Employment contracts for WA employers

A contract should protect the business and still work in the real world.

A strong employment contract records the deal clearly, fits the role and works with the award, agreement and minimum employment standards that apply. A signed document cannot erase a legal minimum or rescue a poorly structured arrangement.

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It identifies the correct employing entity, role, employment type, location and reporting line.

It states pay, ordinary hours and any intended treatment of overtime, penalties, allowances or annualised salary arrangements.

It deals clearly with notice, confidentiality, intellectual property, workplace policies and compliance with lawful and reasonable directions.

It matches the way the work will actually be performed, rather than relying on a generic template from another business.

What good looks like

The contract is one layer, not the whole system.

For many national system employees, the contract sits alongside the National Employment Standards and any applicable award or enterprise agreement. The contract cannot provide less than those minimum entitlements.

Minimum entitlements

Check the National Employment Standards and identify any award or enterprise agreement before drafting pay and conditions.

The real job

Describe the role and employment type accurately. Calling someone a contractor, casual or manager does not decide the legal position by itself.

Pay architecture

State what the salary or hourly rate covers and test it against applicable minimum rates, overtime, penalties and allowances.

Current clauses

Review older templates for changed laws, including pay secrecy rights and limits on many fixed term contracts.

Employer checklist

Before issuing a contract

Confirm which workplace relations system covers the employer.
Identify the award, enterprise agreement or award-free position.
Choose the correct employment type and test any fixed term exception.
Check pay against every applicable minimum, not just the base hourly rate.
Remove clauses that conflict with pay secrecy or deduction rules.
Give the required information statements at the correct time.

Common traps

Clauses that need particular care

An annual salary intended to offset award obligations without a properly drafted clause that identifies the covered entitlements, meets pay-period and record-keeping requirements and leaves the employee better off overall under the applicable instrument.
A term requiring secrecy about pay in a contract made on or after 7 December 2022. The Fair Work Ombudsman says the term has no effect.
A deduction or payback term that unreasonably benefits the employer. The written clause may have no effect.
A fixed term longer than two years, more than one extension, or prohibited consecutive contracts when no exception applies.
A notice provision that provides less than an applicable statutory, award or agreement entitlement.

Real court outcome

The written salary did not make a cashback scheme lawful.

In 2018, the Fair Work Ombudsman reported that a Sydney cafe worker's contract stated 40 hours a week and a $56,000 annual wage. She actually worked 54 hours and was required to pay back $13,952 in cash. The Federal Circuit Court imposed more than $97,000 in penalties, and the worker's total shortfall was $39,686.

The lesson for employers is simple: contract wording and a stated annual salary do not override minimum entitlements or make an unreasonable payback arrangement lawful.Read the primary source: Fair Work Ombudsman, Robit Nominees penalty release

Can an employment contract pay less than an award?

No. A contract cannot remove or provide less than applicable minimum entitlements. It may provide more favourable terms, but the award, agreement and National Employment Standards still need to be checked.

Can I use the same contract for every employee?

A common template can be a starting point, but the role, employment type, classification, pay structure, hours and genuine business protections need to fit each position.

Does a high salary mean the employee is award free?

Not by itself. Award coverage depends on the employer, industry and work performed. A salary above the award rate does not automatically remove award coverage or every award obligation.

Check the source

Primary guidance used on this page.

This page provides general information for employers. Workplace outcomes depend on the employing entity, applicable system, instrument and facts. It is not legal advice. Read the full website disclaimer.

How Stephen can help

Get the contract right before the employee starts.

Stephen can review the role, identify the employment framework and prepare or review a contract that fits the business and the way the work will actually be performed.

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