What is an employment contract?
An employment contract is a legal agreement between an employee and employer that sets out conditions for a job. To protect workers, every role has a minimum government-legislated requirement set out in the National Employment Standard. Conditions in an employment contract must be equal or above the NES and other industry awards and enterprise agreements. Information about these regulations can be found at www.fairwork.gov.au.
What should an employment contract include?
A properly drafted and legally enforceable employment contract should include:
- Job title and description;
- Remuneration including salary and bonuses;
- Start date and probationary period;
- Termination and redundancy;
- Place and hours of work and equipment provided;
- Holidays, sick leave and other leave entitlements;
- Policies, restrictive clauses and rights.
Does an employment contract need to be in writing?
An employment contract can be verbal, but it must still adhere to legislated regulations. An employee will still be entitled to the minimum National Employment Standard, industry awards and enterprise agreements. Make sure you keep copies of any correspondence entered into in relation to the employment contract, so you have some form of evidence as to what has been agreed upon.
Can an employment contract be voided?
An employment contract can be voided if a mistake has been included, contains false information, has been signed under duress, one of the parties has undue influence over the other or is unfair and one-sided.
When does a breach of employment contract occur?
A breach of contract occurs when either party named in the contract does not adhere to its terms and conditions. For an employee, not providing required notice when leaving a job, poaching clients and divulging confidential information are all examples of a breach.
An employer can breach the contract by expecting an employee to do work that isn’t set out in the job description, not providing agreed leave entitlements or terminating employment without notice.
What happens if an employment contract is breached?
If either party does not adhere to the terms and conditions of an employment contract, they can be sued for damages suffered or losses incurred.
Do I need a lawyer if I am accused of breaching my employment contract?
You will need an experienced employment contract lawyer for the best possible outcome if you are accused of a breach and sued. Employment contract laws are continually changing and complex, so it is best to have an expert on your side.
Should an employee seek legal advice before signing an employment contract?
Make sure you review your employment contract before you sign on the dotted line. It can be beneficial to seek legal advice if you are unsure of the terms and conditions or if you want to negotiate a better contract.
Our Employment lawyers can review your contract and make you aware of any issues so that you are informed and able to negotiate a better deal. Redundancy entitlements, weekend loadings, overtime, annual leave and notice of termination are a just few things that need to be considered.
Some employment contracts can be one-sided and favour the employer. While many people think they need to sign the contract without questioning anything to get the job, it is important to know exactly what you are signing.
Your job description needs to be clear and concise, so you know exactly what your role will be. You need to know where and when you will be expected to work and what equipment will be provided to do the job.
For the layperson, employment contracts can be confusing and hard to understand. Don’t just read it and assume everything is above board. Seek legal advice so you know you can negotiate the best deal possible and you have the job security and the entitlements you deserve.
If your employer is not providing the correct entitlements, you may have grounds to sue for losses incurred.
Why does an employer need a well-drafted employment contract?
For employers, a comprehensive employment contract is needed to protect your commercial interests. It can prevent employees, past and present, from using your confidential information without consent. This information includes customer and supplier lists, research and development, trade secrets, market studies, business acquisition plans, technology and more.
It can also protect you after an employee leaves your organisation by preventing them from working in direct competition for a set period or from soliciting your clientele.
The only way to protect your business in the future is to include these restrictive clauses in your employment contract.
An employment contract also provides clear guidelines of what is expected of you and your staff moving forward.
To avoid possible legal action by an employee in the future, for example, for losses incurred for failing to pay the minimum wage or providing entitlements, your employment contract must meet or exceed the National Employment Standard.
We have all heard about employers being forced to reimburse thousands of dollars in back pay for not paying the minimum wage, overtime or loadings. And whether these underpayments were intentional or an oversight, most businesses can ill afford an error of this magnitude. It is in your best interest to make sure your business adheres to and is aware of its requirements.
Using a template or re-using an old employment contract can pose a risk as they may not adhere to current regulations or requirements. This could void your contract and leave your business vulnerable to legal action.
It is best to leave the drafting of an employment contract to the experts, so while you are busy looking after your business's day-to-day running, you can rest assured you will have everything in place when you put on a recruit or promote someone within your business.
To protect your business and ensure your employment contracts are legally binding, up-to-date, and enforceable, make an appointment with one of our Employment Law solicitors today.
We are here to help
Our solicitors specialise in Employment Law and represent clients throughout the Hunter, Newcastle, Sydney and across the Central Coast. We have the experience to guide you through often complex workplace issues from beginning to end to ensure you get you the best possible outcome.
If you have a workplace issue or dispute, call one of our Employment law specialists on 1300 529 444 or submit a contact form to arrange a case assessment with one of our solicitors today.
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