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An employment contract is an important document that details the terms and conditions of employment.
Once made, the terms of the employment contract can only be varied by agreement between the employer and the employee.
Important Employment Contract Terms
As a minimum, all employment contracts should contain terms confirming:
- the name of the position
- whether the position is full-time, part-time or casual
- the employee’s classification under any relevant award or enterprise agreement
- the hourly rate or salary
- that the employer can offset any above-award payments against any award or enterprise agreement obligations
- details of any non-monetary benefits
- hours of work
- the notice period required to terminate the contract.
It’s important that employment contracts are set up correctly.
Awards and Enterprise Agreements
Many employees are covered by either an award or an enterprise agreement (depending on their industry and occupation).
In most situations, as an employer you cannot ‘contract out’ of coverage of an enterprise agreement or an award. Instead, the employment contract can be used to supplement the conditions in the relevant award or enterprise agreement.
Some awards and enterprise agreements allow employers to vary certain provisions of the award or enterprise agreement, with the consent of the employee. In those circumstances, there will usually be a requirement that any such agreement means the employee will be “better off overall” after entering into the agreement.
National Employment Standards
The National Employment Standards, set out in the Fair Work Act 2009, apply to all employees of private enterprises. An employer cannot ‘contract out’ of the obligations contained in the National Employment Standards.