Navigating Your New Employment Contract

Starting a new job is an exhilarating experience, whether it’s your first position or a new opportunity in your career. Before diving into the details like what to wear on your first day or planning your commute, it’s essential to carefully review and sign your employment contract. This task can seem daunting, but this guide will help you understand what to look for in an employment contract.

Confirming the Agreed Terms

It might seem straightforward, but ensuring your employment contract reflects the terms discussed with your employer is crucial. For instance, if you negotiated working from home every Thursday during your interview, verify that this arrangement is included in the contract. Employment contracts often contain an “entire agreement” clause, which stipulates that any promises made verbally or in writing prior to signing the contract are not enforceable unless included in the document. Once you agree to the terms and sign the contract, it becomes challenging to claim any entitlements not explicitly stated.

Understanding Your Salary Structure

Your salary structure is a fundamental aspect of your employment contract. Typically, your employer will pay your salary along with compulsory superannuation contributions, currently set at a minimum of 10% of your annual salary. Note that this rate is scheduled to increase in the coming years.

However, salary structures can vary. Some may include your base salary plus commissions or bonuses. It is vital to understand the conditions under which bonuses or commissions are awarded, as these may be difficult to achieve or given at the employer’s discretion.

Notice Periods

Review the notice periods stipulated in your contract to understand the required notice for termination by either party. If not specified, the Fair Work Act 2009 (Cth) provides the following minimum notice periods:

Employees over 45 years old with at least two years of continuous employment are entitled to an additional week of notice if terminated by the employer.

Employment Type: Fixed Term, Permanent, or Casual

Clarify the nature of your employment, as this affects your entitlements. The main types are:

• Permanent Employment: Ongoing employment until terminated by you or your employer. Includes benefits such as paid annual leave, paid sick and carer’s leave, and notice of termination.
• Fixed Term Employment: Similar entitlements to permanent employees but with a set end date. Early termination is generally only permissible in cases of serious misconduct.
• Casual Employment: Employment on an as-needed basis, paid hourly. Casual employees do not receive set work hours or benefits like paid leave but receive a 25% casual loading on top of the base rate.

Regardless of employment type, your employer must provide workers’ compensation insurance to cover work-related injuries or illnesses.

Coverage Under a Modern Award

Modern awards, established by the Fair Work Commission, set minimum employment terms and conditions for various industries. There are currently 122 modern awards covering industries from construction to hospitality. Check if your industry is covered by an award and ensure your contract meets or exceeds these standards.

Asking Questions and Seeking Clarification

Do not hesitate to ask questions if any part of your employment contract is unclear. While it might feel intimidating to inquire about details after receiving a job offer, remember that you have the right to negotiate and seek clarity. Addressing any uncertainties at the outset is preferable to disputing terms later, saving potential hassle and misunderstandings.

By thoroughly reviewing your employment contract and understanding its terms, you can start your new job with confidence and clarity.

If you need assistance navigating your new employment contract, or have any questions, contact our expert employment team today.