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A.
CONTRACTS
Every
employment relationship involves a contract between an employer and an
employee. This contract may be verbal or in writing or
may sometimes involve a mix of the two. It is not necessary to
specifically agree on a contract for one to exist. The fact that an
employee starts work for an employer brings with it certain fundamental
implied terms, such as the right to payment for work performed and a
duty of mutual trust and confidence.
The inherent
difficulty with verbal contracts or relying on implied terms (in cases
where there is no specific written agreement or only a limited verbal
agreement) is that there can be later disagreement about what was
agreed in the first place. This is why a written contract is always
preferable. The contract should set out the main terms of the
employment and be signed by both the employer and the employee. Whilst
agreements are subject to minimum legislative entitlements and any
applicable award or collective agreement requirements, there is a large
range of matters which should still be covered, such as:
- Dates of commencement and duration of employment;
- Duties and accountabilities;
- Personal presentation;
- Training;
- Probation (if longer or shorter than the statutory
requirements);
- Hours of work;
- Remuneration;
- Confidential information;
- Intellectual property;
- Employer policies;
- Dispute resolution;
- Performance appraisal and unsatisfactory work performance;
- Grounds for suspension and termination;
- Termination notice;
- Post employment restraints;
- Redundancy;
- Relationship of the parties; and
- Governing law.
It is also common
practice for the statutory entitlements to be repeated in a common law
contract for the sake of completeness.
It is
always a good idea to have a new contract reviewed in consultation with
your lawyer. You should remember that a
contract is a binding legal document capable of enforcement in the
civil courts. The reality is that many new employees simply sign their
contracts without understanding the full implications. For example:
-
most
employment contracts contain a mutual obligation to give notice of
termination. So, if you resign your employment and don’t
provide the appropriate notice whether it be one, two or more weeks,
the employer may be within their rights to deduct an amount from any
money owing to you (eg from annual leave owing) equivalent to the
notice not given;
-
you
may have been with the same employer for say 10 years and your
employment is then terminated. Most contracts reflect the statutory
minimum requirements which essentially provide for up to five weeks
notice. Is this going to be a long enough period for you to find other
work or should you have proposed a longer period when agreeing on the
contract?;
-
you
may not have appreciated or just ignored a post employment restraint
provision saying that you couldn’t work for a competitor for
a period of time. It may very well become an issue when you leave your
employment.
You should also
keep in mind that old employment contracts can still apply even if you
change jobs or get promoted with an employer. It is a good idea to
check the terms of your employment contract whenever there is a
significant change in your job to make sure they still apply.
B.
POLICIES
You
should also ensure that you are familiar with your employer’s
policies because they may form part of your contract of employment (eg
no private use of the internet policy) and may
be relied on by your employer, for instance, if it wishes to take
disciplinary action against you. Conversely, there may be occasions
when you want to rely on employer policies. For example, some employers
(particularly larger ones) have redundancy policies which require a
higher payment by the employer than would otherwise be required. The
key issue will always be whether a particular policy is binding on
yourself or your employer and this may depend on the wording of the
contract itself or the conduct of the parties.
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