Do you have written up to date contracts of employment with all your employees? Are they signed by the employee and stored in a safe and readily available location? If not, it is time to get your house in order.
Many people believe that if they do not have a written or signed employment contract, they are not bound by a contract with their employer at all. This is a common mistake, as an employment contract exists the moment the employer and employee agree on terms of employment, whether written or not. The contract terms can be either express, that is written or verbally agreed, or implied by fact or law, or a combination of both. However, the obvious benefits of having a written contract of employment are to ensure there is a clear understanding between the parties of the terms of the contract. The contract of employment is the legal foundation of the employment relationship which defines rights, obligations and expectations between the parties, and should act as the foundation of any good employment relationship.
There is no prescribed form that an employment contract must follow. Generally, the nature and specificity of a written employment contract will vary depending on the seniority and duties of the employee, and whether they are covered by an industrial instrument such as an enterprise agreement or Modern Award.
Ensuring that all bases are properly covered when preparing contracts of employment can be difficult. As a starting point, we recommend that employers think about the following matters carefully to guide their contract creation and administration procedures:
- Establish a standard contract template that can be tailored as appropriate;
- Nominate a person authorised to amend and issue contacts;
- Ensure contracts are signed and returned by the employee prior to commencing employment;
- Issue updated contracts when employee’s change position or other significant changes in terms and conditions occur;
- Ensure that any variations are agreed in writing and kept with the original employment contract; and
- Review contract templates regularly to ensure changes in law are reflected, and compliance with minimum legislative and modern award requirements is being maintained.
Finally, while it may sound trivial, it is important that contracts of employment can be easily located when required. We often hear from our clients that they cannot locate the relevant signed employment contract or variation letter signed by the employee. This can create enormous practical problems for the organisation. It is vital for all employers to establish reliable and secure processes for maintaining, retaining and recovering essential employment documents.
Please contact our office if you wish to discuss the review of your contracts of employment and/or whether you require a contracts of employment package.
This timely tip is not intended to constitute, and should not be treated as, legal advice.
This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please also note that the law may have changed since the date of this article.