Growing Your Team | Must-Haves To Include In Your Employment Agreements

You’re ready to grow your team in your small business. Congratulations! This is a huge milestone and can be met with a lot of excitement and enthusiasm. It can also be a time of uncertainty though, whilst trying to navigate your way through a new chapter in your business, and making sure you do all the right things as a new employer can become overwhelming - but it doesn’t have to be that way!

There are some useful resources available for small business owners when it comes to employer obligations – a good starting point can be the Fair Work Ombudsman. Here employers will find a range of guides and information about all the things they need to be aware of when hiring employees.

Knowing your legal obligations as an employer is one thing; knowing what needs to be included in your employment agreements to protect both you and your employees, is another.

Below is my list of what I see as the ‘Must-Haves’ for an employer to include in a business’ employment agreements:

Once you have determined that your new team member is an employee (rather than a contractor), you need to clearly outline whether they are being employed on a full-time, part-time or casual basis. This ought to have formed part of your discussions so this should be clear already. The commencement date should be made clear, as well as whether a probation period applies to the role.
Set out the salary for the role – and this should include detail around whether the salary is to be calculated on a pro-rata basis; whether the salary is inclusive or exclusive of superannuation; and if a casual employee, detail the hourly rate and how it is arrived at (for example, does the hourly rate include casual leave loading).
The location or working from home arrangements should be included. This should set out where the employee is required to work from, and if the employer has more than one business location, set this out here. Detail if working from home arrangements apply, and if so, include any specific working from home expectations.
If a national Award applies to the role include that in the employment agreement. This provides crystal clear clarity to both parties and it is an easy reference point to check and confirm entitlements later.
Whilst the minimum leave entitlements are set out on the National Employment Standards (NES), in my view it is best practice to outline in the employment agreement what entitlements the employee has, and confirm whether these are to accrue on a pro-rata basis (for example, for part-time employees). Taking the time to set this out assists with clarity for the parties and avoids confusion later on.
Details of the role, and a list of duties or roles and responsibilities are critical to ensure that the expectations of both parties are clear from the very start. This can be done either in the body of the employment agreement or in a schedule or annexure to be attached.
Technology and social media guidelines have become an important consideration for employers given the digital world in which we live and operate. Any employee obligations around passwords, security, document drive, project management/work scheduling platforms should be set out here. If social media guidelines apply to the role, they should be included here - for example, if you wish to make clear that your employees must not hold themselves out to be representing your business when posting to social media, then you need to clearly outline this.
If confidentiality is important to your business this needs to be clearly outlined in the employment agreement. If confidentiality of clients, client details, project details, or business methods and formula, are important to your business, not only does this need to be set out as an obligation the employee is required to maintain during the term of employment, but this obligation will also extend to beyond the employment relationship. In other words, the duties around confidentiality will not end when the employment ends. If this is the case for your business then this needs to be made crystal clear in the employment agreement.
If the role involves any creative work, it is likely your business will wish to make it clear that the intellectual property in any material created by the employee will remain the property of the employer. If the ownership of intellectual property is not specifically addressed in the employment agreement, the parties can find themselves caught up in a dispute on this issue after an employee moves on.
Non-solicitation and post-employment restraints are important for some businesses. If you wish to prohibit employees from contacting your clients, suppliers, or other team members after the employment relationship ends to entice them away from your business, you need to outline this very clearly in the employment agreement so you can rely on it later if you need to. Similarly, if you wish to include a post-employment restraint then this needs to be very carefully drafted because if this is not done properly, and if it is too broad, it will be deemed to be unreasonable and will not be able to be enforced.
Grounds for termination should be clearly outlined so the employee is clear from the very beginning as to what is acceptable and what is not acceptable conduct. Notice periods that apply to termination should be outlined here, too.
Finally, review and update! In my experience, this is often overlooked. Many employers fall into the trap of treating employment agreements as ‘set and forget’ – meaning once they are signed, they go into the bottom drawer never to be looked at again. Don’t be that employer! I recommend reviewing all employment agreements annually, and updating where necessary. If the role has changed; salary has changed, or if flexible work arrangements have been introduced, these should be updated in writing. Employment Agreements can be updated either by a written record between the parties setting out the change (for example, by email) or by signing a new employment agreement that has been updated.