It is often difficult for employers to implement new employment contracts for existing employees, particularly when employers are seeking to make changes that are for the benefit of the business.

Sometimes employers are unaware that their employment contracts do not provide the business with enough protection, and, when this is discovered, employers don't have a mechanism to require employees to sign a new, improved employment contract.

Worse still, some employers don't have written employment contracts, thereby creating an oral employment contract – and the employee and the employer will almost certainly have different views as to its terms.

The good news is that pay review time is a perfect trigger for employers to implement new employment contracts.

It is perfectly acceptable for employers to make any pay increases or additional benefits subject to the employee signing a new employment contract. From the employer's perspective, implementing new employment contracts have the following potential benefits:

  • clarifying employee obligations where there appears to be lack of clarity in practice
  • increasing the employer's flexibility to change position titles, reporting lines, location and hours of work
  • ensuring confidentiality and intellectual property is protected
  • ensuring compliance with Awards and National Employment Standards (e.g. providing that domestic violence leave now applies)
  • clarifying important renumeration details such as annual salaries or casual loadings, offsetting other entitlements
  • removing unlawful terms (e.g. deduction from wages)
  • improving the enforceability of post-employment restraints

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