Freedom of Contract - is there really such a thing?

It has been premised that employers and employees have the right to negotiate their terms of contract. The concept of autonomy describes this as people should be free to choose whom they employ and whom they work for.

However, the autonomous nature of employment and the freedom to negotiate the terms of an employment contract is curtailed by the power imbalance that exists to a greater degree for those who have the power to employ.

For instance, it was been held that that the power of an employer to withhold money is more effective than an employee’s power to withhold work (Federated Engine-Drivers and Firemen’s Association of Australia v Broken Hill Proprietary Co Ltd (1911) 5 CAR 9, Higgins J).

This may be because society places a degree of dignity to individual lives regarding what they do for a living. Work often defines who people are and their social status in life. As the Court stated in Johnson v Unisys Ltd [2003] 1 AC 518 per Lord Hoffman…employment is

          “…not only a livelihood but an occupation, an identity and a sense of self-esteem.”

AND even when all the terms are fair and seem to benefit both the employer and the employee, over the course of an employee’s tenure the contract of employment can become the opposite for an employee.

As employers enjoy the freedom to change the working environment, employ other workers, restrain an employee from seeking outside employment etc.  But for an employee these enjoyments rarely exist.

Additionally, not all workers are equal such as the vulnerable workers these include, young people, people with disabilities, seasonal workings, migrant workers, or Australia's large population of casual workers. These workers especially are likely to find it difficult to have true freedom of contact when they are entering the employment sector.

Luckily in Australia we do have 3 systems of policies at work to negate the imbalance to some degree. The Fair Work Act (FWA), the Modern Awards and the National Employment Standards (NES) covers a large portion of the Australian workforce establishing employment rights and work benefits across a broad range of entitlments along with regulating  the terms of an employment contracts. Premised on a fair go all round’ type methodology for both employers and employees.

These 3 legislative systems provide for the protection of

• unfair dismissal,
• unfair contract terms,
• terms that must be included and cannot be derogated,
• terms that are prohibited to be in an employment contract 
• Anti- discriminatory, bullying and harassment treatment
• The maximum weekly hours allowed to be worked before overtime pay is required
• Allow for requests for flexible working arrangements to be made
• Parental leave and related entitlements to be paid
• Annual leave entitlements for employees
• Personal/carer's leave, compassionate leave and unpaid family and domestic violence leave
• Community service leave  
• Long service leave  
• Public holidays work rights
• Notice of termination and redundancy pay

Therefore, the FWA, together with the NES and Modern Awards provides for a somewhat fairer balance of power for Australian workers  - ' a fair go'.

However, as Australia moves into a greater casual worker population, we may need to revise our 3 system policies as these policies do little to stop the imbalance of power faced by vulnerable workers or Australia’s growing populous of casual workers.

For instance, casual workers do not see many of the rights reversed for full time workers. For instance, unfair dismissal will not apply and leave entitlements are mostly unpaid such as: -

1. unpaid carer's leave
2. unpaid compassionate leave
3. unpaid family and domestic violence leave

As such the imbalance for many in the Australia workplace is real and ongoing and the freedom of contract ideal gives little comfort to the majority of causal and/or seasonal workers in Australia.

If you or someone you know has been is working under an unfair contract of employment or suffering forms of workplace discrimination, contact Rep-Revive Criminal & Employment Lawyers® on (02) 9198 1996.