Employment Contracts For Engineering Consultants

Yes, you should have a written employment contract for engineers and technical consultants you hire in Australia. For an engineering consultancy, a generic contract usually won't go far enough because your team may be handling client designs, site information, confidential technical data, safety obligations and professional duties.

The tricky part is that engineering roles often sit at the intersection of employment law, intellectual property, client contracts and industry regulation. A good contract should do more than list salary and hours. It should set clear expectations from day one and help protect the value your consultancy is building.

If you're hiring your first engineer or growing a technical team, this doesn't have to be complicated. You just need to know which clauses matter most for your business, and where a standard template can leave gaps.

Do Engineering Consultants Need A Written Employment Contract?

Yes, a written employment contract is strongly recommended for engineering consultants because it gives you clear terms around pay, duties, IP, confidentiality, restraints and site work.

Under the Fair Work Act 2009, employees receive minimum entitlements through the National Employment Standards, any applicable modern award or enterprise agreement, and other workplace laws. Your employment contract can't undercut those minimums, but it can explain how the role works and add protections that matter to your consultancy.

For engineering roles, you may want the contract to cover:

• The employee's position, reporting lines and professional responsibilities
• Whether the role needs a full-time, part-time, casual or fixed term employment contract
• Ordinary hours, overtime expectations and flexible work arrangements
• Salary, allowances, bonuses and expense reimbursement
• Site attendance, travel and safety obligations
• Ownership of designs, reports, drawings, models, code and inventions
• Confidentiality around client projects, pricing, tenders and technical information
• Post-employment restraints for clients, staff and sensitive projects
• Notice periods, probation and termination process

Say you run a civil engineering consultancy in Newcastle and hire a senior engineer to work on subdivision designs for a major developer client. If the contract only says their title and salary, you may have uncertainty later about who owns concept drawings, whether they can approach the client after leaving, and what happens to project files on their laptop. Those details are much easier to manage when they're written clearly upfront.

Which Award Applies To Engineers In Australia?

It depends on the role, but many professional engineering employees are covered by the Professional Employees Award 2020 unless an enterprise agreement or another award applies.

The Professional Employees Award 2020 commonly covers employees performing professional engineering duties, professional scientific duties and certain information technology duties. However, award coverage can be technical. It depends on what the employee actually does, not just the job title you give them.

For example, a graduate mechanical engineer doing engineering design work may be covered by the Professional Employees Award. An administrative project coordinator in the same business may be covered by a different award, or no award, depending on their duties.

You should check award coverage before issuing the contract because it can affect:

• Minimum rates of pay
• Classifications and progression
• Ordinary hours and overtime arrangements
• Allowances and penalty rates
• Consultation and dispute procedures

Even if you pay well above minimum rates, the award can still matter. For example, some annualised salary arrangements need to be handled carefully so the salary is high enough to cover modern award entitlements and the contract records what the salary is intended to compensate for.

Your contract should also sit neatly with the National Employment Standards. For full-time employees, these include 4 weeks of paid annual leave each year and 10 days of paid personal or carer's leave each year. Minimum notice periods under the Fair Work Act are generally 1 week for less than 1 year of service, 2 weeks for 1 to 3 years, 3 weeks for 3 to 5 years, and 4 weeks for more than 5 years, with an extra week if the employee is over 45 and has at least 2 years of service.

What Clauses Matter Most In An Engineering Employment Contract?

The most important clauses are the ones that deal with the real risks in your engineering work, especially professional duties, deliverables, safety, confidentiality, IP and client relationships.

Role And Professional Duties

Your contract should describe the employee's role clearly enough to avoid confusion, but flexibly enough that your business can grow. Engineering consultants often work across multiple projects, clients and locations, so the duties clause should allow reasonable changes within the employee's skills and seniority.

You may also need clauses requiring the employee to:

• Maintain professional standards expected of their discipline
• Follow lawful and reasonable directions
• Comply with your policies and client site rules
• Hold and maintain any required professional registration, licence or accreditation
• Tell you promptly about conflicts of interest, errors, defects or safety concerns

Professional registration rules vary across Australia. For example, Queensland has the registered professional engineer system under the Professional Engineers Act 2002, and Victoria has a professional engineer registration scheme under the Professional Engineers Registration Act 2019. New South Wales also has specific registration requirements for certain building work under the Design and Building Practitioners Act 2020. If your work crosses state borders, your contract and onboarding process should reflect where projects are delivered.

Hours, Overtime And Project Deadlines

Engineering work can move around tender deadlines, site conditions and client milestones. Your contract should set out ordinary hours, reasonable additional hours and how overtime or time off in lieu is managed if an award or policy applies.

Be careful with wording like "all overtime is included in salary". That may be acceptable in some circumstances, but only if the salary genuinely covers the employee's minimum entitlements. If the employee is award-covered, you'll need to check the award and keep adequate records.

Site Work And Travel

If employees attend construction sites, client premises, plants, mines, infrastructure corridors or remote locations, your contract should cover site attendance expectations. This can include travel, accommodation, fatigue management, personal protective equipment, drug and alcohol policies, and compliance with site induction requirements.

You should also be clear about how expenses are approved and reimbursed. Without a process, small issues can build up quickly, especially where employees are travelling between multiple project sites.

Who Owns Designs, Drawings And Inventions Created By An Engineer?

Usually, your business should own work created by an employee as part of their job, but you shouldn't rely on assumptions when designs, reports, models, software or inventions are commercially valuable.

Under Australian copyright law, an employer generally owns copyright in works created by an employee in the course of employment. For an engineering consultancy, that might include reports, drawings, CAD files, specifications, diagrams, manuals, presentations and some software code.

However, the position can become less clear where work is created:

• Outside ordinary hours
• Using the employee's own tools, templates or prior materials
• Before employment starts
• For a side project
• Across a mix of employee and contractor contributions
• For a client where your client contract has specific IP requirements

Your engineering employee IP clause should deal with more than copyright. Depending on your work, you may also need to cover inventions, patentable technology, registered designs and invention assignment processes, confidential know-how, databases, calculations, templates and project methods.

A practical IP clause will usually say that:

• Your business owns IP created in the course of employment or using business resources
• The employee assigns any relevant rights to your business where needed
• The employee must help sign documents to confirm ownership or registration
• The employee must not reuse client materials for other work
• The employee gives appropriate moral rights consents where allowed by law
• The employee must disclose inventions, improvements or discoveries connected to your business

Moral rights under the Copyright Act 1968 are personal rights of creators, such as the right to be attributed and the right not to have work falsely attributed. They can't be assigned away in the same way as copyright, so contracts often include consent wording that lets your business and clients use, adapt and modify work in practical ways.

This is one area where templates often miss important details. If your consultancy creates high-value designs, technical systems or proprietary methods, it's worth tailoring the IP clause to your client contracts and the kinds of deliverables your team produces.

Can You Stop An Engineer From Taking Clients Or Staff?

Sometimes, but only if the restraint is reasonable and protects a legitimate business interest, such as client relationships, confidential information or your workforce.

An engineer restraint clause can't simply punish an employee for leaving or stop fair competition. Australian courts generally look closely at whether the restraint goes further than needed. In New South Wales, the Restraints of Trade Act 1976 can also affect how restraints are assessed.

For an engineering consultancy, restraints are usually aimed at protecting:

• Key client relationships built through your business
• Project pipelines, tenders and pricing information
• Confidential designs, technical methods and know-how
• Other employees and subcontractors
• Strategic supplier or consultant relationships

A well-drafted restraint is usually specific. For example, it may stop a departing senior engineer from approaching clients they worked with in the last 12 months, rather than trying to stop them from working anywhere in engineering across Australia.

Many contracts use cascading restraints, with different time periods and geographic areas. The idea is to give a court or decision-maker options if part of the restraint is too broad. Even then, the restraint still needs to be reasonable for the employee's role, seniority, access to confidential information and client influence.

For junior engineers, a long non-compete is often hard to justify. For a director-level engineer who manages major client accounts and knows your tender strategy, a carefully drafted non-solicitation clause may be much more defensible.

How Should You Deal With Confidential Information And Client Data?

You should use clear confidentiality and data handling clauses because engineering employees often access sensitive technical, commercial and client information.

Confidential information in an engineering consultancy can include:

• Drawings, models, plans, calculations and specifications
• Client briefs, project scopes and tender documents
• Pricing, margins, fee proposals and pipeline information
• Safety incidents, defect reports and risk assessments
• Supplier rates and subcontractor arrangements
• Internal templates, methods, checklists and quality systems

Your contract should include confidentiality clauses that say what information is confidential, how it can be used, and what happens when employment ends. It should require employees to return or delete business information from personal devices and cloud accounts, subject to any legal recordkeeping obligations your business has.

If your consultancy handles personal information, the Privacy Act 1988 may also apply, especially if your business has an annual turnover of more than $3 million or falls into a category that's covered regardless of turnover. Even where the Privacy Act doesn't apply, client contracts may require privacy and data security standards.

For engineering teams, it's common for project information to move through email, shared drives, CAD platforms, project management tools and client portals. Your employment contract should be backed up by practical policies on device use, passwords, access permissions, document control and remote work.

What About WHS And Site Safety Obligations?

Your contract should support your work health and safety obligations, but it won't replace the safety systems you need under WHS laws.

Most Australian states and territories have harmonised work health and safety laws, while Victoria operates under its own Occupational Health and Safety Act 2004. In broad terms, you have duties to provide a safe working environment so far as reasonably practicable, and employees have duties to take reasonable care and follow reasonable safety instructions.

Engineering consultants may face safety issues that office-based employees don't see as often, such as:

• Site inspections near plant, traffic or excavation areas
• Remote or regional travel
• Working at heights or in confined spaces, depending on the role
• Fatigue from travel and deadline pressure
• Exposure to hazardous substances or live services
• Psychosocial risks, including high workload and project pressure

Your employment contract can require employees to comply with WHS policies, attend inductions, wear required PPE, report hazards and incidents, and refuse unsafe work where appropriate. You should also make sure your policies and training match what your contract says.

If your employees attend client sites, your contract should make it clear that they must follow both your safety procedures and reasonable site rules. That said, you can't contract out of your own safety duties, so you still need proper systems, supervision and risk management.

How Do Fixed Term And Probation Clauses Work For Engineering Roles?

Fixed term and probation clauses can be useful, but they need to be drafted carefully so they don't create false certainty or breach workplace rules.

From 6 December 2023, the Fair Work Act restricts many fixed term contracts. In general, a fixed term employment contract can't run for more than 2 years, including extensions, and can't be extended or renewed more than once. There are exceptions, including for some specialised skills, training arrangements and certain government-funded roles, but you should check before using a fixed term contract for a project engineer.

If you use a fixed term contract for a particular project, be clear about:

• The start and end date, or the event that ends the contract
• Whether either party can terminate early with notice
• How award or NES entitlements still apply
• What happens if the project is delayed or extended
• IP, confidentiality and handover obligations at the end

Probation periods are also common, often 3 or 6 months, but probation doesn't remove minimum employment rights. You still need to comply with notice requirements, anti-discrimination laws, general protections under the Fair Work Act and any applicable award or enterprise agreement.

For technical roles, use probation to assess more than whether the person is a good cultural fit. You may want to check quality of work, client communication, documentation habits, safety awareness and ability to follow your review and sign-off processes.

Common Mistakes To Avoid

The biggest mistake is using a generic contract that doesn't match how your engineering consultancy actually works.

Here are some issues we often see in technical businesses:

• No award check: The contract assumes the employee is award-free, but the Professional Employees Award or another award applies.
• Weak IP wording: The contract doesn't clearly capture drawings, inventions, templates, source files, models or improvements.
• No client restraint: A senior engineer can leave and immediately approach clients they managed for your business.
• Overly broad restraint: The restraint tries to stop too much, making it harder to rely on if there's a dispute.
• No site work clause: Travel, PPE, inductions, safety rules and site attendance expectations are left unclear.
• Unclear overtime terms: The salary is meant to cover extra hours, but the contract doesn't deal properly with award entitlements or recordkeeping.
• Missing registration requirements: The employee needs a professional registration for certain work, but the contract doesn't require them to maintain it.
• No return of property process: Project files, client information and devices aren't dealt with properly when employment ends.

Another common issue is forgetting to align employment contracts with client contracts. If your client agreement says your business must own all project IP and keep certain information confidential, your employee contracts should help you meet those promises.

Key Takeaways

• Engineering employment contracts should be tailored to technical work, not copied from a generic office role.
• Check whether the Professional Employees Award 2020 or another award applies before setting salary, hours and overtime terms.
• Use clear IP clauses for designs, drawings, models, reports, software, inventions and client deliverables.
• Restraint clauses can protect client relationships and confidential information, but they need to be reasonable for the role.
• Site work, WHS duties, travel, PPE and professional registration should be covered where relevant.
• Fixed term contracts and probation clauses can help manage project-based hiring, but they still need to comply with the Fair Work Act.

If you'd like help with your engineering employment contracts, IP and confidentiality clauses, restraint wording or award coverage checks, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.