While there is no legal requirement to have a written employment contract with employees or any policies and procedures, the absence of either can lead to uncertainty and/or misunderstandings between an employer and employee, which may consequently result in unintended liability or a costly and unnecessary legal dispute.
Employment contracts
Employment contracts are crucial documents that employers should have in place when engaging employees. A written employment contract provides certainty for both parties regarding the terms and conditions of employment. It outlines important details such as the duties of the role, remuneration and benefits and leave entitlements, which can help avoid future misunderstandings between the parties. Additionally, including clauses pertaining to confidential information, trade secrets, and intellectual property can minimise the risk that employees will misuse this information and provide employers with better access to remedies in the event their rights are infringed upon.
Written employment contracts also allow employers to tailor specific clauses such as restrictive covenants, typically for senior executives or those employees with access to highly confidential information / client relationships.
Policies and procedures
Employers should also consider implementing workplace policies and procedures to provide additional guidance for employees relating to behaviour, expectations, and processes within a given workplace.
Implementing policies and procedures in addition to an employment contract may also enable employers to discharge legislative duties. For example, implementing a sexual harassment policy may allow an employer to demonstrate that it has discharged its positive duty to eliminate workplace sexual harassment.
Behavioural policies can also be used to set the standard expected by an employer in the workplace, and the consequences of breaching such standards. These policies can extend to regulate behaviour that is not addressed by legislation, such as the dress code expected in the office, acceptable use of social media, and IT and email policies.
Employers should take care to make clear that workplace policies and procedures do not form part of employment contracts. Why? Because this will allow employers to unilaterally amend their policies without seeking consent from employees, and will mean that employers are not contractually bound to any of the content found within a policy.
Keeping up to date
Given that there have been many recent legislative updates, some of which are referenced in our summary here, it is a timely reminder for employers to conduct a general review of their existing employment contracts and policies and procedures to ensure that it incorporates the most recent legislative amendments and otherwise to ensure continued compliance.
For further information, please contact:
Kristy Peacock-Smith, Partner, Bird & Bird
kristy.peacock-smith@twobirds.com
