Question
of the week Question of the week

Curious. Interesting. Informative.

26 February 2016

Getting it right from the start

Employment Law
Federal

Asked

What's the best practice when preparing an employment agreement for a client? Should the relevant award always be checked?

An award that we checked recently noted that employees are required to have access to their award, and be given a copy of the award. Is this a common term in awards?

Answered

Thank you for the question.

It is certainly best practice to check the relevant industrial award prior to preparing any employment agreements.

When preparing employment agreements, it is advisable for the employer to follow a logical and methodical process in order to ensure that applicable instruments and legal obligations are not overlooked.

Prior to commencing to draft an employment agreement, care should be taken to identify exactly which obligations under statute, industrial award or at common law are applicable to the employee concerned.

It is recommended that, when attempting to prepare the agreement, an employer should first:

  1. determine the law that covers the employee;
  2. determine which obligations need to be met for that employee.

In determining which law covers the employee, an employer should, at a minimum, consult the following:

  • a relevant industrial award or enterprise agreement covering the employee;
  • the National Employment Standards (in the case of National System Employers);
  • any applicable common law agreement, workplace custom and practice, and written workplace polices.

Once the applicable law and obligations have been determined, the employer can set about preparing an employment agreement that meets with its workplace requirements and, at the same time, does not conflict with the applicable minimum obligations and entitlements.

While many industrial awards have similar or the same clauses, there are differences. The actual award applicable should always be consulted.

As you have noted, a common clause in industrial awards is one imposing an obligation on the employer to make a copy of the award available to applicable employees. For example, the Clerks – Private Sector Award 2010 contains the following clause:

Clause 5. Access to the award and the National Employment Standards

The employer must ensure that copies of this award and the NES are available to all employees to whom they apply either on a noticeboard which is conveniently located at or near the workplace or through electronic means, whichever makes them more accessible.

It is vital for employers to ensure that the statutory obligations/minimum entitlements are met. Breaching a term of a modern award will make an employer liable under section 45 of the Federal Fair Work Act. This is a civil remedy provision carrying a maximum penalty of $10,800 per contravention for an individual, or $54,000 for a corporation per breach of the relevant modern award.

It should be borne in mind that industrial awards are intended to operate as a safety net for those covered. Employers are free to provide greater entitlements than that provided by workplace laws and industrial instruments.

Further, industrial awards are not a ‘cover all’ document. There are many aspects to the employment relationship which are not covered by industrial awards. For example, an employer may wish to include obligations as to subject matter such as return of property after termination, confidentiality, the creation of intellectual property and, in appropriate circumstances, fair post employment restraint periods for protecting built up customer good will.

When it comes to preparing employment agreements, getting it right from the start is of vital importance.

Regards

Mentor