An employment contract or agreement fundamentally covers the working relationship between an employer and an employee. A well drafted employment contract provides all parties with a clear understanding of their obligations and understanding of the terms of employment. It may sound surprising, but there is no obligation under law to have a written contract of employment.
However, a well written employment contract or agreement provides certainty and removes ambiguity if there is a breakdown in the relationship between the employer and employee. A verbal or poorly drafted document invites disputes in relation to the terms and conditions of employment that can have unforeseen consequences for your business. For example, where there is no written contract there will likely be no clauses dealing with confidentiality, notice required to be given by employees if they wish to resign or restraints of trade which could expose your business to significant losses and damages with no contractual provisions to rely upon.
Choosing what to include and what to leave out of an employment contract can be a tricky exercise. Amongst other things, it should provide a clear outline of the employee’s classification, duties and responsibilities, remuneration, leave entitlements and may also deal with certain other important matters including:
- Ownership of intellectual property created during employment, and
Employment contracts must not include clauses that are contrary to industrial laws or instruments, as these will be unenforceable. The National Employment Standards are minimum entitlements that cannot be contracted out of by employers and there are significant penalties for contraventions of them.
Your employment contract may also refer to a Modern Award or Enterprise Bargaining Agreement.
Modern Awards are legal documents that apply to over 100 industries that outline minimum rates of pay and conditions of employment. Employers cannot contract out of provisions of Modern Awards as they are minimum employment conditions, nor can a Modern Award offer terms less favourable than the National Employment Standards.
Enterprise Bargaining Agreements
For large corporate entities, terms and conditions of employment may also be governed by an Enterprise Bargaining Agreement. These types of agreements are most common to cover specific circumstances or conditions relevant to that employer. Enterprise Bargaining Agreements are not allowed to offer conditions that are less than base standards contained in the National Employment Standards.
- Speak with one of our Employment Lawyers to ensure that your contracts are drafted with clarity and precision.
- Obtain advice from our Employment Lawyers in respect of the protection of your confidential information, restraints of trade, overpayments and the management of staff behaviour and conduct.
- Regularly review and update your employment contracts or agreements.