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Safeguard your employment: Six simple checks when signing your contract

You've finally landed that new, high paying job of your dreams. You’re about to sign on the dotted line, but are you sure it's going to deliver all it promises? We spend more than a third of our lives at work, so when you accept your employment contract, it's important to know exactly what you are signing up for.

Six key things to look for when signing your next employment contract:

1. Bonuses

If you have agreed to a bonus when taking the job, make sure this is properly documented in the contract. Check the wording of the clause in the contract to make sure it is binding, and forms part of your contract. It is important that the contract matches what you were promised. For example, if you took the role on the promise of a guaranteed bonus after a certain period of time, or hitting a particular metric, the contract should be clear about this. Wording such as 'at the ultimate discretion of' your employer is not a guarantee, and so should be raised this with your new employer.

2. Award coverage

If you are covered by a modern award or enterprise agreement but receive a salary under an employment contract, many employees wrongly believe the modern award no longer applies.

Don’t be fooled; if you receive a salary or believe you are entitled to other conditions in the award or enterprise agreement, you should check over the award or enterprise agreement to see if this is the case. An employer cannot undercut your award or enterprise agreement protections by placing you on a salary.

3. Being demoted

Check carefully for any clause in your contract that gives your employer the sole ability to change terms and conditions of your employment contract, such as your duties, pay, seniority, or location of work. One area commonly overlooked is the “mobility clause” which affects how far it may be reasonable for you to be relocated in the event of changes in the business in future.

As a general rule, an employer cannot change the terms and conditions of your employment contract without your consent. If you have consented to changes, this may preclude you from later arguing that you were unfairly demoted.

4. Parental Leave

Under the National Employment Standards, an employee with the care or responsibility of a child is entitled to up to one year off work on an unpaid basis if they have worked for 12 months. This also includes long term casuals. Your employer cannot make you serve a longer period before allowing you to have this time off. Your contract should reflect this.

5. Notice of termination

You should always check what period of notice you need to give if you resign, and how much notice your employer needs to give you if you are dismissed.

An employer cannot provide you less notice than what is required under the National Employment Standards. However, you can always bargain with your employer for more notice of termination as an extra protection.

6. Restraint of trade

Always look to see if the employer has put in a restraint of trade clause into your contract, as this may impact your ability to obtain later employment in the same industry.

Shine Lawyers - Employment Law specialists

Contracts of employment are not always easy to interpret, and can give rise to a multitude of issues if things don’t go to plan. If you have any questions about the clauses in your contract, seek legal advice from an employment law expert. It might save you some drama in the long run.

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Written by Shine Lawyers. Last modified: July 8, 2020.

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