Employment contracts are the cornerstone of a strong and compliant workplace. They serve as a binding agreement between employers and employees, clearly outlining the expectations, responsibilities, and rights of both parties. Beyond setting the tone for the working relationship, well-structured contracts are critical for ensuring legal compliance and protecting your organisation from potential disputes.

But what exactly makes an employment contract comprehensive? Let’s break down the essential clauses that every employment contract should include.

1. Position and Duties

Clearly outlining the employee’s role and responsibilities is vital to avoid ambiguity. A detailed description ensures that both parties have a shared understanding of the job expectations.

2. Start Date

Whether it’s a new hire or a reissued contract, including the correct start date is non-negotiable. For existing employees, remember to include their original start date to ensure accurate calculation of long service leave (LSL) accruals. This is an often-overlooked detail that can cause significant issues down the line.

3. Employment Status

Is the employee full-time, part-time, or casual? This distinction not only defines their entitlements but also aligns with award requirements. Contracts that fail to specify this can create confusion and risk non-compliance.

4. Award & Classification

One of the most critical clauses—and one we see missed far too often—is the inclusion of the correct award and classification. This detail determines the minimum pay rates, leave entitlements, and other conditions applicable to the role. Omitting it can lead to costly legal repercussions.

5. Remuneration and Benefits

Be specific about salary, superannuation, and any additional benefits. It’s essential to clarify what is included in the salary package to prevent misunderstandings, particularly around allowances, bonuses, and overtime.

6. Leave Entitlements

Detail all forms of leave, including annual leave, personal/carer’s leave, and any additional entitlements specific to your workplace. This ensures employees know their rights and employers remain compliant with legislation.

7. Confidentiality and Restraint Clauses

Incorporate clauses that protect your organisation’s sensitive information and intellectual property. Confidentiality agreements and restraint clauses prevent employees from engaging in conflicts of interest or disclosing trade secrets.

Why Regular Reviews Matter

Employment laws and award conditions change regularly. Contracts that are outdated or non-compliant expose organisations to significant risks, including financial penalties and employee disputes. Regularly reviewing and updating contracts is crucial to staying aligned with current legislation and ensuring best practices.

At HR Dynamics, we specialise in drafting, reviewing, and updating employment contracts to ensure they meet the latest legal requirements while protecting your organisation.

Watch: What Needs to Go in an Employment Contract

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In this quick video, Phoebe shares her insights into the key elements of a legally sound employment contract and common mistakes to avoid.

Need Help With Your Contracts?

If you’re unsure whether your contracts are compliant or need assistance drafting new ones, reach out to us at HR Dynamics. We’re here to help you navigate the complexities of employment contracts with ease and confidence.