Contracts Of Employment

It is important for employers to provide their employees with a written Contract of Employment.  Contracts of employment are applicable for Award covered employees and for Award free employees, e.g. Accountant, Senior Management, etc).

Why have a written Contract of Employment with your employees?

The Contract of Employment states in precise and clear detail, the terms and conditions of employment that will apply for the employer and the employee.  The Contract details the entitlements and obligations of both parties.  It reduces ambiguity and misunderstandings between the employer and the employee.

The Contract of Employment reflects the understanding reached by the employer and the employee upon commencement of the employment and when reviewed reflects changes that may occurred during the employment. 

When should an employer review their existing Contracts of Employment?

Contracts of employment should be reviewed on a regular basis to ensure it meets the minimum standards and amendments of the Fair Work Act, Awards and relevant legislation.

An example of where a Contract of employment is inconsistent with the Fair Work Act is where a Contract of Employment might provide for one month’s notice on termination.  Whereas the Act may state that the minimum notice to be given to an employee is five weeks’ notice.  It is open to the Courts to determine the appropriate period of “reasonable” notice as the Contract of Employment is inconsistent with the Fair Work Act minimum requirements.  An additional 3-12 months may be decided as reasonable notice depending on the length of employment and senior position of the employee.

Moreover, an employee’s position, duties, rate of remuneration and conditions of employment will have changed during their employment.

It is important for Contracts of Employment to provide for flexibility to meet the demands of the company and the employee.

Craven and Associates prepares Contracts of employment including:

• Full Time
• Part time
• Casual
• Maximum term

What should a Contract of Employment cover?

Contracts of Employment include the following provisions, but are not limited to: –

Type of employment, Rate of pay, Leave entitlements, Hours of Work, Overtime, Notice provisions, reference to Policies, Superannuation, location, employee obligations, etc

It is recommended for employers to audit and review their current Contracts to ensure they are compliant and reflect the current understanding of the employer and employee.