Employment Agreements

Even though there may be nothing in writing, there is an employment contract that exists between every employer and employee. Every employee has a fiduciary duty to their employer.

• The general laws of contract apply. The following must occur for the contract to be deemed to have been accepted.
• There must have been an offer by the employer and an acceptance by the employee.
• There must be consideration, in this case an agreement to pay wages in exchange for performance of work.
• There must have been an intention to create a legal relationship. This excludes volunteer workers.
• The parties must have the legal capacity to enter into a contract.
• The work to be performed must not be illegal.

The contract used by an independent contractor is not an employment contract and has greater possibility for variation of standard conditions. It may be a possible alternative for your business.

An employment contract must not seek to avoid legislated minimum conditions in areas such as:

• Minimum wage and wage protection
• Equal pay
• Annual and public holidays
• Parental, sick and bereavement leave
• Employment protection
• Anti-discrimination protection
• Voluntary defence service leave

These contracts must contain a dispute settlement procedure and a stand-down clause.

Employers should keep an up to date copy of the relevant award and make it available to their employees.

Legislation and awards automatically provide some employment contract clauses and the minimum employment conditions.

• Be careful…. Awards do not include clauses that deal with Intellectual Property ownership and transfer.
• See in particular the UWA v Gray cases below

Preparation before a staff member is hired can prevent a lot of problems when the staff member resigns or is terminated.

Have you considered issues such as:

• A confidentiality agreement.
• Assignment of copyright issues.
• A restraint of trade clause
• If you provide an Employee Handbook, it may include terms and conditions of employment that will form part of the employment contract.
• If the employee is covered by a State or Federal award, these awards specify minimum terms and conditions of employment that will form part of the employment contract.

To avoid allegations of unfair dismissal, it is important to have a documented history of unsatisfactory performance and warnings that were given to the employee. It is prudent to give the employee written warnings and obtain written acknowledgment that the warnings were received.

There are some basic principles that should be considered before dismissing an employee:

• The termination must be warranted
• The termination must be fair
• The employee must be given the required period of notice or pay in lieu
• The termination must comply with the terms of the employee's individual employment contract
• The employee must be paid all amounts owed including: wages; leave entitlements; severance pay; and superannuation.

• Richardson v Oracle Corporation Australia Pty Limited ¹⁾
• Richardson v Oracle Corporation Australia Pty Limited (No 2) ²⁾

• Barker v Commonwealth Bank of Australia ³⁾

• University of Western Australia v Gray (No 30) ⁴⁾
• University of Western Australia v Gray (No 29) ⁵⁾
• University of Western Australia v Gray (No 28) ⁶⁾
• University of Western Australia v Gray (No 27) ⁷⁾

• University of Western Australia v Gray (No 26) ⁸⁾
• University of Western Australia v Gray (No 25) ⁹⁾
• University of Western Australia v Gray ¹⁰⁾

• University of Western Australia v Gray (No 24) ¹¹⁾
• University of Western Australia v Gray (No 23) ¹²⁾
• University of Western Australia v Gray (No 22) ¹³⁾
• University of Western Australia v Gray (No 21) ¹⁴⁾
• University of Western Australia v Gray (No 20) ¹⁵⁾

• University of Western Australia v Gray (No 18) ¹⁶⁾
• University of Western Australia v Gray (No 17) ¹⁷⁾
• University of Western Australia v Gray (No 16) ¹⁸⁾
• The University of Western Australia v Gray (No 15) ¹⁹⁾
• The University of Western Australia v Gray (No 14) ²⁰⁾
• University of Western Australia v Gray (No 13) ²¹⁾
• University of Western Australia v Gray (No 10) ²²⁾
• University of Western Australia v Gray (No 8) ²³⁾
• The University of Western Australia v Gray (No 9) ²⁴⁾
• The University of Western Australia v Gray (No 8) ²⁵⁾

• University of Western Australia v Gray (No 6) ²⁶⁾
• University of Western Australia v Gray (No 6) ²⁷⁾
• University of Western Australia v Gray (No 5) ²⁸⁾
• University of Western Australia v Gray (No 4) ²⁹⁾
• University of Western Australia v Gray (No 3) ³⁰⁾
• University of Western Australia v Gray (No 3) ³¹⁾

• University of Western Australia v Gray (No 2) ³²⁾
• University of Western Australia v Gray ³³⁾