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Importance of Employment Contracts

An employment contract exists when an agreement is made between an employer and an employee that sets out the rights and obligations of each party. As with any contract, the law requires certain conditions to be met before it will recognise an employment contract. These include:

  • An offer of employment which has been accepted by the prospective employee;
  • Each party must provide consideration in return for the obligations undertaken by the other party;
  • There must have been intention by the parties to enter into a legal relationship; and
  • The agreement must be certain and complete.

We recommend putting your employment contracts in writing to ensure the terms of any employment arrangement are clear to both you and your employees on commencement and in the future. Having this documented and signed prior to an employee commencing, is considered best practice and provides protection for both parties, that there is clarity around the terms discussed. We also recommend documenting all forms of employment arrangements, whether it is a permanent, casual or fixed-term employment arrangement. However, for each of these employment relationships there will be different rights and obligations on the parties involved.

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