Employers have an obligation to comply with commercial, employment and safety legislation when engaging employees. For small business, this can feel overwhelming and confusing at times, while larger organisations may make assumptions that the correct processes, checks and balances are in place, when in reality not all areas of their business comply.

“In my experience, companies of all sizes make unintentional mistakes,” says Alan. “Engaging employees correctly assists in avoiding compliance-related legal actions resulting in a range of claims, including underpayment or unfair dismissal. More importantly, compliance can protect organisations from more wide-ranging impacts, such as low morale, reduced productivity and reputational damage.”

Common mistakes typically involve misunderstanding employment contracts, failing to comply with industrial instruments, and mismanaging casual employment conversion.

1. Understanding Employment Contracts

The contract of employment sets the tone for an employee’s ongoing engagement. It should define key requirements from the National Employment Standards (NES), Fair Work Act and the Industrial Instrument, more commonly known as the “Award” that applies to the work being performed. Correctly determining the Award is essential (see below) as it underpins the contract terms and conditions.

Minimum entitlements available to workers should be included, plus additional entitlements the company provides. These minimum entitlements include:

• Annual and personal leave
• Long-service leave (conditions are State-based in Australia)
• Compassionate leave
• Family and domestic violence leave
• Notice of termination by the employer (NB: employees are governed by the Award)
• Redundancy – this may be industry-based, depending on the applicable Award
• Fair Work Information Statement – while this is not part of the contract, it should be sent with the contract. Please note, you will need to provide the statement relevant to the engagement type (i.e. full-time, part-time, casual).

Contracts should also reference the Award, classification, pay rate and engagement type, as well as company property (e.g. cars, phones, laptops). It is also important to reference policies employees are contractually bound to follow such as an Employee Handbook, Code of Conduct, Safety Policy etc.

Given recent legislative changes, when reviewing contracts, check:

• For updated Superannuation clauses
• The Award classification is still relevant
• You have a written agreement on hours of work with part-time employees
• You don’t have firm and advanced commitment for casual work, such as set hours in the contract
• You have specified appropriate contact outside of hours for specific employees, generally highly paid employees or leaders, or industry specific scenarios for employees on-call

With the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 still recent, it’s essential to ensure you have covered all necessary requirements in your contract documentation.

2. Compliance with the industrial instruments

A modern award is a document that sets out the minimum terms and conditions of employment on top of the National Employment Standards (NES). While the NES grant all employees basic rights, the Award details pay rates, conditions and additional entitlements, such as a minimum shift length, meal allowances, travel allowances or when overtime applies.

Understanding which industrial instruments apply and your obligations in relation to these instruments is critical to the correct engagement of employees. This applies to all staff, from casuals through to permanent full-time employees.



“When selecting the Award, there is a hierarchy of applicable Awards, starting with industry, then occupation, followed by the miscellaneous Award. If there is no applicable coverage, the employee is most likely award free,” says Alan. Those who are award-free are generally highly paid, or fall under specialised employment, such as Accountants and Leaders.

3. Casual Employment and Conversion

Casual employment plays a significant role in many industries and organisations, and for many, this is often their first experience in the workforce. The new definition of casuals under the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 has increased obligations for employers.

The definition includes a general rule that an employee is a casual only if: there is no firm advance commitment to continuing and indefinite work, and they are entitled to a casual loading or a specific rate of pay for casuals under a Fair Work instrument or their employment contract An exception to this general rule applies to some academic and teaching staff at higher education institutions engaged on fixed term contracts. 

It is essential to note that from 26 August 2025, all casuals working for a small business will fall into this new definition. A small business is defined as one with fewer than 15 employees across all related entities. There is also the removal of red tape, as some requirements for a conversion are moved onto the employee.

Employers will no longer need to tie up resources in sending casual employees an offer to convert. The new system and definition allow the employee to request conversion. Please note that employers have a 21-day response requirement, so it is essential to log and effectively manage requests. Small businesses will need to send the Casual Employment Information Statement after 12 months only, unless they grow beyond the definition of a small business.

However, companies with 15 or more employees are required to file the Casual Employment Information Statement at six months, 12 months and then every 12 months thereafter. Please note, for employees on Fixed Term contracts, you will need to provide the Fixed Term Contract Information Statement at the commencement of the contract.

One positive change is that employees who start as a casual, will stay casual until their employment status changes. It is essential that business not only understand casual employment and conversion, but that they have robust systems in place to monitor and manage it.

Whether you need advice at the end of the phone, your current systems reviewed or help managing a claim, Acclaimed Workforce can assist you.