If you’re a business owner or manager, reviewing your employment contracts regularly is essential. With significant changes to the Fair Work Act 2009 (Cth) and broader workplace laws in recent years, outdated employment agreements can put your business at legal and financial risk.
Here are five key contract terms to consider when reviewing or updating employment contracts:
1. Pay Secrecy Provisions Are Now Unlawful
Under recent Fair Work Act amendments, employers can no longer include clauses that prevent employees from discussing their pay or employment conditions. If your contracts still contain pay secrecy clauses, they may now be in breach of the law and expose your business to penalties.
2. Positive Duty to Prevent Harassment and Discrimination
The legal landscape has shifted significantly when it comes to workplace behaviour. Employers now have a positive duty to take proactive steps to eliminate sexual harassment and other forms of unlawful conduct. Employment contracts should clearly set behavioural expectations and link to up-to-date workplace policies.
3. Expanded Rights Around Flexible Work and Parental Leave
Employees now have enhanced rights to request flexible working arrangements and to extend unpaid parental leave, and employers must address certain criteria when responding to these requests. Your employment agreements should support these rights, not restrict or contradict them.
4. Limitations on Fixed-Term Employment Contracts
As of December 2023, new rules limit fixed-term contracts to a maximum of two years, including extensions (with some exceptions). Rolling over fixed-term contracts may now be non-compliant. Additionally, employers must issue a Fixed Term Contract Information Statement (FTCIS) at the start of each applicable contract.
5. Compliance with Awards and the NES is Non-Negotiable
It’s critical that your contracts do not attempt to override the National Employment Standards (NES) or any applicable modern award. Clauses designed to “set off” award entitlements against salary must be carefully drafted to hold legal weight.
The risks of using outdated or non-compliant employment contracts are real and include: underpayment claims, regulatory penalties, and reputational damage. A thorough contract review ensures your agreements reflect the current legal framework, support compliance, and protect your business in the long term.
Need Help Reviewing or Drafting Employment Contracts?
If you’re unsure whether your contracts meet current employment law requirements, now is the time to act. We help employers review, update, and tailor employment contracts that are both practical and compliant.
Get in touch to schedule a review or request new, compliant templates built for your business needs.