Employment Contracts - A New Year 'To-Do' List
We will keep this short – if your employees have been working under their current employment contracts for more than 3 years, or worse – if you are not using written contracts at all – then this blog is for you!
Employment contracts are legal documents which set the terms and boundaries of the employer and employee relationship, and also articulate and govern the obligations of both parties with regard to the relationship and contractual agreement. As organisations, business operations, functions, roles, and relationships grow – many employers find their employment contracts contain outdated arrangements and terms. Employment contracts should be reviewed annually to ensure they “keep up” and continue to accurately represent the employment relationship and arrangements in place; as well as remaining legislatively compliant.
When employment contracts are not reviewed and updated, it can have costly consequences in the event of a dispute between the parties. In these circumstances, the dispute can often lead to a court or relevant tribunal to determine what the terms of the contractual agreement are at the time. Such decisions not only have the potential to impact on the business financially, but can also cause significant damage to reputation, brand, culture and morale.
Commonly the issues with long-standing employment contracts that contribute to disputes include:
Lack of contract variations to reflect significant changes to an employee’s position or conditions;
Ongoing fixed-term agreements (either with expired contracts or ‘rolling’ contracts);
Modern Awards – no reference to applicable Award, lack of alignment with all the minimum conditions of the applicable Award (particularly regarding remuneration and allowances);
Organisational change not reflected e.g. change to company motor vehicle allowance or scheme;
Insufficient or ineffective ‘protection’ clauses e.g. confidentiality, privacy, restraint, intellectual property etc.;
Policies and Procedures and/or Position Descriptions inadvertently forming part of the employment contract;
Signatory endorsement – e.g. unsigned contracts, contracts signed by only one party, contracts signed post-commencement; and
Poor wording or phrasing of clauses creating implied terms which were not intended.
Avoid the headache and legal costs associated with ‘signing and shelfing’ your employment contracts – add ‘Review contracts’ to your New Year’s To-Do-List.
Still not sure where to start – We can help, as little or as much as you need. Drop us an email solve@fiveseven.com.au
Remember – Don’t wait for an issue to prompt your review.
