2.5 Recruitment, selection and
employment guide including
industrial, legal and insurance
requirements
2.5.2 Employment options
Who is engaging the practice nurse?
Australian general practices operate under a range of structures
with different legal entities employing some, most or all of the
practice staff. These entities may include a company, a trust
or a partnership. The practice nurse might be engaged as an
independent contractor or, more commonly, as an employee of
the practice. In some situations, the GP may be the employer.
Where a trust is employing the person, the employer is the
trustee of the trust. Similarly, where a partnership is employing
the person, the employer is the partners in the partnership.
It is important to decide who is going to engage the practice nurse. In a large practice with a number of independent general
practitioners practicing from the same building, more than
one practice nurse might be engaged and the nurses might
be engaged by different legal entities. The entity engaging the
nurse must have sufficient revenue to pay the nurse and, if
engaging the nurse as an employee, must have the requisite
insurance cover.
The practice must ensure that arrangements for insurance, PAYG taxation, superannuation, payroll tax (if applicable) and
other regulatory requirements reflect the engagement of the
practice nurse — independent contractor or employee — and
that they are aligned for each practice nurse so that the correct
entity is engaging the nurse.
Options for engaging practice nurses
There are two principal options available to the GP/practice (the practice) when engaging practice nurses:
1 practice nurses may be engaged as independent
contractors
2 practice nurses may be engaged as employees (the most
common method).
Engaging a practice nurse as an independent contractor
An independent contractor is a person who provides services to
the practice, but is not employed by the practice.
The contractor (and not the practice) is required to comply with relevant industrial laws and employment related taxation laws.
If the practice engages a practice nurse on an independent
contractor basis, the practice will not be required to pay, in
respect of the practice nurse:
• PAYG or payroll tax
• Superannuation Guarantee Contributions
• some insurance premiums (usually, the contract governing
the independent contractor arrangement will provide that
the contractor is
• required to obtain workers' compensation
insurance, professional indemnity insurance and public
liability insurance. The practice should,
• however, inform
its insurer if it intends to engage a practice nurse as an
independent contractor and ensure that the practice
complies with
• its own insurance policy terms and disclosure
obligations to its insurer)
It is essential to document an independent contractor arrangement in a clear written contract. With such a contract in
place, there should not be major problems. The contract should
clearly place responsibility for employment related costs on the
contractor and include an appropriate indemnity of the practice
by the contractor.
However, regardless of what is stated in a contract, how a practice nurse is engaged may become an issue in the event
of a claim by the practice nurse, a claim against the practice
relating to the conduct of the practice nurse, or an enquiry from
a regulatory body. Simply describing the practice nurse as an
independent contractor or as an employee in the contract will
not be sufficient. Courts and tribunals will also look at what work
is actually performed and how that work is performed.
In June 2006, the Commonwealth Government released a draft of a proposed Commonwealth Independent Contractors Bill,
which, amongst other things, seeks to limit state regulation of
independent contractor relationships and to prohibit employers
from terminating employees and rehiring them as independent
contractors. The Bill is not enacted legislation at this time.
Engagement of the practice nurse as an independent contractor does not eliminate the legal exposure of the practice for the
conduct of the nurse. It is therefore important that the practice
ensures that its own insurance cover extends to this exposure.
Engaging a practice nurse as an employee
Practice nurses may be engaged by the practice as employees.
As an employer, the practice will be vicariously liable for the actions of the practice nurse and will be responsible for the
payment of:
• PAYG income tax and Payroll taxes
• Superannuation Guarantee Contributions
• workers' compensation insurance
• employee entitlements such as sick pay, annual leave,
holiday pay, parental leave, and redundancy pay.
Employees may be engaged on a number of bases, including:
• on a casual basis
• on a permanent part-time basis
• on a full-time basis.
Casual employees
Casual employees work as and when required. Generally, the
practice is not required to guarantee a casual worker a minimum
number of hours per week. However, the practice may have to
pay a minimum number of hours for a shift, depending on the
terms of the applicable Award or industrial agreement. Casuals
are entitled to a minimum 20% loading in addition to basic
hourly rates of pay. Casuals are not entitled to annual leave, sick
leave or holiday pay.
Part-time employees
Part-time employees work less than the standard full-time
38-hour week and are engaged on a regular basis. Part-time
employees usually work a set number of hours per week (which
the employer is required to honour). Part-time employees
generally accrue annual leave, sick leave and other employee
entitlements, on a pro rata basis.
Full-time employees
Full-time employees work 38 hours per week. Full time
employees enjoy the full range of employee entitlements.
Application of Work Choices to GP practices
The majority of Australian general practices are subject to Work
Choices industrial law because the employing entity is a trading
corporation for the purposes of the Australian Constitution.
It is important to note that it is the employing entity that is the
key factor. Australian GPs practise in a wide variety of settings
and structures. There may be a practice company or a service
trust or a partnership that employs the staff in the practice and
will be employing the practice nurse.
In some situations, an individual GP may wish to employ their
own practice nurse rather than have the group practice entity do
so. It is also possible that practice nurses working in the same
GP practice may have different employers. This could arise
where legally separate practices conduct their practices from the
same premises but do not use the same entity to employ staff.
Work Choices will also apply to GP practices in Victoria, the ACT and the Northern Territory due to the ‘territories’ power of
the Commonwealth under the Australian Constitution and the
referral of industrial powers by Victoria to the Commonwealth.
Although limits on powers given to the Commonwealth mean
Work Choices cannot apply to a trust or a partnership under
the corporations power of the Australian Constitution, it is likely
that the employment of practice nurses by a service trust or partnership will also be subject to Work Choices.
The majority of service trusts used to employ staff will have a
company as trustee and it is this company that is the employer
of staff. It is also likely that a number of GP practice partnerships
will have the GP’s practice company as the partner in the
partnership rather than the GP personally. A practice nurse
employed by a partnership has the partners as their employer.
GP practices engaging a practice nurse as an employee must
carefully determine whether Work Choices applies to the
employer and the employment contract. Practices may need
specialist employment law advice on this issue.
Work Choices became effective on 27 March 2006. There are
many issues that remain to be clarified or tested under Work
Choices and users of this Kit should ensure that they have
checked up to date information to ensure that they will comply
with Work Choices.
Industrial instruments that govern the employment
conditions of practice nurses
In general terms, practice nurses can be employed under an Award, a certified agreement or an individual contract (Australian
Workplace Agreement or common law contract). Prior to 27
March 2006, Awards and agreements, depending on the
jurisdiction, were either federal or state industrial instruments.
Awards and certified or ‘enterprise’ agreements are legally
binding instruments that operate with the force of legislation
regulating the terms and conditions on which specified types
of workers may be employed. They cover entitlements such as
minimum hours of work, rates of pay, job classification levels,
annual leave, holiday pay, allowances, overtime and time in
lieu, and personal/carer’s leave. Awards are made by industrial
tribunals established under either federal or state law.
Employees cannot be offered or paid entitlements less generous than provided for in a binding award or agreement. However,
employers and employees may contract to provide for more
generous entitlements, for example, a higher wage rate than
that provided in the applicable award.
Before the introduction of Work Choices
Other than Victoria, the ACT and the Northern Territory (where
Federal Awards and Agreements apply), the terms and
conditions of employment of practice nurses was governed
by state awards. For example, in New South Wales, practice
nurses were covered by the Nurses (Other than In Hospitals)
(State) Award and in Queensland they were covered by the
Nurses’ Award (State) 2005.
After the introduction of Work Choices
In broad terms, Work Choices represents a transfer of industrial
and much (but not all) of employment regulation from states
to the federal government. The principal legislation is the
Workplace Relations Act 1996 and its associated regulations.
• If bound by a Federal Award or Certified Agreement or
using an Australian Workplace Agreement (AWA)
If the employer of the practice nurse is bound by a Federal
Award, the Federal Award continues to apply. Existing Federal
Certified Agreements and AWAs will also continue to operate.
However, prohibited content will not apply and the Agreement
must provide at least the terms and conditions in the Australian
Fair Pay and Conditions Standard (the Standard).
All Federal Awards will be subject to an awards simplification process under Work Choices and GP practices will need to
keep up to date with this process.
• If bound by a State Award
If the employer of the practice nurse is currently bound by a
State Award, this Award will continue to apply for a transition
period unless replaced. This transition period ends on the earlier
of the expiry date of the Award or a three-year period ending
on 27 March 2009. The State Award is now known under Work
Choices as a ‘notional agreement preserving state awards’
(NAPSA).
Certain prohibited content in NAPSAs will not apply under Work Choices. Employers can opt out of the NAPSA
by offering a new Collective Agreement or an Australian
Workplace Agreement.
• Other employment arrangements
Few GP practices are likely to have State Certified Agreements in place. If they do, Work Choices maintains these as a
‘Preserved Collective State Agreement’. They cannot be
extended or varied (other than to remove prohibited content).
Common law contracts can continue, however they must
comply with a number of Work Choices requirements and
provide at least the new Standard terms and conditions.
• If the employer did not exist before March 2006
It is important to note that where the GP practice did not exist
on 27 March 2006, or a new legal entity is established by a
GP practice after 27 March 2006 to employ the practice nurse,
the practice nurse cannot be employed under a preserved
State Award.
The Practice Nurse must be employed under an AWA, a Certified
Agreement or the Australian Fair Pay and Conditions Standard.
Australian Fair Pay and Conditions Standard
Work Choices establishes new minimum terms and conditions
of employment known as the Australian Fair Pay and Conditions
Standard (the Standard). The key minimum entitlements
prescribed by the Standard include the following:
• Basic rate of pay: The Australian Fair Pay Commission will
set Federal minimum wages.
• Maximum ordinary hours of work: The Standard
applies to both permanent and casual employees. Ordinary
working hours are 38
• hours per week, plus reasonable
additional hours.
• Annual leave: The Standard applies to permanent
employees, but not to casual employees, with respect to
annual leave. Employees
• continue to be entitled to four
weeks’ paid annual leave per annum, but a different method
of calculation is used based on a four week
• accrual.
• Personal/carer's leave, including sick leave: The
Standard applies to permanent employees only, with the
exception that both
• permanent and casual employees
are entitled to unpaid carer’s leave (of a maximum of two
days per occasion). Personal/carer’s leave can
• be used
as sick leave or carer’s leave (that is, paid leave to care for
family members). Like annual leave, the basis on which
• personal/carer’s leave accumulates involves a four week
accrual system.
• Parental leave: The Standard provides for 12 months’
unpaid parental leave for both permanent employees (full
and part-time staff) and
• eligible casual employees, being
casual employees engaged on a regular and systematic
basis in the last 12 months prior to taking
• parental leave.
The impact of Work Choices on state Awards
For employers of practice nurses now covered by Work Choices and who were subject to a state Award prior to 27 March 2006,
the state Award continues to apply during a transition period
unless replaced by the GP practice with a Certified Agreement
or Australian Workplace Agreement. The transition period is
up to three years and expires on the earlier of its expiry date or
27 March 2009.
If not replaced with a Certified Agreement or AWA, the Practice
Nurse will remain entitled to most state Award conditions
during the transitional period with the state Award becoming a
‘Notional Agreement Preserving State Award’ (NAPSA).
A NAPSA will include any term and condition of employment that was in the original state award. The wage and classification
structures become a preserved Wage and Classification Scale
subject to review by the Australian Fair Pay Commission.
The Standard will override the NAPSA entitlements if the
Standard is more generous than the applicable award. For example, the NSW Nurses (Other than In Hospitals) (State)
Award provides that a nurse is entitled to five days sick leave
in the first year of employment, and eight days each year
thereafter. The Standard provides for 10 days personal/carer’s leave (including sick leave) and is therefore more generous. The
entitlement prescribed in the Standard will therefore override the award entitlement, as it relates to personal/carer’s leave, including sick leave.
Some clauses of NAPSAs are no longer enforceable and are deemed to be void. These clauses are clauses that contain
prohibited content and an example is clause 19 of the NSW
Nurses (Other than In Hospitals) (State) Award, that deals with
rights of entry for union representatives.
The practice nurse may be employed under a Certified Agreement or an Australian Workplace Agreement. The
practice nurse can also be employed under a common law
contract. The common law contract must provide terms and
conditions equal to or better than the terms of the NAPSA
and Standard.
Unfair dismissal
Under Work Choices, employers with less than 100 employees
are generally exempt from unfair dismissal laws. However they
remain subject to claims for unlawful dismissal (eg, dismissal
found to be based on grounds prohibited by discrimination law).
Part-time and casual employees count towards the number of employees as do employees of related bodies corporate.
Matters which Work Choices does not regulate
While Work Choices operates to exclude the operation of many
state industrial relations legislative instruments, certain state
laws remain in force and continue to regulate the employment
of practice nurses. Matters which will continue to be regulated
under state law include the following:
• the method of payment of wages
• the frequency of payment of wages
• jury duty
• public holidays
• occupational health and safety
• workers' compensation
• state and territory discrimination law
• long service leave.
Work Choices record keeping requirements
Work Choices imposes extensive record keeping requirements
on employers in relation to employees. Its regulations require
all employers covered by Work Choices to keep written
records in English, which must be retained for seven years,
and be made available for inspection by workplace inspectors
if required.
The Work Choices regulations allow for workplace inspectors
to issue infringement notices for breach of record keeping
requirements as an alternative to initiating court proceedings.
To allow employees to familiarise themselves with the new
requirements, and adjust their systems accordingly, an employer
cannot be prosecuted by a workplace inspector for failure to
comply with the requirements until 26 March 2007.
Broadly, records must indicate:
• the instrument which covers each employee (eg, workplace
agreement, award)
• remuneration earned, including the hourly rate of pay,
allowances, and pay period
• the total number of hours required to be worked each
day and breaks taken by each employee whose base
annual salary (that is,
• excluding employer superannuation
contributions, bonuses, loadings, etc) is less than $55,000
• If an employee is entitled to overtime loadings under an
industrial instrument or a contract of employment — the
employee’s start and
• finishing times. (note: this includes
employees earning more than $55,000)
• the accrual of annual, personal or other forms of leave and
the balance of each type of leave
• the amount of superannuation contributions paid and the
fund to which they were made
• If an employee's employment is terminated, the reason for
the termination and the name of the person who acted to
• terminate the employment.
Certain information must be included in a pay slip, including the employing entity’s full name and ABN.
Super Choice
Superannuation Guarantee Contributions must be made by
employers in respect of all employees. The employer is required
to contribute 9% of the practice nurse’s earnings base (up to
a maximum base of approximately $134,000) to a nominated
superannuation fund.
Under superannuation legislation, ‘employees’ include full-time, part-time and casual employees and a broad range of other workers, including some contract workers.
From 1 July 2006, choice of superannuation fund is now available to all employees of practices covered by Work
Choices, including Practice Nurses covered by a preserved State Award (NAPSA).
New eligible employees must be provided with a super choice
form within 28 days of their start date.
If an employer fails to meet the minimum level of superannuation
contribution for an employee, the employer will incur a liability
for the superannuation guarantee charge, enforced by the
Australian Taxation Office.
Workers’ compensation insurance
Workers’ compensation legislation sets up a scheme
of mandatory benefits to be paid to employees injured
whilst at work. Each state and territory has a workers’
compensation scheme.
All employers must obtain workers’ compensation insurance from an approved insurer in respect of each of its employees.
Occupational health and safety
Each state and territory has enacted legislation designed to
impose duties and responsibilities upon employers in relation to
the occupational health and safety (OH&S) of their employees.
OH&S legislation makes it mandatory for employers and controllers of premises to provide a safe work environment for
both employees and non-employees, that is without risk to
health, safety and wellbeing.
In all jurisdictions, a breach of the applicable legislation may
be recorded as a criminal conviction against the company and
a monetary penalty imposed (in some cases up to an amount
exceeding $500,000). Most legislation also contains provisions
allowing individuals, such as supervisors and company
directors, to be prosecuted personally. As in the case of a
company, a criminal conviction may be recorded against the
individual prosecuted.
An actual injury to an employee is not necessary to give rise to a
prosecution under occupational health and safety legislation. A
risk to the health, safety and welfare of employees (and certain
non-employees, such as people who access the employer’s
workplace) may amount to a breach of the legislation.
The legislation imposes duties on controllers of premises as
well as the employer. Depending on the GP practice structure
involved, there may be a service entity providing the premises
in which the practice nurse will work while another entity is the
practice nurse’s employer. Both entities will have obligations to
the practice nurse under OH&S legislation.
Discrimination
The federal government has enacted a number of legislative
instruments that prohibit, among other things, discrimination in
the workplace, on a number of grounds, including sex, race,
ethnicity, religion, sexual orientation, disability, age and parental
and marital status.
Anti-discrimination legislation also exists at state and territory level. While similar, the state or territory legislation may cover
different grounds of discrimination and have different complaints
bodies and dispute resolution mechanisms.
In addition, equal opportunity legislation exists, imposing positive obligations on certain employers (including those with more than 100 employees) to implement equal opportunity in
the workplace for women.
Anti-discrimination legislation deems that in many circumstances, an employer is also liable for the discriminatory
acts of its employees.
Employees who allege that they have been discriminated against may lodge a complaint under the federal legislation with the Human Rights and Equal Opportunity Commission
(HREOC). If the complaint is not resolved at this level, a
claim may be commenced in the Federal Magistrates Court
of Australia.
For further information on discrimination law, a good starting point is the HREOC website (www.humanrights.gov.au).
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