In brief - Employers should consider areas where they need protection
Case law shows that employers frequently neglect the importance of written contracts of employment. While enterprise agreements, modern awards and the National Employment Standards contained in the Fair Work Act 2009 (Cth)
cover off on many statutory terms of employment, it is important to remember that these statutory benefits are usually orientated in favour of employees. The written employment contract can be used to “fill the gaps” in areas where schools require protection, and which are not dealt with by statutory instruments, for example, matters relating to discipline and dismissal, intellectual property, confidentiality and post-employment obligations.
The employment relationship is fluid and subject to significant change over time. Employers in the education sector should therefore consider reviewing and updating contracts of employment to ensure protection of commercial interests, reflect the changing circumstances of the employment and comply with evolving common law decisions regulating the law of employment.
TOP 5 TIPS FOR SCHOOLS WHEN REVIEWING EMPLOYMENT CONTRACTS
Here are five reasons why it is important to update written employment contracts:
1. Recognise change: If an employee’s duties, position or level of responsibility have changed profoundly over time, the original contract may have been replaced by subsequent changes. This means notice of termination provisions in the old contract may be unenforceable. To reduce legal risks in this area, schools should conduct an audit of old contracts and seek advice about issuing amended contracts if there have been (or will be) profound changes to an employee’s terms and conditions of employment.
2. Workplace policies: A number of infamous employment law decisions over the years have held that where a contract imposes obligations on employees to comply with policies and procedures, those policies and procedures may be incorporated by reference into the contract, unless the employer's reciprocal obligation to comply is expressly excluded. To avoid policies being incorporated into the contract as enforceable terms that can result in litigation, schools should have terms relating to workplace policies professionally drafted to make clear policies do not form part of the contract.
3. Post-employment restraints: Although not widely used in the education sector, restraints of trade are notoriously difficult to enforce. Most restraint provisions we see in contracts are invalid and unenforceable because they have not been properly considered at the commencement of employment. Updating contracts to recognise a promotion or at salary review time is an opportunity to ensure restraints are carefully tailored for the particular employee’s circumstances, as well as ensuring the restraint is reasonable in scope and duration, to improve the prospects of enforcement.
4. Notice of termination: Does the contract include a notice of termination provision? It is surprising how many older contracts do not. To avoid a "reasonable notice" claim in which a court may imply a lengthy period of notice into the contract well in excess of statutory minimums, the contract must include an express notice of termination provision.
5. The devil is in the detail: Does the contract adequately cater for the range of situations that may result in dismissal? For example, is the definition of "serious misconduct" in the contract broad enough to be relied upon in contemporary situations that might include various forms of reportable conduct? Do termination provisions impose onerous obligations on the school to comply with certain steps leading up to dismissal? Does the contract contemplate the discovery of misconduct justifying summary dismissal during the notice period? These are all issues the Courts have explored in recent cases and may be wise to reflect in the written contract.
This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2021.