Are Your Contracts of Employment Compliant?

According to the Fair Work Ombudsman: an employment contract is an agreement between an employer and an employee that sets out terms and conditions of employment.  A contract can be in writing or verbal.

I’m sure during your career you have come across a variety of different contracts from a 1-page letter to a 10-page document with added schedules.

Contracts of employment generally consist of 3 fundamentals:

• The agreement must offer a person employment under T&C’s and for the offer to be accepted.
• There is a trade of value. The employer will pay a salary for the employee’s time and skill set.
• The agreement is entered into freely.

T&C’s of contracts can be negotiated at the time of job offer however, you need to keep in mind that some T&C’s are governed by law and cannot be changed.

Here are KBA’s top tips when creating a contract of employment for employees.

The Do’s

• The name of the employee, employer and trading entity.
• What both parties will provide in the agreement. g. salary, hours of work etc.
• Status of employment.
• Employment restrictions.
• Probation period.
• Tool of trade
• Restraint of trade clause
• Bonus or commissions

The Don’ts

• Putting restrictions or removing an entitlement under the NES or applicable Modern Award.
• Enforcing a working week that is more hours than the relevant Modern Award with paying the applicable penalties.
• Under paying employees in line with the relevant Modern Award.
• Not paying the legislative minimum superannuation.
• Having a probation period longer than 6 months. The only exception to this is for small businesses who have a maximum probation period of 12 months.

If you need assistance in creating contracts of employment that are easy to read and compliant, call Key Business Advisors on 1300 4 ADVICE.