Private Practice
- Text Decrease
- Text Increase
- Print Page
Employment Contracts
Parties to an employment contract should clearly understand the difference between an employer/employee relationship and that of an independent contractor. Below is a list of matters that need to be addressed in relation to an employment contract that is an employer/employee relationship.
If the employee is covered by the terms and conditions of an Award then a common law employment contract cannot legally undercut any of the terms and conditions contained within that Award.
An Australian Workplace Agreement (AWA) is a form of employment contract that could become a substitute when an Award would have otherwise applied, but can in certain circumstances, trade off one or more Award entitlements as long as such trade off passes the federal government’s Fairness Test.
-
Parties to the contract – name of the employer and name of the employee. This will probably be in the form of a Letter of Appointment;
-
Specification of the work to be done – perhaps as a job description or duty statement. This may be attached as an Appendix;
-
Duration of the contract – especially where the employment is not intended to be ongoing or indefinite – e.g. a replacement employee whilst the regular employee is on maternity leave, or employed until a particular task is completed;
-
Notice required by either party to terminate the employment as well as a penalty for either party failing to give the required notice[1];
-
Remuneration – specify what this is comprised of, including: annual salary divided into equal instalments; fixed hourly rate; bonuses; fringe benefits. If the level of pay is significantly greater than the minimum award rate then the contract may specify that this rate includes overtime, shift allowance, penalty rates etc.;
-
Remuneration – other matters to consider should include a set periodic review to adjust the remuneration;
-
Specific employment conditions e.g. which days to be worked, start and finish times, how overtime is to be paid, how public holidays are to be treated whether worked or as time off.
-
Annual Leave and Sick Leave; whether these accrue and are taken as paid leave; or whether they are included in the hourly rate and deemed to be paid in advance as casual employees are.
-
Professional development, including attendance at seminars and conferences;
-
Ownership of intellectual property
[1] Section 661(2) of the Workplace Relations Act specifies the minimum amount of notice that an employer must give to an employee or in the alternative they may pay the employee an equivalent amount in lieu of notice. The Act imposes no reciprocal obligation upon an employee to give notice, hence the contract ought to contain such an obligation on the employee. Such a provision does apply where the employee is covered by the Award and a sanction imposed for failure of the employee to give notice.
