As surprising as it may sound, in Australia there is no lawful obligation to have a written employment contract in place. In fact, it is quite common for businesses to employ workers on the basis of a ‘nod and a handshake’.
A verbal agreement is all good and well – But what happens when your employee leaves or if there is a disagreement?
If you don’t have a written employment contract, you may be very disappointed about the degree to which you can protect your commercial interests or defend your position in the case of a workplace dispute.
Naturally, an employment contract should cover things like salary, reporting lines, place of work etc, but there are other issues facing employers, which can be addressed within a properly drafted employment contract.
The importance of having effective and well-drafted employment contracts in place cannot be understated. Don’t leave this to chance!
Protecting your confidential information and business goodwill
Plainly speaking, if you do not include confidentiality provisions in your contracts, you are putting your business at risk.
- Spell out what information is confidential in exact terms
- Explain the obligations that arise when receiving such information
Protecting you from ex-employees poaching your staff and clients
A Restraint clause in an employment contract is sometimes appropriate to protect your legitimate interest (for example preventing your ex salesperson from contacting your clients, whilst working for your competitor)
NOTE: A restraint clause must be drafted properly and carefully so as not to be considered unreasonable and therefore void. However, whether a clause is reasonable will depend on the particular facts of the case, and it is best to seek professional advice on this.
Protecting your Intellectual Property (IP) Rights
It is important to clearly account for your intellectual property in an employment contract. A carefully worded clause may prevent your employees to take ideas, concepts & developments (Intellectual Property) they produced whilst working for your business. It will also allow you to negate any potential disputes within your business to protect your IP.
Other benefits
There are many more key issues that should be considered when drafting an effective employment contract, including:
- Dispute resolution
- Termination
- Severance provision
- Policies – What to include without creating mutual obligations
- Reimbursement of expenses
- Dealing with bonuses
- State of jurisdiction
To find out more or to get help drafting a professional and effective employment contract, contact us