All Australian employees have a common law contract of employment, either written or unwritten, that sets out the terms and conditions of their employment. Of course, all employees should have a formal written employment agreement, but not having one doesn’t mean an employer and employee haven’t entered into a contract. A written employment agreement can be as detailed or simple as required.
Types of employment agreements
The employment agreement may be based on a workplace agreement between an employer and a group of employees, an industry-based award or an agreement with independent contractors.
A Workplace (or Enterprise) Agreement details the rights and responsibilities agreed between an employer and a group of employees. These types of agreement allow employers to set employment conditions best suited to their business. These conditions are applied on top of minimum conditions set out in the National Employment Standards.
An award is an enforceable document containing minimum terms and conditions and any legislated minimum terms of employment. As with the workplace agreement the conditions set out in the awards apply on top of the minimum conditions in the National Employment Standards.
Independent contractors are self-employed individuals who contract their services to other businesses. Independent contractors have different rights to employees.
Is a written employment agreement needed?
An employment agreement sets out the rights and responsibilities between the employer and employee, and it can also help avoid any disputes arising from differing expectations. For this reason, it is advisable to have a written contract between the employer and employee.
Letter of Offer
Some employers provide a letter of Offer to supplement the employment agreement and to provide a way of capturing and expressing the employer preconditions. Employer preconditions may include requiring evidence of:
- Australian work entitlements.
Some employment positions may also require pre-employment medical and/or security checks.