Do you have all of your employment contracts in writing?
Even though a ‘contract of employment’ does not have to be in written form, employers who do not put the terms of the employment in writing do so at their peril.
The biggest benefit of having an employment contract is that it provides a formal (and legal) record of both parties’ expectations and agreements at the time of hire.
Please see the checklist below for a list of terms that should be covered in the Employment Agreement.
Issues specific to the industry of employment or business of employment:
When drafting an employment agreement, it is likely undesirable to use a ‘pro-forma’ employment contract. Industry specific agreements should be drawn up to manage the actual employee/employer relationship as it will exist once the staff member is hired. No matter how an employment agreement is formed it must always be remembered that minimum employment conditions are dictated by awards or the Fair Work Act (2009) which must be followed when businesses engage employees.
If you are unsure of the statutory compliance requirements of employment, please contact Butlers Business and Law and we can assist you.
The following issues should be addressed when formulating an employment contract:
Disciplinary policy:
It is invaluable for you and your employees to have a formal disciplinary policy. This creates certainty for all parties of the process to be followed when managing employees that demonstrate wrongdoing in their business dealings.
As an example, an employee could agree, through their employment agreement, to receive a verbal warning, a written warning, and/or a performance improvement plan before termination.
Another policy could outline serious infractions for which immediate termination can result.
Harassment or discrimination policy:
It is important to have this policy in your employment contract to protect your employee from workplace harassment or discrimination.
It is crucial for your employees to feel comfortable and safe in their work environment. There are significant consequences if such policies are broken.
For example, in the case of Nikolich v Goldman Sachs
The court awarded Mr Nikolich over half a million dollars in compensation for the breach of contract.
Confidentiality policies and agreements:
Ensure your definition of; confidential information’ and the period during which the confidential information is prohibited from disclosure is both clear and concise. Specifically, you should clarify who can approve the disclosure and how (i.e. approval in writing).
If you have Intellectual Property that you wish to register, it is advised to obtain legal assistance in order to draft non-disclosure agreements. This way if you have to disclose information before it’s registered, it will be protected from the use of others.
Checklist
The following is a general list of terms that should be included in a written employment agreement:
- The names of the employer and employee
- The date when the employment began
- The date when continuous employment began
- Terms relating to pay and the intervals at which the employee will be paid (e.g. weekly or monthly).
- Hours of work
- Holiday entitlement
- Entitlement to sick leave, including any entitlement to sick pay
- Pensions and pension schemes
- The employer’s and employee’s entitlement to notice of termination
- Job title or a brief job description
- Where employment is not permanent, the period for which the employment is expected to continue, or if employment is for a fixed term, the date when it will end
- Either the place of work or, if the employee is required or allowed to work in more than one location, details of their location arrangements
- Details of the existence of any relevant collective agreements which directly affect the terms and conditions of employment
- Details of disciplinary and grievance procedures
- The agreement should set out the ownership of intellectual property rights between the employee and employer, for example whether or not the intellectual property rights stay with the employer once term of employment is over.
If you want to fine tune your employment policies and agreements to ensure efficiency in your business, contact us at Butlers Business and Law on (02) 4929 7002 or fill an enquiry form out on our website www.butlers.net.au/contact
