Why You Should Have Employment Agreements in Your Business

I am often conducting compliance reviews for small to medium sized businesses.  These reviews are designed to identify any issues that may be placing a business at risk in regards to the many legislative areas that govern employment in Australia. This is a large area – we are dealing with laws in industrial relations, Health and Safety, Discrimination, Equal Employment Opportunity, Independent Contractors and the list could go on.

For a small to medium sized business remaining compliant in an ever changing legislative environment is almost a full time job! This is highlighted in the reviews I do, where I am yet to find one business that is fully compliant.

The most common area I need to address with business owners is the lack of employment agreements.  These agreements describe the employment relationship and are essential for establishing the expectations of both parties in their relationship.

In Australia, a common excuse for not having agreements is that the employee is employed under an award and that is sufficient.  Unfortunately, it is not!

An award covers the minimum standards for employment.  It does not contain any clauses for the protection of the business, nor does it assist in the maintenance of standards within the business.  It is designed to protect the employee not the employer.

To explain this I often say to my clients the following: “if you were establishing a relationship with a client, would you ensure that your expectations and their expectations were clearly defined and easily understood”.  For the majority of my clients the answer to this is “Yes”.  When I follow on with the question “well, why shouldn’t it be the same with your employees?” – the penny finally drops!

Another major reason for having employment agreements is for the protection of your business. Clauses should be inserted regarding things like confidentiality, the protection of intellectual property, protection of client lists and employees responsibility to obey company policy.  These and other clauses are essential protections for your company and are definitely not contained in an award. 

At People Smartz, we are more than happy to assist you in putting employment agreements in place for your business.

Contact us to discuss your requirements.

If you already have agreements in place, we currently are offering free compliance reviews for small to medium sized business which include a review of one of your employment agreements.

Book your compliance review today.

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