In this modern age, much of the employment relationship is regulated by legislation and industrial awards/enterprise agreements.  So, is there still a need to have a written common law contract? The answer is yes, common law contracts are still a fundamental part of the legal employment relationship and a good contract will address a number of key areas not otherwise covered by legislation.

For an employer, a good contract should include:

  1. a termination clause allowing the contract to be terminated on specified notice.  This prevents a common law claim for “reasonable notice”;
  2. an “offset” clause allowing contract pay to be considered in satisfying legislative and award entitlements (eg covering overtime payments);
  3. a clause providing that employer policies do not form part of the contract of employment and are not mutually binding;
  4. a suitable post employment restraint;
  5. a suitable confidentiality provision.

For an employee, it is desirable for a contract to also contain:

  1. a particular job title;
  2. a detailed position description;
  3. a detailed and meaningful description of performance criteria and required goals/outcomes;
  4. provision for performance reviews at specified intervals according to agreed criteria;
  5. a dispute resolution clause.

Employers should regularly review their contracts to ensure they are up to date and contain appropriate protections.  They won’t solve all your potential legal problems but are a good place to start.  Please contact us if you would like us to review your existing contract or help with new ones.