In this modern age, much of the employment relationship is regulated by legislation and industrial awards/enterprise agreements. So, is there still a need to have a written common law contract? The answer is yes, common law contracts are still a fundamental part of the legal employment relationship and a good contract will address a number of key areas not otherwise covered by legislation.
For an employer, a good contract should include:
- a termination clause allowing the contract to be terminated on specified notice. This prevents a common law claim for “reasonable notice”;
- an “offset” clause allowing contract pay to be considered in satisfying legislative and award entitlements (eg covering overtime payments);
- a clause providing that employer policies do not form part of the contract of employment and are not mutually binding;
- a suitable post employment restraint;
- a suitable confidentiality provision.
For an employee, it is desirable for a contract to also contain:
- a particular job title;
- a detailed position description;
- a detailed and meaningful description of performance criteria and required goals/outcomes;
- provision for performance reviews at specified intervals according to agreed criteria;
- a dispute resolution clause.
Employers should regularly review their contracts to ensure they are up to date and contain appropriate protections. They won’t solve all your potential legal problems but are a good place to start. Please contact us if you would like us to review your existing contract or help with new ones.