Who Can Use This Contract?
This contract can be used by all employers throughout Australia, except the following excluded employers:
- Non-constitutional corporation employers in Western Australia
- State public sector employers (except in Victoria)
- Local Government employers (except in Tasmania and Victoria)
If any of the excluded employers wish to use this Contract of Employment – Full Time ("the contract"), they should seek legal advice, as the contract complies with federal legislation which may be more or less generous than that which applies to those employers.
Commentary
This contract of employment (Contract) is suitable for full-time employees. The Contract is not intended to apply to part-time employees, casual employees, or independent contractors.
It is a comprehensive contract, approximately 12–23 pages in length (depending on the content selected when creating the document). For a shorter alternative, consider using the Simple – Contract of Employment – Full Time, which is approximately 4 pages.
Full-Time Versus Part-Time Employment
Full-Time Employment
A full-time employee will generally have:
- Ongoing employment
- Work an average of 38 hours per week
- Set days and hours of work
Note: If an enterprise agreement or award (modern, pre-modern, or state-based) applies to the employee, consult the relevant instrument to confirm what constitutes full-time work, as it may be less than 38 hours.
Part-Time Employment
Part-time employees:
- Work fewer than 38 hours per week
- Still have set days and hours of work
For part-time employees, use the Comprehensive Part-Time Contract of Employment.
Matters Addressed in the Contract
Core Contract Provisions
The Contract includes:
- Nature and status of employment
- Commencement date
- Position and reporting relationship
- Probationary period
- Location of employment
- Hours of work
- Remuneration and leave entitlements
- Compensation for all legal entitlements
- Return of property
- Confidential information
- Policies and procedures
- Superannuation
- Notice periods for termination
- Redundancy provisions
- Medical assessments (including vaccinations)
- Personal information and privacy
Optional Clauses
Optional clauses include:
- Annualised salary and intellectual property protection
- Non-cash benefits, bonus/incentive payments
- Post-employment obligations (non-solicitation)
- Work-related expenses and reimbursement
- Company property (credit cards, laptops, phones)
- Continuing education requirements
Particular Matters to Consider
Certain Employee Classes
Legal advice should be sought for employees in specific circumstances, including:
- Employees covered by modern awards or enterprise agreements
- Sales employees or shift workers
- Employees under 18 years of age
- Senior executives or public sector employees
Circumstances for Making the Contract
The contract's content will differ depending on the employee's role. For example:
- A receptionist's contract will differ significantly from a senior executive's contract
- For new employees, rejecting the contract terms and not performing work under the contract means no employment relationship
- For existing employees, without additional benefits (e.g., promotion or pay rise), the contract may be unenforceable
Award and Enterprise Agreement Compliance
This is a generic contract, and employers must ensure compliance with applicable awards or enterprise agreements to avoid:
- Underpayment claims
- Civil penalties
- Breaches of the National Employment Standards (NES)
Employers should understand:
- Hours averaging and wage frequency provisions
- Award-specific entitlements
This contract cannot override award/enterprise agreement terms or NES minimums.
Compensation for Legal Entitlements
The contract offsets total remuneration against entitlements under industrial instruments. However:
- This clause does not extinguish obligations or prevent penalties for breaches
- Employers must still comply with applicable awards/agreements
Consider alternatives, such as an IFA, annual earnings guarantee, or annualised salary clause.
Post-Employment Restraints
Restraints must be reasonable to protect legitimate business interests. For enforceability:
- Customise restraints to the employee's role and responsibilities
- Include cascading clauses for severability
- NSW: Courts may read down unreasonable restraints
- Other states: Courts will apply or delete unreasonable clauses
Seek specific advice from the Workplace Advice line for drafting enforceable restraints.
Additional Important Considerations
Policies and Procedures
To avoid unintended incorporation of policies into contracts:
- Include clauses expressly excluding incorporation
- Employers should draft policies broadly and comply with them
Other Leave
- Leave entitlements follow NES requirements
- Policies with more generous provisions must be adhered to
- For legal advice on modifying leave clauses, contact the Workplace Advice line
Fringe Benefits Tax (FBT)
Before providing company property for personal use, employers should seek financial advice on FBT liabilities.
COVID-19 Vaccinations
Employers may:
- Require vaccinations for new employees as a condition of employment
- Implement mandates for existing employees based on reasonableness and lawfulness
Legal advice is recommended for vaccination mandates, particularly regarding Privacy Act compliance.
Deduction of Monies on Termination
The contract allows employers to deduct owed monies from final pay. However, enforceability varies. Seek legal advice before processing deductions.
Fair Work Information Statement
Employers must provide the Fair Work Information Statement to new employees:
- Before employment begins or as soon as practicable thereafter
Legal Advice & Support
Note: This commentary is strictly for employer reference and should not be shared with employees.
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