Are your employment contracts up to standard?

Are your employment contracts up to standard?

Employment contracts are often neglected to an alarming degree by employers everywhere.

Alarming because people seem to forget employment contracts are legally binding documents. A misstep could spell disaster which, in this case, means exposure to potential legal action.

Here’s how you can make sure your employment contracts are up to standard.

What is Required?

Employment contracts establish the terms and conditions of a working position. Outlining everything from duties and responsibilities of employment, expected hours, employee rights, remuneration, and more. They must adhere to the legal minimum set by the National Employment Standards (NES) or relevant award, enterprise or other applicable agreements. Anything more than that is welcome gravy.

Have your letter of employment reviewed by a legal expert to fix up terms that may appear vague, unclear, or unlawful to ensure the document is compliant.

Written vs. Verbal

Believe it or not, a conversation and a handshake can be as legally binding as a signed document.

They’re usually utilised by small business owners for the sake of convenience. But if you’re going to be exposed to the same level of legality, why wouldn’t you want it in writing to avoid a potentially messy fight in the future?

This is about proof. When the chips are down, how will you prove your word against the other person? And if you really think none of this matters, read about the McDonalds brothers below.

 

The $300 million cautionary tale:

The McDonalds brothers pioneered the modern fast-food system. They famously lost their claim to an estimated $300 million of profits a year, dating back from 1961, when they sold the franchise over to Ray Kroc… and failed to prove a handshake deal was made during the sale.

Do you know what they ended up taking home instead?

A check worth a little over $2 million in total, split between the two of them.

Even adjusted for inflation, that’s practically pocket change in comparison to what they were really owed. Which just goes to show, it doesn’t ever hurt to have the terms in writing.

 

Having a written contract serves as a sound point of reference and, in worst case scenarios, a sound safety net. Profit entitlement agreements, employment contract – all this will save a lot of trouble down the line. Nothing disperses doubt like the legal clarity of a tightly worded contract. Be proactive, answer all the questions before they are even asked.

Regular updates are a Must! 

To combat being left behind, you need to review your employment contracts periodically. They need to reflect:

  • the current arrangement in place
  • the current legislative standards
  • additional arrangements such as licencing and certification required for the role
  • terms for the issuance of company property and allowances
  • protections around confidential information and intellectual property.

If employment contracts are not updated by employers, decisions on the precise terms of the contract could potentially be surrendered to a court or relevant tribunal in the event of a dispute. Don’t leave it to chance. Take matters into your own hands.

Unsure about Anything?

Book a workplace check and a member of our team will visit your workplace to discuss the contracts you have in place, identify key areas of non-compliance, and explore how our services can help your business.

These days, it’s not enough to be sure. You have to be Employsure.

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