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The people working within your business each fall under a category of employment. Each type of employment has different obligations for both you and your employees.

You need to determine whether your workers are classed as employees or contractors. An employee is someone who works under a contract of employment. Those who are not employees are referred to as independent or sub-contractors. There are significant differences in a legal context between the two regarding awards, superannuation, insurance and compensation. The ATO provides an Employee/Contractor Decision Tool to help you determine what type of workers you employ.

It is important to establish the most suitable type of employment for each individual situation when recruiting new staff. The categories of employment are outlined below:

Full-time Employees:

Used where an employer requires a stable and consistent workforce with essential skills, knowledge and experience. Their hours will depend on the type of work and conditions of employment.

Part-time Employees:

These employees work fewer hours than full-time employees doing the same or similar tasks. They have continuing contracts of employment over an unspecified duration with similar conditions to full-time employees.

Casual Employees:

Generally employed for short term, irregular or seasonal work. The essential feature of casual work is that the employee enters into a series of short-term contracts, with no promise to provide work or be available for work on other occasions and no permanent employment entitlements. Therefore their wages usually include compensatory loadings.

Probationary employees:

An employment contract may specify a probationary period. Where the period of probation determined in advance is three months or less, dismissal of the employee during that period is generally exempt from the federal termination of employment provisions.

Fixed-term Employees:

Often employed for project work or to replace employees absent on extended leave. They generally accrue entitle

ments such as annual and sick leave. There is legislation related to the termination of fixed-term contracts.

More information on the types of employees can be found at the ATO website on determining the status of your employees.