An Australian employment contract is a document that provides certainty for both employers and employees regarding the terms and conditions of employment in Australia. It outlines important details such as job descriptions, terms of employment, remuneration and benefits, working hours, and termination conditions.
This article will explore the key elements of an employment contract in Australia, including minimum legal entitlements, types of Australian employment contract, and contract terms to consider. These are essential for both employers and HR professionals to ensure compliance with Australian employment laws and to protect the rights and obligations of all parties involved.
Terms in an Australian Employment Contract
If you’re an employer, you must include these terms in your contract:
1. Terms of employment. You must state in the written employment contract the start date, length of the contract, and any probationary period that an employee must comply with. For example, in a fixed term contract, you should include a time period when the contract starts and ends. For more information about fixed term contracts, check the FairWork Ombudsman’s website.
2. Remuneration and Benefits. Indicate the salary or hourly or weekly wage rate, bonuses, and benefits such as health insurance or paid time off in the contract. For salary rates, the employer must make sure that it complies with the National Minimum Wage requirements.
Also, the benefits must be outlined in the Australian employment contract. Full-time and part-time employees are entitled to statutory benefits, while casual workers may have reduced benefits.
3. Working Hours. Specify the employee’s working hours and any overtime or flexible working arrangements. Full-time employees typically work 38 hours per week, while part-time employees work less than 38 hours per week. The National Employment Standards (NES) set the minimum standards for working hours, and the contract should comply with these standards.
4. Termination. An Australian employment contract should outline the grounds for termination, notice periods, and any statutory entitlements that must be paid to the employee upon termination. The grounds for and process of termination in Australia are dealt with by the Fair Work Act 2009. The grounds for dismissal can include capacity, performance, misconduct (including serious misconduct), and redundancy.
5. Job Description. The job description should clearly outline the main tasks and responsibilities of the role, as well as any specific skills or qualifications required. However, employers should be cautious when writing job descriptions to avoid specifying certain characteristics, such as religion, sex, sexual orientation, age, or physical ability, as these could be considered discriminatory.
What Are the Legal Minimum Entitlements?
The Legal Minimum Entitlements ensure the fair treatment and decent working conditions of employees. Minimum entitlements can come from a range of sources including industrial instruments (e.g. an award or an enterprise agreement) and legislation, such as the Fair Work Act 2009. Two important things that you must know as an employer:
1. National Employment Standards (NES). The NES provides for 11 minimum entitlements that an employer must provide to their employees. These are:
- Maximum weekly hours
- Requests for flexible working arrangements
- Offers and requests to convert from casual to permanent employment
- Parental leave and related entitlements
- Annual leave
- Personal/carer’s leave, compassionate leave and family and domestic violence leave
- Community service leave
- Long service leave
- Public holidays
- Notice of termination and redundancy pay
- Fair Work Information Statement (the FWIS) and Casual Employment Information Statement (the CEIS).
2. Awards, Enterprise Agreements, or other Registered Agreements. Awards and enterprise agreements provide additional terms and conditions for specific industries or regions. Employers must ensure that their contracts comply with the NES, awards, enterprise agreements, and other registered agreements to avoid penalties and legal consequences.
Moreover, awards specify the minimum pay and working conditions to which an employee is entitled (also known as modern awards). When an employee is covered by an enterprise agreement or other registered agreement that the employer has, awards do not apply.
You can check out the list of awards through this link.
Types of Australian Employment Contract
There are four main types of employment contracts in Australia: full-time, part-time, casual, and contract employment agreements. Here is some information on how to create a formal employment contract for each type of employment:
Full-time Employment Agreement
This is for employees who work generally for 38 to 48 hours a week, which is the standard employment arrangement. To create a full-time Australian employment contract, employers should include the following information: job title, duties and responsibilities, remuneration and benefits, working hours, leave entitlements, notice periods, and termination clauses.
Part-time Employment Agreement
There are also employees who work fewer hours than a full-time employee on a regular basis. To start off, employers should include the same information as a full-time written contract, but with adjustments made for the reduced hours workers.
Casual Employment Agreement
A casual employment contract is a type of employment agreement in which an employee’s working hours and employment status are liable to change at short notice. Aside from the regular contract terms, it should include clauses related to casual conversion, which allows casual employees who have been in a role for at least 12 months on regular and systematic hours to convert to permanent employment.
Contract Employment Agreement
A contract employment agreement can be full-time or part-time and is based on a specific contract between the employer and employee. In drafting a contract employment contract, employers should specify the length of the contract, the job title, and the expected duties of the position.
Additional Clauses and Considerations
Aside from the regular common law contract terms, employers may also include additional clauses such as:
- Confidentiality and Intellectual Property (IP) Protection
- Non-solicitation Clause
- Warranties
- Minimum Engagement Time
- Essential Requirements of the Role
Protect Your Business and Your Employment Relationship
Running a business in Australia comes with incredible rewards, but it also poses unique legal challenges. To ensure compliance with current employment legislation concerning Australian employment contracts, seeking legal advice is a smart move for employers.
Legal compliance protects the rights of stakeholders, ensures ethical business practices, and helps organisations remain competitive. To avoid legal issues, minimise risks, and ensure fair treatment, our employment lawyers at JB Solicitors can provide you our expertise in employment law and assist you in whatever legal concerns you have. We can also help with:
- Finding the right employment contract tool that we can use for you
- Preserving the relationship of both the employer and their employees
- Finding out loopholes in unfair employment contracts
- Helping employers draft proper contracts for their employee or independent contractor to prevent disputes in the future.
Contact us today if you need help with your own employment contract or any other employment law matters.
