How to write a good employment contract?
An employment contract is an agreement between the Employer and the Employee that sets out the terms and conditions of employment. It can be written or verbal, but a clearly written contract will assist both parties in understanding their rights and responsibilities, and it will also protect your business, for example through confidentiality and intellectual property terms.
When drafting a letter offering employment together with an employment contract it is useful to have them professionally reviewed by a Human Resources professional to ensure that the terms and conditions are sufficiently clear, and not in breach of legal minimum requirements.
What to include in an employment contract?
As a bare minimum, your employment contract must provide the Employee with their minimum legal entitlements. These can be found in the National Employment Standards, and in the relevant industry instrument (Award or Enterprise Agreement). All employees are covered by the National Employment Standards, regardless of whether they have signed an employment contract. A contract cannot make any employees worse off than their minimum legal entitlements. As an Employer, you can always choose to provide more generous terms and conditions.
Every employment contract is unique and must reflect the specific employment relationship between the Employer and the Employee. To ensure that you have a comprehensive employment contract, you should consider including the below-mentioned points:
Name and personal details both of the Employer and the Employee who are entering into this contract
Commencement date of employment
Probation period (if a permanent employee).
Job title and role description attached as an additional appendix
Type of employment
Place of work and hours of work
Reporting lines
Remuneration clause
Leave entitlements
Clause referring to employer policies and procedures
Clauses referring to essential requirements of the role such as minimum training, clearances, registrations, visas
Clauses protecting employer property and information
Non-disparagement clause preventing the employee from any action which can reflect negatively on the company
Notice Period
Termination Conditions
What not to include in an employment contract?
You should never include anything in your employment contract that is contrary to law or an applicable instrument, that is discriminatory, ambiguous, vague, contradictory, or confusing. The employment contract cannot contain terms that are less than the minimum standards as set out in the National Employment Standards, an applicable industrial instrument (Award or Enterprise Agreement), or other employment-related legislation.
