Avoid These 8 Common Employment Contract Errors

Employment contract errors are common in businesses of all sizes despite how impressive their legal teams are. From insufficient visibility to inconsistent language, employment contract mistakes often prop up throughout the contract lifecycle. Employment agreements are considered the basis of any relationship between the employer and employee. 

Each year, the Employment Court and Employment Relations hear hundreds of cases as employers make mistakes or breach obligations related to employment agreements. The penalties in such cases usually run into tens of thousands of dollars. People usually opt for an employment contract lawyer in such cases. In this blog, you will learn about eight common employment errors. 

Common Employment Contract Errors 

The eight common employment contract errors are as follows:

• Failure To Have An Employment Agreement

A written employment agreement is necessary for any employment relationship. This can apply to all types of employment, from part-time, casual to permanent full-time. Without exception, it is always important to sign an employment agreement with any employee before they start work. It doesn’t matter how long they will be in the business or how many hours they will work. 

• Failing To Sign The Agreement Before The Employee Start Work

If employees start to work before an agreement is signed, they will automatically become permanent employees. The fixed terms usually do not apply as there needs to be a clause in the agreement that sets out the reason for the fixed term. 

This has to be agreed upon before the employee starts work or at a later time with the employee’s consent. The 90-day trial period might not apply as the agreement should be signed before the employee starts working for an employer. If the employee begins work and neither the employer nor the employee signs the agreement later, it will be too late. The employee may have already been employed. 

• Failure To Keep Copies Of The Agreements

An employer will often have an agreement signed but may be unable to locate the specific copy in their records. As per the law, employers must keep a copy of each signed employment agreement and provide a copy to the employee. 

Before you hire contract lawyers in Perth, you must know that employers are also required by the law to keep a copy of each draft agreement provided to the employee to consider. This is so even when an agreement is signed later. These copies can also be retained electronically or in hard copy. 

• Failing To Sign The Appropriate Type Of Agreement

There are usually two errors that you can find here. First, employers often fail to differentiate between the types of employees like the permanent, casual and fixed term. When treating someone as casual when they are working fixed hours regularly can result in them becoming permanent employees.

One of the latest court decisions held that the lack of funding for a role would not be considered a good reason for the fixed-term nature. This is because redundancy provisions can only deal with a loss of funding. True fixed terms are only for covering a one-off project or absence, such as maternity leave, where “disposable workers” do not get the benefit when there is ongoing work on a succession of projects. 

Employers are also known to categorize people as contractors and not as employees improperly. There are multiple steps to decide if a worker is a contractor or an employee in disguise. Many people opt to hire employment lawyers in such cases, and in a case that happened recently, an employer got fined as he was treating a young employee as a contractor for around ten months. The employer was made to pay compensation, holiday, sick pay and specific contributions amounting to $20000. 

You must ensure that you understand the difference and also sign the appropriate contract of services for employees or contract for services for a contractor. You can take a look at the available guides for distinguishing an employee from a contract on the internet. 

• Not Consulting Before Making Any Changes

You cannot unilaterally alter employment agreements, as an employee’s consent will be required. This is why you must not put things in the agreement that you wish to change without any form of consultation, such as policy manuals or codes of practice. 

You must have a general clause that the employee will follow all the rules and policies; after this, you can provide a copy of the manual. You must not build the clauses in the agreement. You should not change the terms, conditions, and clauses without the employee’s consent but only after consultation. 

Various recent circumstances have seen employers unilaterally change the hours and pay. The outcome of these moves is seen as cases reaching the ERA. But it should not be expected that it will go well for employers who are unable to show genuine consultation and agreement. 

• Unable To Have The Necessary Clauses

It is also essential that the employment agreement has all the important clauses. You should not rely on a clause that is not there in the agreement, and you cannot try to impose any clause later. In one of the latest cases, an employee was suspected of using drugs. The agreement signed by both parties lacked a drug testing clause too.

The employer looked to implement and enforce a drug testing policy after the allegations were raised. As per the Employment Relations Authority, employers cannot implement and apply policies after any incident occurs. After this, the employer was ordered to pay the employee $23,000 in compensation and lost wages. The issue could’ve been avoided had the drug testing clause been in place. 

• Imposing Obligations On Your Company Accidentally.

An employee is usually bound to follow the terms of an employment agreement as an employer is. Your intent will not matter when it comes to if you need to fulfil contractual obligations. This will create a problem if you accidentally provide an employee with a contract that will provide her with more rights and benefits than what is available.

Before hiring top contract lawyers in Perth to help with employment contracts, you can take a look at this example. If there’s a permanent employee, then he or she might be entitled to a specific amount of paid leave. If this contract is offered to a temporary or casual employee, you may have to offer paid leave to that employee. An administrative mistake cannot be a defence against a breach of contract. 

• Forgetting About The Implied Terms

The employment contract lets you follow written provisions, but you also have to abide by implied terms made by the contract. There are some terms, such as a duty of mutual trust, that are implied in each employment agreement that is signed. A lawyer can help explain to you the full extent of the express and also imply the obligations that your company is taking on with a contract you draft and want to present to a worker. 

Contact Employment Lawyers Perth

Whether you are an employee or an employer, you can take the help of an expert lawyer in employment contract cases. Contact Employment Lawyers Perth, one of the top law firms where you can access the best employment contract lawyers who can help with legal employment matters or help sort contract issues between employees and employers.