Plain English Guide to Employment Contracts and Employment Policies

It is important to get the employment relationship right from the outset by clearly communicating to new employees the requirements of their job and the culture, practices and policies affecting the workplace. The most important written parts of this communication are the employment contract and workplace policies and procedures.

Do I need to have an employment contract?

It is ideal to have an employment contract. If there is no written contract, the law implies many terms and conditions into the relationship between an employee and an employer: there is an “employment contract” even if there is nothing in writing. If there is no written contract of employment, the terms and conditions of employment will be governed by either a Modern Award or the National Employment Standards, as well as terms and conditions implied by law.

A contract consisting of implied terms can be a real risk for the employer. In particular, it allows an employee to claim “reasonable notice” (open-ended notice, potentially up to 12 months or more) on termination of employment. A properly drafted contract will replace this with clear notice and termination provisions.

Many employment terms and conditions are provided in legislation or awards, which the contract can supplement.

For the sake of clarity from the beginning, it is very useful to have a written employment contract governing the individual relationship between the employee and the employer, outlining hours of work, pay, leave, notice periods, performance standards, and giving the employee notice of any particular conditions applicable to the employment. If there is a significant change in the employee’s role, then there should be a new contract or other documentation making the contractual situation clear.

How do employment contracts and policies interact?

Workplace policies are general standards for behaviour, performance or how the work is to be done.

An employment contract will usually requires the employee to comply with workplace policies as they exist and as they change over time.

However, sometimes policies become part of the contract: this can be dangerous if the policy terms amount to promises to the employee, because failure of the employer to fulfil the promises will then become a breach of contract. It is therefore very important for employers to be careful about the content of policies, and about the interaction of policies and the contract, and especially what the contract states about this.

Employment policies must be clear and communicated effectively to employees if they are to work properly and comply with the policies. They need to be revised from time to time so that they remain current and relevant to employees and they continue to comply with them

What subjects should be covered by workplace policies?

Every business will have its own policies relating to how the work it does should be undertaken.

Some policies are mandatory depending on the your business, revenue, industry or corporate structure. For example:

  • a workplace surveillance policy where an employer wants to conduct surveillance of the workplace or electronics means employers must comply with the Workplace Surveillance Act 2005 (NSW).
  • A whistle-blower policy is mandatory for public companies, large proprietary companies and corporate trustees of APRA-regulated superannuation entities.
  • A modern slavery statement is required for entities based or operating in Australia with an annual consolidated revenue in excess of $100 million.

Aside from the above, employers are able to decide which workplace policies are most relevant to their business. However, you should have policies covering at least the following areas:

  • code of conduct;
  • leave, especially parental leave;
  • sexual harassment, bullying and anti-discrimination;
  • work health safety and positive duty to prevent sexual harassment, sex-based discrimination and victimisation;
  • internet, social media and email use;
  • drugs and alcohol;
  • anti-bullying; and,
  • workplace surveillance (if applicable).

Businesses should also consider these policies:

  • Performance management and discipline
  • working from home

What is necessary for a policy to be “well communicated”?

The policy should be:

  • written in plain English;
  • communicated to employees when it is introduced or changed; and,
  • readily accessible to employees, electronically or in hard copy.

Communication may involve staff input when drafting new policies or training when introducing new policies. Consultation with employees is critically important.

Enforcement of the policy is an occasion to remind employees about the requirements of the policy.

Existing policies must be part of an induction process for all new staff.

How can Coleman Greig help you?

Coleman Greig’s experienced employment lawyers can assist you by analysing contractual situations and advising on the legal and practical consequences, and drafting contracts and policies to comply with evolving employment legislation and regulatory obligations.

If you have any questions in this area please contact the Employment Law Team.

Disclaimer: The information provided above is a general summary and is not intended to be nor should it be relied upon as a substitute for legal or other professional advice.


Send an enquiry

Any personal information you provide is collected pursuant to our Privacy Policy.


© 2024 Coleman Greig Lawyers   |  Liability limited by a scheme approved under Professional Standards Legislation. ABN 73 125 176 230