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The relationship between you and your employee depends on the nature of the employment contract. Many aspects of employment law also depend on it so you need to understand what the contract is and how it is put together.
An employment contract is legally binding as long as it has three elements: an offer, acceptance, and consideration. If any of these three is missing, the contract is not legally enforceable.
It is best practice to have a written contract of employment signed by witnesses, even though the law accepts verbal contracts too. Some awards do require you to tell employees in writing about, for example, their status of employment or hours of work.
An employment contract is very helpful in two cases: when you need to discuss rights, duties, promises and agreements, or if a dispute arises. Make sure the contract means what it says, rather than what it ought to mean, so it does clarify those rights, duties, promises and agreements.
In a dispute, first consider whether the contract has an offer, acceptance and consideration. If it is a legally binding agreement and you breach that contract, for example, not paying the bonus you promised, you are open to legal action.
Employsure advisers can help you make legal employment contracts.
For peace of mind, please call our 24-hour Advice Line now on 1300 651 415