An Employment Agreement is an agreement between an employer and an employee that sets out terms and conditions of employment. An Employment Agreement can only be amended or varied by agreement between the employee and the employer.
An effective employment Agreement is one which accurately sets out the essential terms of the employee engagement. A well-crafted employment agreement is beneficial to both employees and employers as it spells out their rights and obligations, it provides certainty to employees and the employer is protected from risks associated to intellectual property and confidential information.
The essential terms of an Employment Agreement are:
- The term
The term of employment is either permanent or on a fixed term.
- Type of employment
There are 3 types of employment: full time, part time and casual. In terms of casuals, employers are reminded that from 1 October 2018, casuals who have been employed for 12 months now have a right to request their employer to transfer to full or part-time permanent employment. The Employer may only deny such a request on ‘reasonable grounds’ (we can provide more details on what is deemed ‘reasonable’).
The clause should include salary or rate of pay, frequency of payment and reference to superannuation.
- Other terms
Other essential terms to be included in the Agreement include: the position, or job title, location of role, probation (if any), hours of work, and a clause requiring the employee to comply with the employer’s policy and procedure manual, or employee handbook.
Some other critical clauses that employers should consider are:
- Leave – where those leave entitlements are in addition to the National Employment Standards
- Expenses, commissions or allowances (‘over and above’ salary entitlements)
- Termination and redundancy
- Restraint of trade (depending on position)
- Intellectual property protection clauses; and
- Any ongoing obligations following termination
The right employment agreement is an agreement that is tailored to the employer’s business and the employee’s role, duties and responsibilities.
To make sure your business’ employment agreements are right for your business, contact Philip van den Heever at email@example.com.
This is not legal advice.