How to Create Good Employment Contracts for Small Businesses

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Australia does not mandate that employment contracts to be in writing. Some Modern Awards or Enterprise Agreements do require employees and their employees to agree to certain things in writing, such as minimum part time hours of work, days and times when work will occur and flexible work arrangements. However, in general there is no overarching statutory obligation for working arrangements to be recorded in writing.

Importantly, it does not mean that a contract of employment is not required. It simply means that the contract of employment does not need to be recorded in writing.

An official employment contract serves to safeguard both the employer and the employee. Conflicts about the terms and conditions of work are likely to occur in the absence of a documented employment contract. When there are no employment contracts in place to govern the job relationship, employers frequently struggle to deal with their employees.

A ‘contract’ is simply any promise, or binding agreement between two parties that has the four essential elements of a contract. Those key elements are:

  • There is an offer;
  • There is acceptance;
  • There is an intention to create a binding legal relationship; and
  • There is consideration (in other words, the contract involves an exchange. In the case of employment, the exchange that occurs is labour in exchange for a wage).
  • The essential elements of a contract can be achieved through either a verbal or written agreement.

There are three crucial questions you should ask when creating a contract,

  1. Is the position covered by a contract or award?
  2. Is the position full-time, part-time, or casual?
  3. Is the position for a set period of time or a specific project?

Is it alright to NOT have a contract?

While this is not unlawful (unless there are specified things that must be agreed to in writing by an Award or Enterprise Agreement), it poses a serious danger to any employer, especially if a disagreement were to develop later on in the employment relationship. In this sense, a written contract of employment should be seen as a crucial source document that can explicitly state what was agreed to in the beginning.

Employment contracts can include a range of terms, provided what is being agreed to is not inconsistent with the law, or a minimum term of an Award or Enterprise Agreement.

What should I include in my contracts?

At their most basic level, employment contracts should contain the following:

1. The parties:

Who is a party to the contract.

2. The position:

What position has the person been employed in?

3. Payment terms:

Of course, payment conditions are essential to creating an employment contract. These conditions should outline the agreed-upon sum, the frequency of payments, and the conditions under which the sum may grow. The agreement should clearly state what is included in the payment if it includes other sums (such as a set rate or salary).

4. General Terms relating to the National Employment Standards:

It is crucial to record the general terms of the engagement even though many of these may already be covered by the law. This should include information such as the employee’s regular working hours, applicable leave benefits, and the amount of notice needed to end the employment contract by either side.

Employers may also choose to add additional terms that are pertinent to their business or sector in addition to the ones listed above. These could include non-disclosure agreements or stipulations restricting trade or employment activities post-employment. These need to be carefully drafted, but they are frequently crucial to safeguarding the company both during and after the employment period.

Important to Remember:

  1. An employment contract is likely to exist whether its written down or not.
  2. The interests of both parties are best met by having a written contract of employment.
  3. Contracts should include some key terms, but should also reflect the specific interests of the business.

If you require further assistance in drafting employment contracts for your business, contact Clyde Industrial today on 1800 954 696.

Do you need further assistance in drafting employment contracts?

We’re ready to help you.

info@clydeindustrial.com.au

1800 954 696

10 Must-Have Policies for a Happy and Well-Operated Business

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Employers often use workplace policies to govern employee performance, conduct, and behavior as well as to establish minimum standards. To comply with the pertinent laws, there are certain rules or procedures that must be followed.

According to the many Work Health and Safety Acts in place in Australia, for instance, employers have positive health and safety obligations to those at their job. Every organization must thus have processes in place to carry out and keep track of those commitments.

1) Work Health and Safety

A written, published and regularly updated general health and safety policy is an essential minimum standard for most small businesses.

Workplace accidents can have a negative impact on your company in a number of ways, including reduced productivity, the need to pay sick leave, and the expense of hiring a replacement. WHS regulations emphasize safety protocols and each employee’s duties to maintain a safe workplace.

All employees should be made aware of such a policy and be provided with a copy. This should occur each time the policy is updated.

Read More About Workplace Health and Safety Policies Here

Other Workplace Policies

2) Bullying and Harassment

The company must demonstrate that it has taken all necessary precautions to guard against discrimination or harassment in order to reduce the risk of litigation. However, this is practically impossible without a thorough policy!

3) Annual Leave and 4) Sick Leave

A leave policy can be quite beneficial for firms that go through seasonal busy times. To avoid being understaffed, a leave policy can account for appropriate coverage protocols and policies during peak times with longer notice periods for employees requesting leave.

5) Code of Conduct

Setting the expectations for your employees’ behavior through a code of conduct is crucial. A code of conduct will cover topics like appropriate attire, cell phone usage, timeliness, and using business property.

6) Social Media and Internet Usage

A social media strategy is necessary to safeguard your business’s reputation, especially if staff members post information about their work on their pages. It is a good idea to let employees know that their online conduct will be monitored because the distinction between personal and professional networks on social media can become hazy.

7) Drug and Alcohol Policy

Drug and alcohol use both during and after work hours can pose serious safety issues and cost your company money in the form of accidents, absenteeism, and lost productivity. A drug and alcohol policy can outline a company’s rights to conduct drug tests on employees while also promoting and maintaining a risk-free workplace.

8) Performance and Misconduct and 9) Disciplinary Policy

Any organisation will regularly manage performance, but it may frequently be a delicate task. A policy will help you stay in compliance with the demands of procedural fairness and give instructions on how to handle inappropriate behavior.

10) Anti-Discrimination and EEO

There is no place for discrimination in your workplace. Your policy should stop unlawful behaviour before it takes hold. While behaviour that is against the law is the responsibility of a person, employers have a statutory duty to proactively eliminate behaviours in the first place and maybe vicariously liable for the actions of their employees.

It can be extremely difficult to attempt to reprimand employees for violating company policies when those regulations are not documented, widely distributed, or easily accessible. Therefore, any company should make establishing a strong set of policies and procedures a priority.

Do you need advice with your workplace policies?

We’re ready to help you.

info@clydeindustrial.com.au

1800 954 696