You may have been teeing up employee contracts for some time now – or perhaps you’re completely new to it – but taking a step back and identifying best contract practice is a must for anyone in the hiring game.
In this post, I cover off some important areas to consider when offering a contract to a candidate – so you can rest easy knowing you’ve put the company’s best foot forward when it comes to employer protocol.
Part 1: The letter of offer
What is it:
The letter of offer confirms the verbal offer and acceptance and is sent with two copies of the employment contract.
Why include it:
A letter of offer is an important part of the contract. It gives your candidate an official offer in writing – that they can hold on to – knowing that they haven’t simply imagined the offer at hand!
And for you as the employer, it is an important document to file – showing the exact date the offer was made, and what you were offering.
What to put in writing:
A basic template might look like the following:
Dear applicant name,
Thank you for your interest in (name of business). As per our discussion, we would like to extend an offer to you for the role of position title commencing on (date).
Please find attached our employment contract for your review and consideration. Please indicate your acceptance of this offer of employment by signing both copies and returning one copy to us by (date). Should we not receive acceptance by this date, this offer will lapse.
Should you have any questions regarding the documents please contact me on your work phone number to discuss. We very much look forward to you joining (name of business).
Your name and position
Part 2: The employment contract
To have a contract or not to have a contract – that is the question!
With small businesses that are growing quickly, it is very common for an employment contract to be hastily pulled together in order to bring on new employees.
Why include it:
Put simply, a contract is a must-have! It lets your candidate know the stipulations of the role at hand, and covers you legally.
For this reason, it is important to write your contract from scratch. Many business owners borrow (or crib from) a mate’s employment contract. What often happens then is that various managers amend them (often unbeknownst to the owner) and they end up with numerous versions, ranging from ones that aren’t legally binding to, in some instances, having no contract whatsoever.
What to put in writing:
Beyond the legal bases, you need to cover with your employment contract, there are certain items that will be candidate-specific. After you’ve selected a candidate, the Hiring Manager should provide all offer details so that the employment contract can be drawn up.
- Initial position title (employees usually change roles over time)
- Where the role is covered by an Award the Award name plus the level of the role (most roles in Australia are Award covered)
- Base salary plus super
- Any incentive or bonus structure aligned to the role (and state that this is discretionary)
- Start date
- Probation period
- Standard working hours & employment basis ie full time, part time, casual or fixed term
- Who the role is reporting to and the title of that role
- Notice period for termination of employment
There are additional clauses that we would suggest you consider including in your employment contracts to optimise protection for your business and make clear the expectations you have of your employees. Some of these are Confidentiality, Intellectual property, Termination of employment, Work health & safety, Privacy.
Part 3: Fair Work Information Statement
When making an offer of employment, the Fair Work Information Statement must be sent out to all permanent employees with their employment contract and letter of offer.
So there you have it. Three parts of the employee contract you’ll need. Now, aren’t you glad you read this post?
Finally, I would recommend that you regularly review and potentially amend your employment contract and related documentation every two to three years, especially if there are legislation changes.
The employment contract and documentation set the framework for the way that you employ people and it protects your business in the long term. It shows that your employees matter to you, so take the time to do it well – and keep this post handy whenever you’re unsure.