Employment Update Issue 3
Does your employment agreement comply with the Fair Work Act 2009 (CTH)?With the introduction of the Fair Work Act 2009 (Cth) ('FWA'), the Modern Awards and the National Employment Standards ('NES'), employers must enter into compliant employment agreements with their employees.
CAN AN EMPLOYER CONTRACT OUT OF THE ACT AND AWARD?
Employers may only contract out of the minimum requirements where the employee receives entitlements that are more beneficial than the minimum requirements.
SHOULD THE EMPLOYMENT AGREEMENT BE IN WRITING?
Louis B Mayer said in the 1930s:
'an oral agreement isn't worth the paper it's written on'.
The advice is still sound today.
It is always recommended that an employment contract be in writing. It need not be overly formal and is often in the form of a letter of appointment.
However it should be clear and concise so that both the employer and the employee know what their rights and obligations are that they have agreed upon.
If a dispute arises later a written agreement will reduce the possible areas of dispute and save time and money.
There are a number of industries (most involving short term contracts) where written agreements are not commonly used. Even for these contracts a written letter or contract is preferable.
OTHER OPTIONS
Some employers decide that it is too much work to enter into separate employment contracts with each individual employee that they employ (especially if the business has a high turnover).
In these circumstances an enterprise agreement with the current employees, that covers all of the current employees and will cover any future employees, may be available.
The terms of an enterprise agreement must be negotiated between the employer and employees to be covered and must be approved by Fair Work Australia so there is a greater initial cost but an ongoing saving by avoiding later paperwork.
Of course the employer loses the flexibility of individual contracts by taking this option and where circumstances change employees are generally reluctant to give up conditions that are contained in an enterprise agreement.
CONTACT US
Accordingly, if you are an employer who:
- wants to confirm that your contract complies with the instruments above;
- or you may be considering entering an enterprise agreement with your employees instead of entering individual contracts,
you should obtain legal advice on how to do this as there are strict processes that must be followed.
Quinn & Scattini Lawyers can advise on all matters relevant to your employment relationship with your employees and can prepare any necessary documentation to protect your interests.