5 Important Things to Check Before Signing Your Employment Contract
Employment contracts can be long and tedious or you assume them to be stock standard in format and detail. Therefore you could be forgiven for merely double-checking your salary amount and skipping right through to the signature page and signing on the dotted line.
However, to ensure you are not hit with an unwelcomed surprise in the future, it is highly advisable for you to pay attention to some key clauses and details before you sign off on your new employment contract.
Job Scope and Responsibilities
Ensure that the job scope and list of responsibilities of your role are clearly stated in your employment contract and reflect your previous negotiations with your employer. This manages the expectation of both parties so there is a clear understanding before you commence your employment so that no additional responsibilities which you cannot or do not want to undertake are not imposed.
You should also check that your job title is correct and describes the position you applied for unless an alternative offer has been made to you of which you are willing to accept.
Incentives and Benefits
After confirming your base salary, you should check whether you are entitled to any additional incentives including a relocation package, health benefits, mobile phone allowance, a company parking space, travel expense reimbursements, education allowance, sales commission and bonuses. The terms should clearly state what amount you are entitled to and how you will receive these benefits. Also confirm whether you are required to work on weekends or evenings and whether you will be remunerated for this. You could be entitled to overtime pay or time off in lieu.
After clarifying your remuneration package, look at details such as the conditions of bonus payments (if any) i.e. Is it guaranteed or discretionary? Are all your key performance indicators clearly described and agreed?
Leave Entitlement and Requirements
The National Employment Standards (“NES”) provides 10 minimum employment standards that apply to all employees covered by the Fair Work system. All employers must comply with the NES. The NES provides a safety net for all Australian employees in relation to working hours, leave and termination of employment.
You need to be clear whether you are employed on a full-time, part-time or casual basis to determine your rights and entitlements under the NES.
Also pay attention to company policy regarding any mandatory leave you are required to take. Some businesses shut down operations during the Christmas and New Year holidays which means you would have to take up compulsory annual leave each year during the specified period. Failing to consider this might cause you to have a deficit of your annual leave and be unwittingly taking unpaid leave. Conversely some businesses have their peak period during the Christmas period and you might not be allowed to take any annual leave during that period.
Term and Notice
This is important so you can plan both your short and long term future. In the short term, you need to be aware of your commencement date so you can provide sufficient notice to your current employer of your resignation. Being aware of the completion date of your employment contract allows you to plan ahead as to when you can commence a new job.
You need to give the required notice period should you decide to move on in the future.
Termination and Restrictions
Pay close attention to the termination clause in your contract. Herein lies the list of reasons and the required notice period the employer must provide if they opt to terminate your contract. Ensure that you are aware of your entitlements should your contract be terminated.
Be clear what restrictions you are required to adhere to upon the termination of your contract. These may include clauses of which may limit you from working for a competitor of your current employer or operating your own competing business in a similar geographical location.
The words “intellectual property”, “non-solicit of employees” or “non-compete” may look like standard legal jargon, but these clauses may hinder your career development or your future job prospects if they are not carefully negotiated.
To ensure that you are professionally advised before signing your employment contract, it is important to seek appropriate legal assistance and representation.
Please contact one of our lawyers on (03) 9562 2662 or visit www.jklawyers.com.au.