Contents
Introduction
An effective employment contract is the backbone of a strong working relationship, particularly when you’re dealing with full-time non-award employees. When drafting an employment contract sample, you need to ensure it clearly outlines the rights and obligations of both you and your employee. In this article, we break down the key terms you should include to protect your business and provide clarity to your staff, all while ensuring compliance with Australian workplace laws.
Whether you’re a small business owner or a larger organisation, having a solid contract can mean the difference between smooth day-to-day operations and costly misunderstandings down the track. We’ll guide you through each essential element, from employment type and pay terms to confidentiality, restraint clauses, and more. Let’s dive into the legal side of things so that your employment agreements work for you.
Understanding Full-Time Non-Award Employment
Full-time non-award employees are those who are not covered by a specific industry award under the Fair Work Act 2009. Instead, their employment conditions are primarily governed by their individual employment contract and the National Employment Standards (NES). This approach offers greater flexibility in setting terms that suit both the employer and the employee.
Since non-award employees do not have the additional protections required under an award, it is crucial that your employment contract sample incorporates detailed terms regarding pay, leave, hours of work, termination, and more. Ensuring clarity in these areas can minimise disputes and set the tone for a transparent workplace culture. For more on the basics of contract formation, you might be interested in our article on what is a contract.
Essential Elements of an Employment Contract Sample
1. Employment Type
Your contract should explicitly state that the employee is engaged as a full-time staff member. This means the employee works a standard number of hours—typically 38 hours per week—which is consistent with the NES guidelines. Clear language avoids ambiguity and ensures that both parties understand the nature of the engagement from the start.
It’s also beneficial to outline the employee’s role and responsibilities. Defining the position not only informs the employee what is expected but also provides a framework for evaluating performance over time.
2. Pay Terms
In your employment contract sample, pay terms should be detailed and specific. Whether you are quoting an annual salary or an hourly rate, the document must state how the remuneration is calculated. Ensure that your pay terms comply with the National Minimum Wage standards, particularly if no award applies. You can review the latest minimum wage updates on the Fair Work Ombudsman website.
Additionally, consider including provisions for bonuses, commissions, or other incentive payments where applicable. Clearly outlining when and how these payments are made can help maintain transparency and trust. Including details about regular payment intervals, such as weekly, fortnightly, or monthly, further enhances clarity.
3. Hours of Work
A key element of any employment contract sample is the specification of hours of work. For full-time employees, this typically means a standard 38-hour week. It’s important to note if there is any expectation of flexible working hours or overtime requirements.
If you anticipate flexibility in work schedules, be sure to state this clearly. For instance, you may include provisions that allow for adjustments to start and finish times, provided overall work obligations are met. This section sets out the foundation for time management and work-life balance within your organisation.
4. Leave Entitlements
Leave entitlements are central to protecting both the employee’s wellbeing and your business’s compliance with legal standards. In your employment contract sample, specify the employee’s entitlement to annual leave, sick leave, carer’s leave, and parental leave. These entitlements must conform to the National Employment Standards (NES).
It is advisable to include details on how leave accrues and any conditions for taking leave. Providing specifics—such as when leave can be taken, the process for applying, and any notice required—helps avoid confusion later. Clear leave policies also support a healthy work environment by emphasising the importance of rest and recovery.
5. Termination Notice and Probation Period
Another essential element of your contract is the termination clause, which outlines the notice period required from either party. For full-time non-award employees, this should meet or exceed the minimum requirements as set out by the NES. Clearly state whether notice periods differ during any probationary period.
Many employment contracts include a probation period during which either party can terminate the agreement with shorter notice. Establishing a probation period helps both you and the employee assess if the engagement is the right fit. Make sure to detail the conditions that apply during probation and any subsequent obligations once the period passes.
6. Confidentiality, Intellectual Property, and Restraint Clauses
Protecting your business’s sensitive information is crucial. Your employment contract sample should include a confidentiality clause that obliges the employee to keep corporate information confidential during and after employment. Additionally, it should clearly state the ownership of intellectual property created during the course of employment.
It is also wise to consider including restraint clauses to prevent post-employment competition. However, these clauses must be reasonable, narrowly tailored, and enforceable. To learn more about how restraint clauses are structured, check out our guidance on non-compete agreements.
Ensuring that these provisions are carefully drafted will protect your business interests without unduly restricting the employee’s future career opportunities. Balance is crucial to ensure enforceability while still defending your commercial interests.
7. Dispute Resolution
Despite the best intentions, disputes can arise in any employment relationship. Your contract should outline a clear dispute resolution process, including initial internal resolution mechanisms, mediation, or arbitration if necessary. This can help both parties resolve conflicts quickly and amicably.
A well-drafted dispute resolution clause not only saves time and money but also helps maintain a positive working relationship if disagreements do occur. Providing a pathway for resolving disputes demonstrates your commitment to fairness and transparency in the workplace.
8. Compliance with Legislation
Finally, your employment contract sample must be compliant with all relevant laws and regulations. This includes adherence to the Fair Work Act 2009 and the National Employment Standards. Every term included in the contract should reflect current legal requirements to protect both the employer and the employee.
It’s essential to regularly review and update your employment contracts to reflect any changes in legislation or organisational policy. In uncertain times, it might be a good idea to have your contract undergo a contract review and redraft by experts who are up to date with the latest legal developments.
Key Considerations When Drafting Your Employment Contract Sample
When putting together your employment contract sample, keep the following considerations in mind:
- Clarity and Precision: Use clear, plain language that avoids legalese as much as possible. Your employee should be able to understand their rights and responsibilities without having to consult a dictionary.
- Customisation: Tailor the contract to reflect the unique aspects of the employment arrangement. Not every clause will be necessary for every position, so adapt as needed.
- Fairness and Balance: Although the contract must protect your business interests, it should also be fair to the employee. A balanced approach helps foster a positive and compliant workplace.
- Regulatory Compliance: Ensure all terms adhere to statutory requirements, especially regarding minimum wage, leave, termination, and dispute resolution.
- Flexibility for Change: Consider including clauses that allow periodic reviews of the contract. This is particularly important if your business undergoes significant changes or if labour laws are updated.
Small business owners, or those operating as a sole trader who employ staff, should pay close attention to these details. Tailoring your employment contracts to align with your business’s specific needs can help prevent potential disputes and reduce the risk of litigation.
Final Thoughts
Drafting a comprehensive employment contract sample for full-time non-award employees is not just about legal compliance—it’s about establishing a solid framework that promotes fairness, transparency, and mutual respect. When every term, from pay and working hours to confidentiality and dispute resolution, is clearly outlined, both you and your employees can have confidence in the relationship.
Remember, an employment contract is a living document. As your business grows and legislation evolves, so too should your contracts. Regular reviews and updates will ensure that your agreements remain current and effective, safeguarding your business and supporting your team.
Key Takeaways
- Clearly define the employment type and full-time status to set proper expectations.
- Detail pay terms and ensure they comply with the National Minimum Wage requirements.
- Outline standard working hours and flexible work arrangements clearly.
- Specify leave entitlements in accordance with the National Employment Standards.
- Clearly state termination notice requirements and probation periods.
- Include confidentiality, intellectual property, and reasonable restraint clauses to protect your business interests.
- Establish a straightforward dispute resolution process to manage potential conflicts.
- Ensure full compliance with the Fair Work Act 2009 and regularly update your contract as needed.
If you would like a consultation on employment contract sample, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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