Remote Work Agreement

What is a Remote Work Agreement?

A Remote Work Agreement is a contract for use when an employee is hired for a remote role under Australian employment law. "Remote work" is often also referred to as "working from home" or "teleworking". A Remote Work Agreement can be used for a range of different employment types, including full-time, part-time, casual, and fixed term.

The Agreement sets out all of the terms of employment, including job duties, salary and benefits, work hours, confidentiality, annual leave and other key terms. It also includes various terms relating to the remote work arrangements, including any equipment requirements, and any procedures for signing in for work and/or reporting to supervisors.

What are the different types of Remote Work Agreement?

There are two broad categories of Remote Work Agreement in Australia:

• Fixed term: The employee is hired for a fixed period of time, until the end of a specific project.
• Permanent: The employee is hired on an ongoing basis. Their employment continues indefinitely, until it is terminated by either the employee or the employer.

In addition, whether they are engaged on a fixed term or a permanent basis, employees may also fall into one of the following categories:

• Full time: The employee works full time hours (normally 38 hours per week).
• Part time: The employee works a regular schedule but fewer than full time hours. For example, the employee might work business hours on Mondays and Tuesdays only.
• Casual: The employee's hours vary from week to week, with no guaranteed hours. For example, they might work 6 hour shifts on Wednesday, Thursday and Friday nights one week, and then the following week they might only work 5 hour shifts on Friday and Saturday nights. Casual employment is common in retail and hospitality but can also be used in other industries.

What is the difference between a Remote Work Agreement and an Employment Agreement?

A Remote Work Agreement is a form of employment contract, which is designed specifically for remote workers. It is not suitable for workers who attend a physical workplace. It is also not suitable for workers in hybrid employment (working from home some but not all of the time).

An Employment Agreement is a more general type of employment contract which is suitable for workers who attend a physical workplace. It may also be used for hybrid workers.

What is the difference between a Remote Work Agreement and a Service Agreement?

A Service Agreement is another way that workers may be hired in Australia. In many cases, Service Agreements are also used for workers who are working remotely. However, unlike a Remote Work Agreement, a Service Agreement is only used for hiring workers as contractors rather than as employees.

The difference between an employee and a contractor is based on many factors. It depends on the entire arrangement between the business and the worker, and whether the worker is working within the business, as part of the business (like an employee) or whether the contractor is running their own business (like a contractor). Some common considerations include:

• whether the worker can subcontract/delegate the work
• whether the worker provides their own tools and equipment
• whether the worker is paid for the time worked, or based on a quote for the result achieved (eg a quote for the painting of a room)
• the amount of control that the worker has - whether the worker can choose their own hours or location of work, and what sort of control the business has over how the work is performed
• who is responsible for mistakes in the work - whether the worker has to rectify mistakes at the worker's own cost, or whether the business is responsible for any mistakes in the work

Employees have the right to some entitlements that most contractors do not - such as superannuation, guaranteed minimum wages, and paid leave (except in the case of casual employees). It is against the law for a business to incorrectly treat a worker as a contractor when they should be treated as an employee. In doing this, the business will be neglecting its various obligations such as payment of superannuation and employee entitlements. There can be significant penalties associated with this.

Further information is available through the Australian Taxation Office, the Fair Work Ombudsman or business.gov.au. We also have a legal guide called What's the Difference Between an Employee and an Independent Contractor? which also addresses this matter in more detail. Consider getting legal advice if further information is required.

What is the difference between a Remote Work Agreement and a Letter of Offer of Employment?

A Letter of Offer of Employment is similar to an Remote Work Agreement or an Employment Agreement, but is much more brief.

A Letter of Offer of Employment is designed to be a quick and easy document for employers to send to employees as soon as they are hired. Many employers choose to send a Letter of Offer of Employment when they first hire a remote worker, and then to follow it up with a Remote Work Agreement. However, as a Remote Employment Agreement goes into a lot more detail, the employee may need some time to go through it before they sign it, and therefore it is handy to have a basic Letter of Offer of Employment to get the ball rolling.

Some employers, however, find that a Letter of Offer of Employment covers everything that they need, so they do not bother to follow it up with a Remote Work Agreement. As long as the employer has looked at what is contained in a Remote Work Agreement, is happy to forego the additional provisions that it contains, (and has taken legal advice if necessary), then there is nothing wrong with this.

Is it mandatory to have a Remote Work Agreement?

No, but it is highly advisable to have one.

Having a written Remote Work Agreement helps protect the interests of both the employer and the employee. It also helps ensure that both parties understand the terms, and are able to enforce their rights.

A written Remote Work Agreement is also useful in courts, commissions, tribunals or other forums. For example, if the employee makes a claim for unfair dismissal to the Fair Work Commission, it will be useful for them to have a written agreement to provide as evidence.

Who can enter a Remote Work Agreement?

The employee and the employer should sign the Remote Work Agreement. The employer could be a company or other business entity (such as a partnership). The employer could even be a sole trader.

The employee should have the lawful right to work in Australia either via their citizenship or a valid work visa.

Each state and territory of Australia has rules about the minimum age for employees. The rules often vary for different industries or categories of work. In many states and territories the minimum age for part time or casual jobs is often quite relaxed. However, there are often more strict rules for full time employees. In most states and territories, employers may also need a Child Employment Permit if they are employing someone under the age of 17.

What can be the duration of a Remote Work Agreement?

A Remote Work Agreement can be for a fixed term, meaning that the end date is agreed before the contract is signed. When that date arrives, the employment will naturally come to an end. The duration of a fixed term contract could be as short as one week or less, but must not exceed two years in total (including any extensions or renewals).

Alternatively, a Remote Work Agreement can be permanent (ongoing) meaning that the employment does not end until it is terminated by either the employer or the employee.

If the employee is being employed for more than two years, then they will need to be given a permanent contract rather than a fixed term contract.

Is the employer required to pay for electricity, internet and other bills for a remote worker?

It depends. To be safe, and to maintain staff morale, many employers choose to pay these costs for their employees. In terms of the legal position in Australia though, employers do not necessarily need to pay for a remote worker's basic costs such as electricity, internet or other bills.

If the employee has more significant costs associated with their remote work, then the employer should cover these costs. For example, if the employee works in a role that requires them to print a lot of material or use an excessive amount of electricity or internet data, then the employer should cover these costs.

In addition, if the employer has told the employee that they must work from home (rather than the employee requesting it), then the employer should be covering any additional costs that the employee incurs as a result of this. Employees should not be left out of pocket as a result of this arrangement. On the other hand, if the employee asked to work from home, then it might be more reasonable not to cover all of their costs. They might be spending a bit more on electricity or internet, but this could be offset against the savings they make by not having to commute.

If employers are choosing to cover these costs, they often choose to simply pay a regular allowance to the employee, in addition to the employee's salary or wages.

Does the employer need to provide a computer, a phone and other electronic devices to the remote worker?

Again, it depends. It is generally the employer's responsiblity to ensure that the employee has the right tools and equipment to do their job safely.

If the employee is able to do their job using their personal equipment such as their phone and laptop, then the employer might not need to provide these for them. However, if the employee does not have the necessary equipment, or needs some specialised equipment in order to do their job, then the employer will usually provide this.

Employers have a duty of care to ensure the health and safety of employees. This even applies if the employees are working from home. This may require the employer to conduct a risk assessment and make sure that the employee has the right equipment to create a safe workplace (such as a suitable chair and desk).

In addition, employers will need to think about data security and privacy law, particularly if the employees are handling sensitive data. Many employers provide their employees with software (such as antivirus software and cloud storage systems) to manage these risks.

Some employers choose to actually purchase the relevant equipment for their employees. Other employers provide an allowance and let the employees purchase their own equipment, provided it meets the employer's requirements.

What has to be done once a Remote Work Agreement is ready?

Once this document has been prepared, it can be signed by the parties. Both the employer and the employee will need to sign the document, and keep a copy for their own records.

There are some other documents that the employer also needs to provide to the employee (see the section below).

After signing a Remote Work Agreement, the employer should:

• Make sure the new employee has been given a copy of the Fair Work Information Statement.
• If the employee is a casual, make sure they have been given a copy of the Casual Employment Information Statement.
• If the employee is on a fixed term contract make sure they have been given a Fixed Term Contract Information Statement. Copies of each of these information statements are available for free from the Fair Work Ombudsman.
• Get the employee to complete Online Commencement Forms or a Tax File Number Declaration and Standard Choice Super Form. These forms are all available for free from the Australian Taxation Office.
• Make sure they understand their other payment obligations which may include pay as you go (PAYG) withholding tax, the superannuation guarantee and fringe benefits tax (FBT).
• Ensure the employer has workers' compensation insurance to cover the employee. The employer may also need to notify the insurer of the new employee's details.
• Maintain a file for the employee including their full name and contact details, emergency contact details, tax details, payment details, a copy of their signed Remote Work Agreement, and any other relevant information.
• Keep accurate records for the employee, including payment records and tax records.
  
  

Which documents should be attached to a Remote Work Agreement?

When an employee starts a new job, the employer needs to give them the Fair Work Information Statement. If the employee is being employed on a casual basis, then they also need to be given the Casual Employment Information Statement. If they are being employed on a fixed term contract then they need to be given a Fixed Term Contract Information Statement. Copies of each of these information statements are available for free from the website of the Fair Work Ombudsman.

In addition, any relevant employee policies can also be attached. This could include:

• Employee Handbook
• Workplace Health and Safety Policy
• Drug and Alcohol Policy
• Social Media Policy
• Conflict of Interest Policy
• Remote Work Policy
• Employee Reimbursement Policy
• Discrimination Policy

Is it necessary to have witnesses for a Remote Work Agreement?

No, witnesses are not mandatory for a Remote Work Agreement, but they are useful for evidentiary purposes. If there is ever a dispute over the Employment Agreement, witnesses can help to prove that each party's signature is valid.

Witnesses should be independent adults (aged over 18), who have the mental capacity to understand what they are doing. They should not be related to one of the parties.

What must a Remote Work Agreement contain?

A Remote Work Agreement should contain all of the key terms of the employment relationship, such as:

• The employer's name
• The employee's name
• Job title and description
• The employee's start date
• The employee's job duties
• The employee's normal working hours
  
• How the employee should make themselves available for work - such as logging on to the employer's system or being available online
• How the employee should report to the employer - such as by providing weekly progress reports
• Who is responsible for obtaining the relevant tools and equipment for the employee
• The employee's salary or wages including the amount and frequency of payment
• Any other employee benefits such as superannuation
• The employee's leave entitlements such as sick leave and annual leave
• Termination process

Which laws are applicable to a Remote Work Agreement?

The Fair Work Act 2009 (Cth) applies the National Employment Standards (NES), which are a set of minimum employment standards in Australia. Further information is available from the Fair Work Ombudsman.

In addition, each state and territory has legislation that deals with various employment matters such as occupational health and safety or discrimination.

This Remote Work Agreement does not take into account the requirements of modern awards or enterprise agreements. If such an award or agreement applies, then that will set out some additional minimum standards with which the employer must comply.

General principles of contract law, as provided by the common law, may also apply.

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