements: agreements between single employers and their employees.
• Multi-enterprise agreements: agreements between a group of employees and multiple employers.
• Greenfields agreements: agreements between employers and a union in a new workplace. These are made before the employer has hired anyone, which is why it is vital that unions are involved, so that future employees are sure to get a fair deal.

Bargaining works best when workers are organised and stick up for each other. Union representation allows the collective voice of workers to be effectively relayed to employers.

This collective approach is often far more powerful than trying to negotiate terms alone with your employer one-on-one. It also prevents the employer from playing employees off against one another.

Union delegates hold meetings during the bargaining process to ask for your feedback, keep you informed of developments, ask you to vote on further action, or to vote to accept the new EBA.

Although employers and employees usually need to make concessions in order to reach agreement, EBAs must always leave employees better off overall than they would have been under the relevant award (also known as the ‘Better Off Overall Test’ – or ‘BOOT’).

Once all parties endorse the proposed EBA the Fair Work Commission must also assess it for approval.

What is the most basic type of employment contract in Australia?

In its most basic form, your employment contract sets out yours and your employer’s responsibilities, commonly when you are starting a new job.

This contract is an agreement between you and your employer that sets out the terms and conditions which will apply during your employment and are legally binding. As a result, the employee and employer acquire certain legal rights that they must uphold.

An employment contract does not have to be in writing to be legally binding. Legally binding written contracts do, however, provide more certainty for both the employer and employee. Hence, when it comes to types of employment in Australia, knowing the ins and outs of your contract is crucial.

Regardless of what is in your employment contract, however, you will be entitled to at least the minimum standards in the National Employment Standards in the Fair Work Act 2009, and the minimum pay and conditions set out in any applicable Award.