A Guide To Employment Contracts in Australia

A Guide To Employment Contracts in Australia - HR Blog - HR Expertise

Employment contracts ensure that the employees have complete security of working in a professional business that clarifies its terms and conditions to the workers. Therefore, it is essential to communicate the obligations and the requirements of the job clearly. In Australia, however, a written employment contract is not mandatory. Nonetheless, the importance of one still stands.


Without an employment contract, many disputes can arise between the employee and the employer regarding the terms and conditions of the job. Again, an employment contract acts as a guide for the employee-employer relationship, and it is only a matter of time before the absence of it causes issues. With that being said, it is to be remembered that there is no employment contract that fits all.


Every business has its own terms and conditions and requires different jobs from workers. So, it is important that before you draft an employment contract, you keep in mind a number of factors regarding your business.


Some of the things that you can factor in are as follows – 

1. The essential details of the type of work required

2. The terms and conditions of the job

3. The responsibilities of the employee

4. The restrictions that the employee will be bound by


A number of examples that can help you draft an employment contract are mentioned above. An employment contract is affected by these factors and may change between jobs.


Is An Employment Contract Essential? What Is Its Importance?


Lawfully, there is no obligation to have a written employment contract. The law only requires that the terms and conditions of the job should be communicated clearly between the employee and the employer. There is no obligation on the terms and conditions being in verbal form or written. Mainly because of this, a lot of businesses in Australia do not use written employment contracts.


However, this doesn’t decrease the importance of written employment contracts. Verbal employment contracts may save you some hassle, but they can prove to be quite unhelpful when a dispute occurs between the employee and the employer regarding the terms and conditions of the job. In most employee-employer disagreements, the terms and conditions are the centers of the dispute.


To avoid this, it is important that even small businesses have their own employment contracts according to their needs and requirements. Contractual binding employee relationships are easier to handle when a dispute occurs since the terms of the job are communicated clearly.


Legislation such as the Fair Work Act lays down a number of rights of the employee but has very few obligations that the employees are bound by. So in many disagreements occurring, the employees can challenge the agreement on the basis of a verbal contract. When factors such as the commencement date, employer, hours of work, remuneration, and notices are explicitly agreed to by both employee and the employer, there is little injustice to be done when a dispute occurs.


What Is The Right Kind Of Employment Contract For You?


As stated earlier, there is no employment contract that fits all. Each business differs in the type of work it requires, the hours of work, and most other factors. So, it can be difficult to get an employment contract exactly according to your needs. What you need is tailored employment contracts without any vagueness that can let the potential employees know their roles and responsibilities.


When drafting an employment contract, it is essential that you include everything that you need the employee to know. If there is something missing in the employment contract, it will be difficult to somehow prove that it was a part of the contract when a dispute occurs.


In order to tailor an employment contract according to your needs and requirements, you can consider the following factors.

1. What are the minimum conditions and entitlements according to the role you are offering?

2. What is the nature of the offered role? Full-time, part-time, or casual?

3. Is the role in question just for a specific project, or is it permanent?


All of these factors affect how to go on about a job, the resignation, the termination, and the actual working of the job. Significant implications can occur when these factors change.


What Should An Employment Contract Include?


All the basic terms and conditions of the employment are included in the employment contract. The essential details that a potential employee must know are all part of the employment contract.


The essential details may include the following –

The details of the job, such as the nature, the remuneration, the working hours, the leave entitlements, and the reporting of work, should all be included in an employment contract.

An employment contract should clearly indicate the expectations from the employee and how the employee would work, and their role in the company.

 Restrictions and prohibitions that bind the employee should also be added to the employment contract so that the employee can abide by the company rules.

 The way the company protects its commercial information and strategies, intellectual property, and confidential information should also be clearly communicated to the employee through an employment contract. This is one of the essential things as the majority of employee-employer disputes occur on the basis of commercial interests.

 The way that the employee will be able to get the employment relationship terminated should be stated in the employment contract. Areas such as notice of termination, payment in lieu of notice, and misconduct should be touched upon in the employment contract.

 The employment contract should also state the post-termination obligations of the employee.


Australian law does not require written employment contracts; however, it is important that in order to avoid ambiguity and vagueness, a clear and concise employment contract is signed before the employment relationship starts. It is helpful to both the employee and the employer during the employment period and aids in solving the disputes that may occur between workers and employers. At HR Expertise, our HR Consulting services in Melbourne and across Australia can help. Contact us today for assistance.