Compliant Employment Contracts A Necessity For SMBs.

Almost every manager responsible for a business I have talked to is currently considering whether each staff member is adding value to their business or performing to expectations. Some managers are also losing sleep over whether they can keep their current employee structure with declining revenue or margins.

Most aren’t thinking about whether they have current contracts for their existing staff and think that it’s discretionary expenditure or time that they just can’t afford right now. That’s where they are so wrong.

In a recent case, the NSW Supreme Court awarded 9 months pay to an employee who was made redundant. His contract was not updated by the company when he was promoted and the dispute focused on the terms of termination. If there is a dispute and no current contract with clear termination terms, then the court will decide implied contract terms just as they did in this case.

A well drafted current contract could have avoided the disruption to business, legal defense costs and the termination payment awarded in this case based on the implied term.

Whether hiring a new employee or changing an existing staff members job, employers need to ensure that the contract clearly states the new or changed terms of employment.

To avoid this, all SMB’s should ensure that:

1. All employees have written employment contracts not just a letter of offer
   
2. Your contracts comply with current Australian Employment Law
   
3. All contracts are current. If an employee’s role or duties change a new contract should be entered into.
   
4. Terms of employment are clearly articulated.

The lesson is that small and medium business owners need to be vigilant when it comes to ensuring they have current compliant employment contracts for all their employees to avoid the inevitable time lost from concentrating on their business in these tough times not to mention the significant costs.

By Adrienne Unkovich, MD, Workforce Guardian – Australia’s number one online employment relations service.

About Workforce Guardian:
Workforce Guardian takes the worry out of managing employees by producing compliant employment contracts that are ready to sign in minutes. Our contract generation technology allows you to produce the right employment contract for each employee every time in a simple way - full time, part time, fixed term and casual versions of employment agreements are available through the Workforce Guardian service. Each individual employee contract can be updated in minutes.

For more information see creating compliant employment contracts at www.workforceguardian.com.au – the cost effective online employment relations service that helps SMBs comply with Australia’s employment legislation.

Disclaimer:
This article is intended to provide commentary and general information. It should not be relied upon as legal advice. Formal legal advice may be necessary in particular transactions or on matters of interest arising from this article. Workforce Guardian Pty Ltd is not responsible for the results of any actions taken on the basis of information in this article, nor for any error or omission in this article.