Fly in fly out employment

What is a fly in fly out job?

‘Fly in fly out’ (FIFO) jobs are those where an employer will temporarily transport the employee to a location or site of work and then transport them back for a period of rest. This method is most commonly employed in order to avoid relocating the employee (and possibly their family) to the site on a permanent basis. For the employer, it is often cheaper to pay for airfares periodically than establish communities with liveable amenities, especially where the work location is not likely to be permanent (e.g. mining zones). Typically, these types of jobs can be quite difficult and often require long working hours during the ‘fly in’ period. A person proposing to accept such a job should be mindful of their rights and power to enforce their entitlements.

What should I look for within the contract?

  • International issues: Where a fly out location is international, issues may arise as to whether Australian legislation and protection under the Fair Work Act will apply. That is, does an Australian worker employed by an Australian entity working overseas attract the standards of protection under Australian employment law? In many instances, the National Employment Standards, modern awards, unfair dismissal provisions and minimum wages will apply to an Australian employer employing Australian nationals whilst working outside Australia (section 35 of the Fair Work Act). The definitions under s35 would tend to include an Australian employer who is operating through an overseas branch or office as long as their ‘central management and control is in Australia’. However, this will not apply to employees ‘engaged outside of Australia to perform work outside of Australia’ (s35(3)). For this reason, you should ensure your contract of employment is made and signed within Australia, bearing in mind that other factors will guide a court into considering whether you were engaged within Australia, including whether a person has received relocation assistance.
  • Allowances, accommodation and meals: A FIFO employment contract is likely to contain a clause that provides for board and for meal allowance, otherwise falling under the common law duty to indemnify the costs incurred on behalf of an employee. It may also be required by your relevant modern industry award. Consider that accommodation may be shared with other employees or that accommodation may be re-used by other employees during your rest period. You should also assess whether the meal allowance is likely to be sufficient. Allowances may also be calculated according to a proportion of hours worked, either by award or by contract.
  • FIFO locations: An employer has the power by contract to set the location of your fly in and fly out departures and returns. For this reason, you should ensure that the departing and arriving locations are convenient for you, as reflected in contract. You should also consider whether an employer has reserved a right to change the location.
  • Rosters and hours: An especially pertinent issue to FIFO workers are their rostered hours and work schedules. It is not out of the ordinary for an employer to have schedules of 4/1 (4 weeks on, 1 week off) or a 28/7 (28 days on, 7 off). Before signing a contract, you should negotiate a schedule which you believe accommodates you and your family’s interests and one which you believe can be sustainable.
  • Your rights during industrial action: Where FIFO workers wish to strike to negotiate better terms while on location, the issue may arise that they are dependent on the employer providing them accommodation. Under s470(1) of the Fair Work Act, an employer must not ‘make payment’ to their employees during a time of industrial action or strike. Importantly for FIFO workers, the High Court has interpreted ‘payments’ in a limited sense as to only include payments of money. The effect is that FIFO ‘benefits’ cannot be used as a bargaining chip to ensure that no employee goes on strike. As the court in Mammoet Australia (CFMEU v Mammoet Australia Pty Ltd [2013} HCA 36) held, this meant that FIFO workers could not be stripped of their accommodation during the period in which they initiated action. For this reason, it may be beneficial for your employer to provide you with accommodation as a term of the contract rather than providing remuneration for you to purchase your own.
  • Costs of travel: It is possible that your contract makes you financially responsible for getting to the place of work. Even though you may receive a greater wage in return, you should consider that a recent Federal Court decision has held that these travel costs, whether paid by employee or employer, are not a class of costs that are tax deductible (John Holland Group Pty Ltd & Anor v FCT [2014] FCA 1332). Even if your employer pays for the travel costs, you should ensure they are not trying to offset these once deductible costs by paying you a lower wage or removing some other benefit. You should therefore compare your proposed contract with others prior to 2014 to see if the decision has had any effect.
  • Rate of pay: It will be to your benefit to negotiate a higher wage when considering an employment contract. In doing this, you should familiarise yourself with the industry standard to ensure that your contract and wage accords with ordinary practice. Depending on which industry you intend on entering, there may also be mandatory loadings on your rate of pay for certain worked performed or for the hours in which it is performed. For example, drilling and prospector work entitles the employee to an additional percentage of their standard rate under the Mining Industry Award. Awards may also require additional payment for hours worked over a set weekly limit, or for hours worked outside of standard hours, according to the position or role you have taken. In this regard, you should ensure that your contract of employment correctly characterises the role to be performed and how and when shifts are to performed. In having regard to any applicable Award bear in mind that modern awards are only indicative of the minimum to be paid in a legal sense. Industries that employ FIFO workers usually pay higher rates to reflect the unsociable nature of the work. You should make sure that you understand the current market trend for your industry and for your role so that you can more accurately negotiate your contractual rate of pay.

Am I a contractor or employee?

An employee is a person who is employed under contract to work exclusively for the company for a fixed or indefinite term. A contractor is someone who takes on a contract to do one specific task or tasks over a period of definite time. Usually, your contract will specify the status under which you are to be engaged, however that is not conclusive. It is possible for an employer to attempt to represent the relationship as one as contractor where an employee-employer one truly exists in order to circumvent certain benefits which would otherwise accrue. The Fair Work Act 2009 is no help in this regard; it provides no definition. Rather, you must look at the characteristics and nature of the relationship to ascertain your status. In doing so you must ask:

  • Do I have control over how my work is to be performed? If no, it is more likely I am an employee.
  • Do I have to wear a uniform, or some form of company association? If yes, it is more likely I am an employee.
  • Do I bear the risk of profit or loss? If no, it is more likely I am an employee.
  • Can I work elsewhere? If no, it is more likely I am an employee.
  • Am I responsible for my own insurance from injury? If no, it is more likely I am an employee.
  • Do I receive a wage, or am I paid per task? If wage, it is more likely I am an employee.
  • Can I delegate tasks to other people I choose or sub contract? If no, it is more likely I am an employee.
  • Am I required to supply and maintain my own tools? If no, it is more likely I am an employee.
  • Is tax deducted from my wage (not including super)? If no, it is more likely I am an employee.
  • What does the contract say I am?
  • Is holiday pay or sick leave given? If yes, it is more likely I am an employee.

What is the difference?

The distinction is important. The relationship of employer/employee is governed by the Fair Work Act 2009. Only an employee can be covered by industry awards or enterprise agreements which may provide specific benefits to FIFO workers, tailored to the industry in which they work. The Fair Work Act also provides employees with a safety net of minimum entitlements, including minimum wages, sick leave, annual leave, long service leave, maximum weekly hours, redundancy pay and notice on termination of employment. Further, if an accident occurs on site, an employer will be vicariously liable for the employee’s mistake and the damage that may ensue, whereas a contractor is liable for the damage she/he causes. Also, workers compensation is generally limited to employees.

Contractors, by contrast, have fewer statutory protections. There is, for example, no unfair dismissal remedy for independent contractors other than what is provided in their contract of engagement. Contractors do have the advantage of remaining flexible and open to providing a variety of work to a variety of clients rather than being tied down to the one employer.

What should I do before accepting work?

Bearing in mind that these rights may be especially important to you and to your family, you should ensure that a FIFO contract aptly reflects your desired status. In doing so, you should not only ensure that the contract description spells out that you are to be an employee, but also that the terms and conditions are drafted in a way that indicate the existence an employment relationship. You should also ensure you sign the employment contract in Australia so as to attract Australian employment law jurisdiction.