Do’s and Don’ts before signing an employment contract

For many employees, accepting a new job can be an exciting moment which can become sour when the representations made by the employer during the employment interview do not eventuate.

When can an employee make a claim for deceptive conduct?

Where an employer has either deliberately or recklessly engaged in misleading or deceptive conduct or did not have a reasonable belief in the representation, an employee may be entitled to pursue the employer for misleading and deceptive conduct. Clause 31 of the Australian Consumer Law states:

“A person must not, in relation to employment that is to be, or may be, offered by the person or by another person, engage in conduct that is liable to mislead persons seeking the employment as to:
(a) The availability, nature, terms or conditions of the employment; or
(b) Any other matter relating to the employment.”

When does the law apply?

The Australian Consumer law also applies to statements and representations that refer to future matters such as promotion; bonus and shareholder schemes; any future opportunities; terms of engagement and even the financial viability of the company.

Similarly the Section 345 of Fair work Act (Cth) 2009 provides that a person must not knowingly or recklessly make a false or misleading representation about the workplace rights of another person; or the exercise, or the effect of the exercise, of a workplace right by another person. This provision prevents misleading statements about entitlements under an award or Industrial agreement.

In practice, during the course of the recruitment and selection process, the parties may discuss many things and often representations and agreements are made about terms and conditions but not necessarily carried through such as:

1. Reviewing remuneration annually including failing to review performance against objectives set at the end of each relevant period for the purpose of determining entitlement to the Bonus; or
2. Failing to formulate a set of objectives relevant to the promised bonus or commission.

If the employer is unable to prove that they had reasonable grounds for making the statement then they can be held liable. If successful, under Section 236 of the Australian Consumer law an employee can recover significant damages.

Before you sign the contract, keep in mind

Before signing a contract of employment ensure that all of the terms and conditions discussed and agreed to are documented. If the document does not cover everything agreed to, an employee may be prevented from pursuing a claim.