Australia: 5 reasons to get your employment contract checked by a lawyer

Last Updated: 23 November 2016
Article by Mark Cox and Joanne Knoth

Good employment contracts are essential to the success of any business and care is needed to ensure they comply with various applicable industrial laws. The employment contract is an agreement between an employer and an employee that sets out the obligations and rights of each party. This contract can take on different forms depending on the nature of the business, the relationship between the parties, and the responsibilities and rights each party sought to create. Even if there is no written contract, the law will imply one. Therefore it is better to have a written contract setting out clear terms suited to the needs of your business.

Certain conditions need to be met in order for the employment contract to be complied with and be recognised under the law. There are many elements both employers and employees must consider to protect themselves. Having the contract checked by a professional employment law firm is the best way to ensure that everything is included.

ENSURING MINIMUM STANDARDS ARE MET

An employment contract must comply with the minimum conditions set out in the National Employment Standards (NES), which outlines the 10 minimum entitlements that have to be provided to all national system employees. The contract must also comply with awards, enterprise agreements or other registered agreements that apply.

An employer must ensure that they are aware of their legal obligations. Specifically, it is important to know whether the employee is covered by a national or WA award and to ensure compliance with pay rates and other obligations that the relevant award requires. Other things that need to be considered include:

  • The basis of employment (ongoing, fixed-term or casual)
  • The amount of notice required by employers and employees to end the employment relationship
  • A provision covering the status of company policies in the relationship
  • Hours of work and leave entitlements

The best way to protect your business as an employer and to protect your rights as an employee is to have an employment lawyer check the contract. These professionals have extensive knowledge of the law and can ensure minimum standards are met.

PROFESSIONAL SCRUTINY

Employment law is complex and ever-changing, with different standards applying to businesses depending on factors such as their size, industry, scope of operation and geographical location. A contract needs to be written with the needs of both parties in mind and needs to meet the minimum requirements. Therefore, there is a lot to cover.

Employers and employees often endanger themselves with oversimplified, generic contract templates downloaded from the internet. These can be out of date and exclude important elements for establishing the terms of an employment relationship. A good contract that caters for the specific needs of both parties is vital for the success of the business and to a mutually beneficial employment relationship.

An employment lawyer can advise you about what terms should be included in a contract for your specific situation, and scrutinise every line to ensure it is legally compliant. MDC Legal is a Specialist Employment Law firm, who can draft and help implement a contract tailored for your business and the specific role.

TERMINATION AND REDUNDANCY

Courts, commissions or tribunals will often review the employment contract when determining whether a termination or redundancy was conducted in accordance with the employment contract, and whether it was fair. Both parties should protect themselves by ensuring the terms about termination and redundancy are clearly set out and are reasonable.

An employment law firm, like MDC Legal, can provide you with advice to ensure these terms are suitably drafted with all things considered.

REVIEWING RESTRAINT OF TRADE CLAUSES

Employees and contractors often occupy a position of privilege and power by virtue of their role, due to their knowledge of a business's confidential information, processes, procedures, client information, trade secrets and intellectual property. That may give rise to fiduciary duties on the part of the employee.

Restraint of trade, non-competition or non-solicitation clauses seek to prevent employees from soliciting and poaching clients and other employees as well as prevent disclosing sensitive information. Sometimes in certain cases, such as where the employee is the face of the business, a restraint may also prevent them from competing with the business after their employment. Only in certain circumstances will a non-compete clause be enforceable. In all cases, restraint clauses have to be carefully tailored to the protection of legitimate business interests, otherwise they are not enforceable. If the restraints are cast too widely, even though they may cover a legitimate interest, they might be held unenforceable, and there is no protection. That is why expert legal advice is so crucial.

The law around restraint of trade clauses is very complex. The kind of restrictions that should be established and how the clause will be interpreted and enforced will depend on the business and the role held by the employee. Legal advice is vital in order to get this aspect of the employment contract right and avoid problems later.

EFFECTS OF RECENT CASE LAW

Employment law is also affected by case law that evolves day by day, something that can often go unnoticed by employers and employees when drafting and reviewing an employment contract. An experienced law firm will be up to date on recent employment case law and can provide advice about how it affects the terms outlined in your employment contract.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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