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?

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

Many terms and conditions are covered by legislation or awards, which the contract can supplement.

For the sake of clarity and understanding right from the beginning, it is very useful to have a written employment contract which governs the relationship individually between employee and the employer, sets out the basics of pay, leave, hours and notice periods, sets performance standards, and gives the employee notice of any particular conditions applicable to the employment.  And 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, for performance or for how the work is to be done. 

An employment contract will usually require 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 says about this.

Employment policies must be clear and must be communicated effectively to employees if they are to work properly. They need to be revised from time to time so that they do not become “shelf-ware” to which no-one pays regard. 

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. 

However, you should also have policies covering at least the following areas:

  • leave, especially parenting leave;
  • discrimination  (equal employment opportunity, grievance procedures, sexual harassment);
  • work health and safety;
  • internet and email use;
  • drugs and alcohol; and
  • bullying; and,
  • workplace surveillance (if applicable).

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

The policy ought to be:

  • written in plain English;
  • publicised to employees when it is new and periodically thereafter; and,
  • readily accessible to employees, electronically or in hard copy.

Communication may involve staff input when drafting the policy, or training when it is introduced. 

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 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.

For more information on how our employment law lawyers can help you with employment contracts and policies, please contact our team in Parramatta and Norwest.

Disclaimer: The information provided in the document 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.