How a Written Employment Contract Can Protect Your Business

 In Blog, Employers Tips

The importance of having effective and well-drafted employment contracts in place cannot be understated. Don’t leave this to chance!

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’.

That’s all good and well – But what happens when your employee leaves or if there is a disagreement between you and your employee?

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.

Protecting 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-sales person from contacting your clients, whilst working for your competitor

NOTE: Any restraint clauses must be drafted carefully so as not to be considered unreasonable and therefore void – Do not attempt to draft this on your own.

Intellectual property rights

A carefully worded clause may prevent your employees to ‘walk away’ with ideas / concepts / developments they produced whilst working for your business.

There are many more key issues that need to be considered when drafting an effective employment contract, including:

  • Dealing with bonuses – express terms or ‘discretionary’
  • Policies – what to include and what NOT to include
  • Reimbursement of expenses
  • Dispute resolution
  • End of employment
  • Severance provision
  • State of jurisdiction

To find out more or to get help drafting a professional and effective employment contract, contact us here or call Signature Staff on +61 7 4050 3888

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