The Nuts and Bolts of Employment Contracts

The employment contract follows once the verbal offer or letter of offer is accepted.

The employment contract houses the information laid out in the letter of offer in more detail and covers the legal parameters around commencing and working with an organisation. The contract also outlines, in more detail, provisions around probation, termination, restraints of trade, confidentiality and conflicts of interest.

Depending on the level and discipline being recruited employment contracts can be vastly different. We would recommend you seek legal assistance or join an employer’s chamber of commerce and industry or industry group with legal professionals at hand to develop legally binding and applicable templates for your industry.

A concise employment contract may have a similar format to the Letter of Offer. However, a detailed employment contract has several components including essential and non-essential information. Non-essential parts include those that could fall into an employment handbook. By having them in the contract you gain the employee’s acceptance of all matters including work rules, company policy and so forth.

Examples of sections you would find in a comprehensive employment contract include:

• Date
• Name of incumbent
• Address of incumbent
• The position offered
• Employment type – full-time, part-time or casual/contract
• Position description
• Reporting relationship
• Work location
• Commencement date
• Remuneration
• Superannuation and other benefits
• Leave
• Probationary period
• Performance and salary reviews
• Expenses
• Hours
• Performance and expectations of performance
• Other employment and conflicts of interest
• Resignation and termination
• Dismissal
• Restraints
• Company policies
• Work rules
• Health and safety
• Confidential information
• Privacy
• General provisions
• A copy of the Fair Work Act
• An outline or reference to the National Employment Standards
• The Position Description or reference to the Position Description
• Signing authority (of employer)
• Acceptance page (by employee)

Once contracts are signed you can then prepare for your employee to commence.

An employment contract is a legal document so consult a legal professional or industry group to gain assistance in developing an employment contract for your organisation.

Article written by Director, Maree Herath.