Your helpful employment contract checklist

3 minute read

Found the perfect employment match? Then it’s time make it official. An employment contract helps you set out the terms, conditions, rights and obligations of your professional relationship to your employees and ensures everyone knows where they stand.

Here are seven key elements of any good employment contract.

What to include in an employment contract (PDF 58KB)

Key take-outs

  • A good employment contract clearly sets out your employee's roles and responsibilities, so they know what they're signing up for.
  • Including a probation period allows you to assess if your new hire is a good fit for your business.
  • A thorough contract helps protect you and your employee if the working relationship breaks down.

1. The nature of the position

It’s important to specify whether you’re offering a full-time, part-time, casual or volunteer position. This part should also include the number of hours your new hire will be required to work each week or fortnight.

2. The remuneration

Here, state the salary or hourly rate you’re offering and whether the role is subject to any modern awards, such as overtime or penalty rates.

3. The notice period

Clearly state how much notice both parties must give before terminating the employment. This acts as assurance, should either of you decide to move on unexpectedly.

4. The probation period

A probation period allows you time to determine whether someone is a good fit for the role and your business. It can range from a few weeks to a few months. It’s up to you to determine how long it will take to assess their suitability for the role.

5. Duties

This section outlines the tasks or duties your new hire is expected to perform. This ensures your employees know exactly what they’re signing up for.

6. Leave entitlements

All permanent employees are entitled to annual leave and personal leave. Your contract should state any rules around when the former can be taken and whether you offer any other sorts of paid leave. This could include maternity, community service and long service leave.

7. Sackable offences

Specifying the scenarios that would lead to you terminating the contract helps clarify the performance standards and behaviour you expect from your employee while in your service.
 

Hiring your first employee is a milestone for every small business, and it’s important to get it right. Make sure to check with an employment lawyer if you're not sure on the specifics of a contract.

A detailed employment contract can help prevent potential misunderstandings and set you up for a fruitful working relationship.

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Things you should know

This article is a general overview and should be used as a guide only. We recommend that you seek independent professional advice about your specific circumstances before acting. This information does not take into account your personal circumstances and is general. It is an overview only and should not be considered a comprehensive statement on any matter or relied upon. Consider obtaining personalised advice from a professional financial adviser and your accountant before making any financial decisions in relation to the matters discussed in this article, including when considering tax and finance options for your business.