New Employee? Try the New Contract Tool

New Employee? Try the New Contract Tool

Putting on a new employee can come with a load of paperwork and stress.


One of the most important pieces of paperwork you need is an employee contract. This contract can help protect your business and staff. 


The Australian government has created an easy-to-use employee contract tool for employers to use that can be found here.


We can help you understand what it’s all about and if it is suitable for you and your employee. 


What is the contract tool and why should you use it


The tool helps you build an employment contract and letter of offer that is tailored to your business needs and complies with workplace laws. It also includes easy-to-understand information on all the legal minimums you need to include.


It covers such things as: 


  • base pay
  • start date 
  • hours per week – if they’re part-time or full-time
  • when and how your employee will be paid
  • days and times they’ll work – if they’re part-time or full-time
  • penalty rates and overtime 
  • annual leave 
  • Superannuation obligations.


What employees are suitable for the contract tool?


This tool is suitable for full-time, part-time, or casual employees that are covered by an award and being paid an hourly or weekly wage.  


However, this tool can’t be used for all employees such as:


  • apprentices and trainees
  • seasonal workers
  • independent contractors
  • employees under enterprise agreements
  • employees on salary (due to the complexities of their contract requirements)  


If you are unsure if you can use the tool for your employee, it will help take you through the initial steps to see if it is suitable.


What information do you need to use the tool?


As you are guided through the contract tool, you will be asked to add details about your employee’s terms and conditions. The tool will help you find these details in each section, but you will need to know the:

  • award the employee falls under and 
  • employee’s classification level in the award.

If you’re not sure what the award is, you can use the Fair Work Ombudsman’s Find my award

Tool to find out.


How does an employee contract protect your business and employees?


The right employee contract makes sure you are covered around all your legal requirements including areas that may be a little difficult such as dismissal and required notice period from employees.


When it comes to dismissing an employee, there can be specific minimum notice periods required or equivalent pay (unless they are covered on the list of employees that do not get notice). The tool helps you to make sure you are meeting these obligations that are required with Fair Work


It also works in a similar way for employees, outlaying all the expectations for an employee when it comes to how much notice is required if an employee wishes to move on from the business.  


What other optional clauses does it cover?


If you feel that there may be extra clauses required for your contract, there are also option clauses that you can add for more clarification of expectations and requirements.


Some of these optional clauses may not be needed for your business so the tool lets you decide what may or may not be relevant, meaning they are not legally required but some businesses may wish to use them for clarification of expectations and requirements. 


The options include such things as 


  • probation period 
  • flexible hours 
  • on-call or stand-by requirements 
  • Rosters.


Overall this tool is an easy to use and efficient way to make sure that all your legal requirements are covered, and all expectations and obligations are clearly outlined for both the employer and employee ensuring that this working relationship starts off on the right path.

About Author

Kate Gordon

With over 20 years experience in bookkeeping across Australia and the United Kingdom, Kate Gordon brings a wealth of knowledge by working with a range of clients from various industries. Covering a portfolio from small and medium enterprises to large corporations has led her to become proficient in all areas of bookkeeping.

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