It seems logical that when you hire someone, you include the terms of their employment and their remuneration in an employment contract so that both employer and employee understands their rights, role, responsibilities and remuneration.
Time and time again we see business who don’t have employment contracts in place with their employees. Perhaps just as surprising is the fact that a lot of employees don’t also insist on them.
Why they’re Essential
So let’s have a think about why an employment contract is essential for every employee in your business.
Employment contracts spell out for both employer and employee the terms of the employment. As an employer, failing to put your employment terms in writing can have serious ramifications.
If you’ve ever spent time reading your industries employment award you’ll know that most awards include a paragraph that refers to certain “flexibilities” in terms of how your business applies things like leave loading, overtime, allowances, etc.
However, if you don’t have these items clearly documented and agreed to by both parties then don’t expect any sympathy for Fairwork should a dispute come up between employer and employee.
It’s also important that any flexibilities worked into the terms of your employment contract don’t result in the employee being any worse off than they would be under the terms of the award.
Setting Clear Expectations
Policies and procedures define the expectations an employer has of their employees. If you expect your employees to adhere to a certain dress code, maintain a vehicle to a level of cleanliness, or apply for leave within a reasonable time frame, then having documented policies and procedures in place will ensure everyone understands what is or isn’t expected of them.