Employment Contracts
Staff Entitlements

Core Agreement Information

All staff that are employed in any organisational size are covered by the basic rights set out in the Australian Fair Work Act 20091 in the National Employment Standards (NES). There are a number of entitlements all staff are given by the NES. The casual employees base set of entitlements are: (i) unpaid carer leave, (ii) unpaid compassionate leave, (iii) community service leave, and for casuals over 12 months in a business, the employee has the right to (iv) request flexible arrangements and, (v) has access to parental leave.

For non-casual workers the NES provides: (i) minimum weekly hours, (ii) requests for flexible working arrangements, (iii) parental leave and related requirements, (iv) annual leave, (v) personal carer and compassionate leave, (vi) community service leave, (vii) long service leave, (viii) public holidays, (ix) notice of termination, (x) redundancy pay, and every employer must  (xi) provide each employee with a copy of the Fair Work Information Sheet.

The Fair Work Information Sheets provide employees with information about awards, the Fair Work Act, workplace rights, flexible hours, termination, the Fair Work Ombudsman, the Fair Work Commission and other important information on how to find help should there be a situation which requires assistance. The core agreement also typically states how a dispute resolution or unfair dismissal may be handled (e.g. should the employee performs a specified unlawful act then the organisation reserves the right to dismissal).

The entitlements for each employee should be clearly expressed in the core employment contract that is issued when an offer of employment in made. The purpose of having a contract in place is so that the employee is not worse off than the minimum legal entitlement. The contract should be very clear on what the employee is given (including enterprise and other registered agreements), probation, safety, how to resolve disputes3 and dismissal.

Another legal right which is also expressed in an employment contract is the right to work without harassment and bullying behaviour4. This legal right also applies to work experience students, outworkers, volunteers/contractors and volunteers. Often there is a paragraph (otherwise known as a “clause”) in the core contract which talks about this right.

In some form or another, the core contract will talk about  reading more detailed information in another section. These sections are called the Appendices which also apply to the contract, but they are flexible and they may change. So what are these additions?

Appendices to the Core Employment Contract

These are the important sheets of information that are “companions” the core contract. There is far too much information to possibly write into a core contract which is why these additions are a good idea. The core contract should focus on the main entitlements and a paragraph is added in that core contract to point to reading about any industry related, company-centric or role specific additional information in another section at the back of the contract. After treating the additions in this way, the core contract is protected, stays in place, is valid. If a change needs to happen to those additions it’s easy to do without it affecting the core agreement.

These additions are often called “Appendices” or “the Appendix” and are usually numbered (e.g. Appendix 1, Appendix 2, Appendix 3, etc). Each organisation can have different information sheets in their Appendices. For example detailed information about the Conditions of Service, Company Culture Statement, Pre-existing Injury Declarations and the all important Position Description.

Position Descriptions (PDs) are handled as a separate item so that they are flexible enough to grow as the organisation grows. PDs allow the employee to perform a variation in their role without having to renegotiate their entire terms of employment. If the role has changed significantly then a whole new contract does need to be provided to capture all the new and relevant information changes (including pay rate scale changes).

The Flip Side: Business Owner Protection

As weighted as it may appear toward the employee, employment contracts are also in place to protect the Business and the Business Owner. It provides clear, written, documentation that covers the business should the employee believe they are entitled to more or were not provided with equal benefit.

Take for example the story of a plumbing organisation in Victoria who allegedly underpaid their 20 year old employee $26,8825. The plumbing business did not specify in writing or in any formal way, that the staff member was an apprentice, they did not sign the employee up to an apprenticeship and incorrectly paid the employee lower apprentice rates (a third of a full rate employee). The business also did not correctly provide leave entitlements, travel allowances, pay slips, overtime hours and a multitude of other basic entitlements during the three months when the employee was working with them.

Not providing an proper and clear employment contract meant the business was left wide open for legal action and, in this case, a hefty bill. An employee contract would have resolved issues of entitlements, rates, hours etc, and provided the employee with the opportunity to either accept or reject the role before they began. Saving the business on time and thousands of dollars in a potential lawsuit.

The additional information (or Appendix) of a position description must accompany contracts and advertisements for available or existing roles. It  provides added protection for businesses because it lists out the specific tasks that the role is required to perform (and expected targets). So coupled with the core contract, the position description gives a very fair view of what a role will involve.

Making it clear to prospective recruitment candidates (and existing staff) what you need in your business, what they will receive and how they will be asked to contribute to your business, will not only provide much needed protections, but it makes good leadership sense.

Leadership in a business means actively communicating a message of expectations from the offset. Providing clarity to the business and all its members means everyone knows what they need to do to meet expectations.

Fringe Benefits of Contracts and PDs

On a lighter note, there are many positive benefits of position descriptions and employment contracts that goes far beyond legal requirements and protections. When a business has successfully attracted the mix of staff that they need to grow the business further, these documents act as a guide to greater things.

For example, staff may informally view their position description as a “baseline” for performance, where they will seek out what is required to go above and beyond those expectations. This adds value to an organisation, brings a new dimension to your customer’s experiences, and may even provide repeat or referral customers for a business.

In many businesses position descriptions are used as a form of promotion or goal setting for those staff members who want to move into a more senior role. The staff may request a copy of the senior role and can make personal efforts to go above and beyond their role in order to be taken into consideration for the desired position.

Another use for position descriptions and contracts is to enable a person in a role to expand, learn new skills, provide incentive for greater pay scales, and add more knowledge and expertise to their experience in the business.

Promoting a positive attitude toward position descriptions and contract entitlements can start a new wave of culture in a business. It attracts more motivated staff and creates a unified team that focuses on goals, customers, and all the other areas that makes a business, a great one.

Online References

Additional Resources
Employment Contract Templates are available from Action Centre.

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