An employment contract refers to the terms and conditions of employment between an employer and an employee. It can be a written contract or a verbal contract.
How do employment contracts work?
A contract of employment is a written or verbal agreement between an employer and an employee that sets the terms and conditions of employment. Employers and employees both have rights and responsibilities under employment agreements.
Contracts negotiation for less than the minimum legal requirements
In a contract of employment, they must set out the minimum amount in:
- NES stands for the National Employment Standards
- The Award, registered agreement, or other enterprise agreement may apply.
A person’s rights are protected by the NES whether or not they have a contract. Employees cannot be worse off than under their minimum legal entitlements under a contract.
The employment contract in Australia.
There is a common law of employment contract in Australia (whether written or unwritten), which outlines the terms and conditions of employment. Legal requirements of the Australian Government and state and territory governments may apply to this contract. Therefore, they should review this contract before signing.
An employment contract should differ from an agreement with an independent contractor. The types of contracts of employment vary from state to state and territory to territory. For specific employment conditions, contact the relevant jurisdiction. An employment contract is necessary for both employers and employees.
Contracts can be based on workplace agreements between employees and their employers or industry-specific awards.
Contracts at the workplace
An employment contract gives employers the power to set conditions customized to their business. A standard employment contract contains the minimum requirements outlined in the National Employment Standards.
A workplace agreement is a contract between an employer and a group of employees that outlines their rights and responsibilities.
The concept can be applied to:
- It could be a single business or a group of businesses
- A single employee (but such agreements no longer exist).
- The Award does not apply when a workplace has a registered agreement.
The registered agreement’s base pay rate must equal the Award’s base pay rate.
- The National Employment Standards remain in effect
- The terms of the Award still apply to outworkers.
- A registered agreement is valid until it is terminated or replaced.
Awards (modern awards) outline the contemporary era’s minimum wage rates and employment conditions. In Australia, more than 100 awards cover most industries or occupations.
The award specifies the minimum pay rates and employment conditions. A tribunal is responsible for drafting the Award.
Particular industries or occupations set specific employment conditions. In addition to the minimum requirements in the National Employment Standards, Award conditions apply.
An employer may cover more than one Award;
Whether an employee is eligible for multiple awards depends on their job:
For example, the same employer is eligible for two awards:
Jo owns a construction business. In addition to carpenters, he has an office staff that takes care of administration. He will receive 2 awards:
- Construction Award – for his qualified carpenters
- The Clerks Award – given to his office staff.
Contract of independent employment
In Australia, self-employed employees use Independent contracts. These contracts govern how they conduct their business.
A contractor who does painting work for a business is an example of an independent contractor. An independent contractor has different rights than an employee.
Make sure the employment contract in Australia meets the legal minimums.
The minimum legal terms of an employment contract must be as follows:
- Standards of Employment (NES)
- You may be entitled to awards, enterprise agreements, or other registered agreements.
The National Employment Standards (NES) apply to all Australian employees, regardless of whether they have a contract. Employees cannot be worse off by contract than their minimum legal entitlements.
Advice on Drafting Employment Contracts
Our Pay and Conditions Tool allows you to check minimum award rates.
Employment contracts: How to get help?
You can use the Employment Contract Tool if you’re new to hiring staff. Using the tool, you can create an employment contract tailored to your business needs while complying with workplace laws. The guide also provides easy-to-understand information on all the legal minimums you must include.
- Only those employees can use this tool who are:
- Work full-time, part-time or on a casual basis
- Awarded with a recognition
- Wages are either hourly or weekly.
It’s not for every worker to use the Employment Contract Tool. Those who cannot use it include:
- Salary-paying employees
- A trainee or an apprentices
- Employees who work seasonally
- Self-employed individuals or independent contractors
- An employee covered by a registered agreement.
Additionally, we can advise you on the minimum legal requirements in an employment contract. If the contract contains any other terms or conditions, you will need advice from an attorney.
Get legal advice by finding out where to go
Think a mistake may happen about the legal minimums in a contract?
As humans, we all make mistakes. Talking is usually the best way to fix them. Our best legal professionals can provide you with best advice on Drafting Employment Contracts.
The tax system
The Australian Taxation Office (ATO) provides many tools and resources to assist employers, owner drivers, and hirers in meeting their tax obligations.
Discrimination in the workplace is something we can help with. Visit our page on protecting against discrimination at work to find out how we can help. Human rights are promoted and protected by the Australian Human Rights Commission. As well as resolving discrimination complaints under federal laws, they can also assist with discrimination issues.
The anti-discrimination laws of each territory are regulated and enforced by their local anti-discrimination bodies.
Reviewing Employment Contracts
Your employment contract details the terms and conditions of your new job, such as your wages, hours of work, and leave entitlements. It shows that you and your employer have both agreed to follow its terms. However, all contracts must include legally enforceable minimum terms and conditions, and some clauses may affect your career down the road (such as non-competitive clauses or clauses about intellectual property rights). Ensure your contract complies with all minimum requirements and understands any other provisions it contains.
Our free employment contract review service can help you before you sign anything. One of our experts will examine the minimums and explain all the terms and conditions upon your request. You feel relaxed from knowing exactly what your contract contains.
Complete our Contract Review Request Form, and one of our advisors will get in touch with you.
Services We Provide
We assist employees in enforcing their rights, and employers are obliged to protect their interests.
Our Employment Lawyers provide advice and representation to employers and employees in various workplace matters. Our clients must establish and maintain cohesive, constructive work relationships.
To make informed commercial decisions, we will provide you with clear, concise, timely legal advice in a constantly changing area of law.
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