This information is intended to provide general insurance related information only. It is not intended to be comprehensive, nor does it, or should it (under any circumstances) be construed as constituting legal advice. You should seek independent legal or other professional advice before acting or relying on any of the content of this information. Aon Risk Services Australia Limited will not be responsible for any loss, damage, cost or expense you or anyone else incurs in reliance on or use of any information contained in this article.

Simply put, an employee contract is a formal agreement made between an employer and an employee. The contents of this contract may vary, but most include key information about the expectations of the role, the employee’s rights in relation to pay and conditions, and any confidentiality or intellectual property protection terms. Although an employee contract may be verbal in nature, it is more commonly outlined in a written document.

Although each employee contract will differ slightly, some of the basic inclusions most will feature include:

• The names and details of the employee and the employer
• The job title
• A description of the role and the regular duties involved
• The type of employment, whether that be casual, part-time or full-time
• The regular place of work
• The regular hours of work
• The date that the employment will commence and, if the employment will only be for a specific period, the date that the employment will end
• The position’s pay rate, the standard superannuation contribution rate and any applicable allowances or benefits
• Details around leave allowances, including annual leave, personal leave and long service leave
• Notice requirements for the employee or the employer to end the employment relationship
• Any relevant confidentiality and intellectual property clauses Employment termination conditions, including redundancy

All employee contracts must contain the minimum legal entitlements for the industry the employee will be working in, but an employer can choose to add more generous contract terms if they wish.

You should look to use an employment contract each time a new employee starts working at your business. Not only does an employee contract help to clarify the scope of the role and outline the responsibilities of the employee, but it can also help to protect your business if a dispute were to arise in the future. If possible, look to have the contract put into writing to help ensure you are covered if any issues were to develop in the months or years ahead. Both you and the employee can refer to the contract for agreed details surrounding pay, leave and more.

Consider providing a potential employee with a copy of the contract before they accept the role to ensure they are aware of any unique terms and conditions contained within the contract.

If you do not choose to create a contract, the National Employment Standards (NES) will still apply. The NES includes the minimum entitlements each employee is automatically provided under Australian law, including leave entitlements, maximum weekly hours and more. A copy of the Fair Work Information Statement must also be provided to the employee, outlining the contents of the NES.

If you’re needing to create an employment contract for a new hire at your business, the following structure can be a good starting point. As with any legal document, however, it’s recommended that you consult with your lawyer to ensure that you have made all necessary inclusions.

If they are relevant to the position, you can also include some additional clauses relating to the following:

Looking for more great information to help you start your small business? Explore the great tips and resources hosted on our small business blog.

• Position title
• Duties
• Employment terms and conditions
• Workplace
• Employment type
• Employment dates
• Hours of work
• Breaks
• Pay
• Payment method
• Superannuation
• Annual leave
• Parental leave
• Personal/carer’s leave
• Compassionate leave
• Community service leave
• Family and domestic violence leave
• Public holidays
• Long service leave
• Dismissal
• Resignation
• Redundancy

If they are relevant to the position, you can also include some additional clauses relating to the following:

• Probation period
• Flexible hours
• Averaging hours
• On-call or standby
• Rosters
• Additional superannuation
• Penalty rates and overtime
• Allowances
• Commission
• Annual bonus
• Annual pay review
• Additional parental leave
• Employee obligations
• Conflict of interest
• Confidentiality
• Intellectual property
• Consultation for workplace changes
• Disputes
• Misconduct

Looking for more great information to help you start your small business? Explore the great tips and resources hosted on our small business blog.