Starting a new job is an exciting time, whether it’s your first one or you’re moving on to greener pastures there’s a lot to consider – like how will you celebrate?! What will you wear on your first day? And what’s the commute going to be like?
But before you start planning whether you’ll bike or train to work, you’ll need to review and sign your employment contract. This part can often feel daunting for new workers, but don’t worry – here’s a handy guide for what to look out for in an employment contract.
Is this what you signed up for?
This one might seem obvious, but it’s important – so worth mentioning first. It’s vital to ensure that the details contained in your employment contract reflect what was discussed with your employer. For example, if in your interview you negotiated working from home every Thursday, make sure it's in the contract. If it’s not in the contract, then it’s not guaranteed.
In fact, many employment contracts will have an “entire agreement” clause, which usually says explicitly that any representations made to you (whether orally or in writing) before you sign the contract are not enforceable unless they’re included in the contract. Once you sign the contract and agree to its terms, including an entire agreement clause, you’d have a lot of difficulty arguing that you’re entitled to something you were promised in discussions but that isn’t in the contract.
Understand your salary structure
The most basic salary structure is that your employer will pay you your salary plus compulsory superannuation contributions. Right now you’re guaranteed a minimum super contribution from your employer of 10% of your annual salary – though some employers may offer more. It’s also worth noting that the minimum contribution rate is scheduled to rise several times in the coming years.
But that’s not the only way your salary could be structured. Some other common salary structures include being offered your base salary and super plus commissions, or your base salary and super plus bonus. If there are bonuses or commissions involved, it’s very important to understand how they work and when they’ll kick in. A big bonus might look good on paper, but the conditions around it may make it very difficult to obtain, or the bonuses may be awarded at the employer’s sole discretion, meaning that even if you perform very highly, you may not receive a bonus.
Check your contract so you understand how much notice you and your employer need to give each other to terminate your employment. If your contract doesn’t specify, then the minimum requirements from the Fair Work Act 2009 (Cth) will apply as follows:
1 year or less
Between 1 – 3 years
Between 3 – 5 years
More than 5 years
If you’re over 45 years of age and have been continuously employed by your employer for two years or more, you’re entitled to an additional week of notice if your employment is terminated by your employer.
Is your job fixed term, permanent or casual?
Make sure you check and understand the nature of your employment. The main three types of employment contracts you’re likely to encounter are for permanent employment, fixed term employment, and casual employment.
Permanent employment – means that your employment will be ongoing unless you or your employer decides to terminate it. If you have permanent employment, you’ll have access to a range of entitlements including paid annual leave, paid sick and carer’s leave and notice of termination (or payment in lieu).
Fixed term employment – if you’re on a fixed term employment contract, you’ll have fairly similar entitlements as a permanent employee, but your employment will end at a set date which should be stated in the contract. Generally, proper fixed-term employment contracts can’t be terminated early unless you’ve committed serious misconduct.
Casual employment – Casual employment means that you can be called on to work as needed and will be paid by the hour. As a causal employee you won’t be guaranteed set work hours (aside from minimum shift durations if you’re covered by an award), nor will you be entitled to things like paid annual or personal leave. To compensate for the lack of entitlements, you’ll be paid the minimum base rate plus 25%. This is known as the “casual loading”.
Regardless of whether you’re a permanent, fixed term, or casual employee, your employer is required to have workers’ compensation insurance to cover you should you ever get injured or fall ill because of work. This is important because if you can’t work or if you need medical care, workers’ compensation insurance can provide you with a range of benefits and compensation to help with your recovery.
Are you covered by a modern award?
Modern awards are legal documents made by the Fair Work Commission that set out the minimum terms and conditions of employment for a number of different industries. There are currently 122 modern awards that cover industries ranging from building and construction to hospitality to retail among many more.
Modern awards set out things such as minimum wages, penalty rates, allowances, break requirements and the maximum hours that can be worked in a certain period. If the industry you’re working in is covered by an award, it is good practice to check your contract against the relevant award standards to ensure that you’re receiving everything you’re entitled to.
Don’t be afraid to ask questions
Finally, ask questions if you’re unsure.
We get it, it can often be scary to ask questions to a prospective employer after they’ve just offered you a job. It may feel like you’re making a fuss. But just remember that you’re legally entitled to negotiate and ask questions about your employment.
If there’s anything that doesn’t feel right or you don’t understand, it’s always best to discuss it at the beginning rather than trying to argue over it afterwards. It’ll save a lot of hassle in the long run.
If you need assistance with reviewing your contract or need workplace advice, get in touch to arrange a consultation for just $660 (including GST) with Slater and Gordon’s experienced Employment Law team.
The contents of this blog post are considered accurate as at the date of publication. However the applicable laws may be subject to change, thereby affecting the accuracy of the article. The information contained in this blog post is of a general nature only and is not specific to anyone’s personal circumstances. Please seek legal advice before acting on any of the information contained in this post.