Employment Contract

What is a contract of employment?

A contract of employment is a legally binding document that is being used to set up employment relations between a worker and an employer. Employment contracts are normally used to establish employment and working relations for full-time or part-time work, casual work, remote work, or other types of working arrangements. This employment contract agreement template defines the most key elements a comprehensive and solid template must have:

• role description and job duties
• duration of employment
• termination of employment
• probation period (if applicable)
• remuneration details
• working hours
• sick leaves and vacations and many more.

The parties involved in an employment agreement Australia are an employee and an employer. An employee is usually an individual who is being hired for work and shall be at least 18 years old. In a limited number of cases, Australian laws provide the possibility to hire individuals below the age of 18. This is especially the case in entertainment industries (e.g., ads, movies, TV shows). An employer is always a business or organisation that wants to hire a qualified professional to perform certain work in exchange for remuneration.

What is the difference between an employment agreement contract and a service contract?

The key feature of all employment contracts is that they define a clear legal framework within which an employee is expected to perform their regular job duties according to the agreed schedule and manner under an employer’s direct supervision. This is what differentiates a standard employment agreement contract from a services contract or independent contractor agreement.

In the case of a services contract, a service provider is free to work any hours and days to achieve the necessary result. In its turn a client cannot request a service provider to work specific hours or in a specific way. All in all, the parties under a services contract are independent individuals, while under an employment agreement there are relations of subordination between an employee and an employer.

What are the different types of employment contract templates?

Using the FasterDraft employment contract tool, you can customise the following:

• casual employment agreement template (when an employee works flexible hours that are determined on a case-by-case basis)
• full-time employment contract agreement template (when an employee works at least 40 hours per week as per the agreed schedule)
• part-time employment agreement template (when an employee works at least 20 hours per week according to the defined schedule)
• remote contract of employment template (when an employee works from home or other locations outside of an employer’s office).

What shall we use this employment agreement template Australia?

Having a comprehensive employment agreement template for Australia is suitable for:

• small businesses and organisations that need a reliable legal template to hire their first employees;
• HR departments and recruiting professionals who seek a standard employment agreement template to hire new employees;
• large businesses that look for a solid employee employment agreement they can use on a daily basis; and
• individuals who look for various job offerings and want to protect themselves against unfair employment practices.

What to include in an employment agreement template?

Australian laws define the rigid legal framework all employers and employees must follow when signing employment contracts. Inclusion of all key elements is a must to make sure the final document is complete and legally valid.

List of parties

Every employment agreement template Australia shall reflect identification details of the parties involved. This is essential for a number of reasons.

First, when paying a salary, the name of an employee indicated in the contract shall match with an employee’s name on a bank account. This is particularly important while avoiding additional questions from the bank.

Second, an employer’s name allows one to clearly identify a person responsible for paying remuneration, social benefits, and pensions and providing sick leave and vacations, as well as complying with other Australian employment laws and regulations.

Finally, the parties whose names are listed in the preamble to this employment contract must also sign the document.

Job Description

This is the most important part of every sample employment contract template, as it basically defines the terms and conditions of employment. Thus, before signing any employment contract in Australia, you shall carefully read what is expected from you at work. Once the document is signed, you won’t be able to reverse back all or some conditions of employment.

All in all, the parties must agree on the following:

• role name or job title;
• name of a supervisor or immediate manager;
• list of job duties; and
• working schedule and working hours (e.g., Monday to Friday from 10 am to 4 pm).

Probation Period

One of the most common, though not mandatory, elements for employment contract Australia is a probation period. This is a limited period of time after the start of the employment within which an employer has time to check if an employee’s skills and qualifications match the role. The probation period cannot last forever. Even though there is no statutory regulation for the maximum duration of a probation period in Australia, most employers tend to make it between 3 and 6 months.

Upon the end of the probation period, an employer either can end the existing employment contract or make it permanent.

Compensation Package

Another important element of employment agreement templates in Australia is the compensation package, which includes not only remuneration but also additional bonuses, benefits, and compensations. Let’s delve into it in more detail.

• Remuneration. A template for employment contract in Australia allows an employer to define an annual, monthly, weekly, or even hourly remuneration. It is most important that the sum be indicated before taxes (i.e., a gross amount).
• Payment Terms. An employee must be paid every month for the work done in the same month. At the same time, Australian laws are quite flexible with regard to the frequency with which such payment should be made. For example, an employer could pay twice a month, at the end of every week, or at the end of every month. The key element is that payment of the whole salary shall be done at least once a month.
• Payment Instructions. Inclusion of payment instructions in a sample contract of employment template is another mandatory element. This is basically the list of banking details and payment methods an employer shall apply when paying a remuneration.
• Additional Bonuses. Some Australian contract of employment templates also provide information about additional bonuses in case of a good working performance. It is important to remember that paying additional bonuses is an employer’s right rather than obligation. Thus, inclusion of this element is not mandatory.

Termination

No one could be forced to perform the work they do not want to do. Thus, an employee shall have the right to end an existing staff employment contract at any time by sending a prior written notice to their employer. The notice period is a contractual provision that parties are free to determine on their own. For example, for more senior positions like managers or heads of departments, a notice period could be between 30 and 60 days. While for the rest of the positions, a notice period between 15 and 30 days could be enough.

Applicable Law

Last but not least, another important element for every employment contract agreement template in Australia is the definition of applicable law. Australia has six states, thus parties must choose the law of one state that shall apply to the provisions of the present contract. For instance, in the case of an employment agreement template NSW, it means that the laws of the state of New South Wales apply automatically to this contract.

Usually parties select the state where an employee will perform their working duties or where an employer’s business is registered.

How to customise this employment agreement at FasterDraft?

To get a personalised legal document template, follow a few easy steps below:

1. Click the “Create Document” button.
2. Answer simple questions in the form.
3. Select a template’s format—employment contract template Australia PDF or Word.
4. Make a payment.
5. E-sign, download, print, and use this document.