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An employment contract is a written contract between an employer and an employee. An employment contract is usually entered into at the commencement of employment for a company or organization. It is important to thoroughly review your employment contract before you sign one so that you know the terms, conditions and what is expected of you during your employment.
The employment contract will generally cover important items including what is expected of you in your role, your working hours, entitlements, location of work, restraint clauses and procedures on termination. If you do not understand a particular clause in your proposed employment contract, or you have an existing contract that you believe you may be in breach of, it is a good idea to seek legal advice to know where you stand.
An employment agreement may contain certain restraint of trade clauses. These clauses are generally included in the contract of employment to prevent an employee from performing or engaging in activities in conflict with the duties they performed while employed in their previous organisation. The main types of restraint clauses include non–compete clauses, non–solicitation clauses, non–recruitment clauses and confidentiality clauses.
Not all restraint clauses can be enforced. In order for a clause of restraint to be enforceable the clause must be reasonable and must protect a legitimate interest. Generally, clauses which are limited by time and geography are enforceable. The Competition and Consumer Act 2010 (Cth) governs the trade clauses in all the states and territories, while in the state of New South Wales the same is governed by the Restraints of Trade Act 1976 NSW. This act provides the Supreme Court of New South Wales, the power to read down restraint clauses if it considers the enforcement of same would be against public policy.
Modern Award is a document that outlines the minimum terms and conditions of employment in addition to the National Employment Standards. It contains the entitlements such as pay, hours of work, rosters, breaks, allowances, penalty rates and overtime. The Modern Award applies to all employees covered by the national workplace relations system. However, where an Enterprise Agreement governs the relationship between an employee and an employer the Modern Award will not be applicable, provided the base rate and conditions of the agreement do not fall below the standards prescribed in the Modern Award.
Your employment contract can generally be varied after execution if the changes are agreed to by all parties in writing or if the agreement is re–executed. A contract may entitle an employer to unilaterally vary the terms of the contract, however the enforceability of such terms and conditions may depend on the particular circumstances of your case.
Express terms are terms which have been formally, expressly agreed by the employer and the employee in writing and contained within the employment contract.
Implied terms are not included in the contract as a clause and are only implied as a duty when it is necessary, often to preserve the power imbalance between employers and employees. Terms can be implied by law, fact or industry custom and practice
If you are seeking legal advice on your prospective or current employment contract please call Pannu Lawyers on (02) 9920 1787 to discuss your matter with one of our experienced lawyers.
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