If you are considering taking on some employees in your business, then it is important to get your legal documents right. Employment law is complicated, and mistakes can be costly.
Firstly, if an employer breaches employment laws (for example, by paying employees less than the minimum wage, or by failing to provide some other minimum entitlements) then there can be significant fines or other penalties. If an employer fails to provide a safe workplace, then they open themselves up to legal action for any injuries or other harm that employees might suffer.
However, in addition to this, there is the issue of business losses or loss of reputation if employees are not adequately managed or are not given clear directions regarding what is expected of them. Fortunately, we have a number of documents which can assist in this regard.
An Employment Agreement (often referred to as an Employment Contract), is a fundamental document in the employer/employee relationship.
It sets out the specific rights and obligations of the employer and the employee, and is unique to the particular employee. Each employee will have their own Employment Agreement, with terms that are specific to them. For example, an Employment Agreement includes details such as:
The Employment Agreement is dated and signed by both the employer and the employee, and at that point it becomes a binding contract. It will be interpreted in accordance with Australian contract law.
The Employment Agreement cannot generally be altered or amended except in one of the ways set out within the Agreement, by agreement between the parties, or otherwise in accordance with Australian law.
For example, within the Employment Agreement, there might be a provision which says that the employer may alter the employee's duties from time to time, by notifying the employee. Or another provision might say that the employee may receive a pay rise, in the employer's discretion.
Alternatively, if the employer and the employee want to alter the terms of the Employment Agreement at some later date, in a way that is not generally provided for within the Agreement, then they will need to prepare a document to show that they have formally agreed to make this alteration. We have an Employment Contract Amendment which may be used for this purpose. For example, employers and employees often use this document if an employee is changing from a casual to a full time role, or if the employee's role is being altered so that they can work 100% remotely.
The Employment Agreement governs the general relationship between the employer and the employee. As such, both parties should keep a copy of the signed version of it, for their own records.
A Remote Work Agreement is actually an Employment Agreement, but it has been designed to be used specifically for employees who are working remotely (also known as "working from home" or "teleworking").
While an ordinary Employment Agreement might work for these employees, our Remote Work Agreement has some additional terms which are unique to the remote work situation, and deal with matters such as any equipment requirements, and any procedures for signing in for work and/or reporting to supervisors.
For COVID-19/Coronavirus specific matters, we also have a Coronavirus/COVID-19 Remote Work Agreement available. This is similar to our standard Remote Work Agreement, but has been adapted to specifically deal with employees who are working remotely as a result of COVID-19/Coronavirus.
A Letter of Offer of Employment is similar to an Employment Agreement, but is much more brief. It is structured as a letter, welcoming the employee to the employer's organisation. It covers the basic details of the employment relationship, such as:
It also briefly addresses confidentiality and intellectual property, but does not do so in as much detail as the Employment Agreement does.
The Letter of Offer of Employment is designed to be a quick and easy document for employers to send to employees as soon as they are hired. Many employers choose to send a Letter of Offer of Employment and then to follow it up with an Employment Agreement. However, as an Employment Agreement goes into a lot more detail, the employee may need some time to go through it before they sign it, and therefore it is handy to have a basic Letter of Offer of Employment to get the ball rolling.
Some employers, however, find that a Letter of Offer of Employment covers everything that they need, so they do not bother to follow it up with an Employment Agreement. As long as the employer has looked at what is contained in an Employment Agreement, is happy to forego the additional provisions that it contains, (and has taken legal advice if necessary), then there is nothing wrong with this. In fact, our Letter of Offer of Employment includes an option to be structured either as a standalone document, or as one that is going to be followed up with an Employment Agreement.
In addition to an Employment Agreement and/or a Letter of Offer of Employment, many employers also make use of an Employee Handbook.
Unlike an Employment Agreement and a Letter of Offer of Employment, this is a more general document. Employers generally only have one version of their Employee Handbook, which they update from time to time as their circumstances or policies change.
An Employee Handbook outlines the general policies and expectations that will apply to all employees - such as how and when employee pays are processed, any presentation standards, leave entitlements and how these are managed, safety procedures, fire procedures, car parking, and various other matters.
The policies set out in the Employee Handbook generally apply equally to all employees (unlike, for example, an Employment Agreement which sets out the specific salary and job duties of the relevant employee).
Furthermore, an Employee Handbook is relatively easy to update. In most cases, the employer makes the update and then distributes the updated Handbook to their employees. Employees are taken to be aware of the updated Handbook, and are required to comply with it once they have been notified of the changes.
In some cases, employers require their employees to sign a copy of the Handbook, to acknowledge having received it and to confirm that they understand it. Our Employee Handbook includes the option to use this structure.
Depending on the terms of the Handbook and of the Employment Agreement, the Handbook may form part of the Employment Agreement. In other words, a term of the Employment Agreement might say that employees are also required to be bound by the terms of the Employee Handbook. Alternatively, the Employment Agreement might not say this, and the Employee Handbook will instead form a set of basic rules, guidelines or policies, but will not form any strict contractual obligations.
Employer policies are similar to an Employee Handbook, in that they apply generally to all employees. However, while an Employee Handbook deals with some relatively general employment matters (such as pay processing, fire procedures and presentation standards), employer policies are able to be used for more specific situations.
We have a number of employer policies available, including:
For COVID-19/Coronavirus specific matters, we also have some additional policies available, including:
As you can see, each of these employer policies deals with a specific employment matter. Many employers pick and choose a few policies that are relevant to their workplace, but often find that they do not need all of them.
It is also possible to implement new policies from time to time. For example, many employers have only recently started allowing employees to work remotely, and therefore have only recently implemented a Remote Work Policy.
Given the complexities of employment relationships, it is important that employers take some time to make sure that they have appropriate documents in place.
Not only does this help to protect them legally, but it also helps to guide their communication with their employees. By working through the relevant documents with their employees, employers will be able to clearly show their employees what is expected of them, and how the employees may thrive and prosper during their employment.
As with any legal matters, if the employer has any concerns about these matters, then they should seek legal advice.