Employment Contract and Types of Employment

The paid staff members of your organisation agree to work on certain tasks in exchange for money. This is a legal contract, even if it is not written down. In order to be clear with staff about what their status in the organisation is, it is best to ensure every staff member has a written letter of appointment or contract.

When someone is hired under a verbal agreement, there is always a strong possibility that the terms of the position are understood differently by each party. Verbal contracts (e.g. verbal agreements about what the staff member is going to do) are legally enforceable, but written ones help minimise confusion and disputes.

Having an employment contract is different from being a “contract” employee – meaning having a fixed term contract that will expire on a certain date. A fixed-term contract means that a person is employed for a fixed period with no guarantee of ongoing work in that position at the end of the contract.

A staff contract should specify the type of employment a staff member is entitled to, such as:

• permanent employment, where the organisation commits to employing a staff member on an ongoing basis;
• fixed-term employment, where the staff member has a specified period of employment and a pre-determined end date
• casual employment, where employment can be terminated at any time

Different employment arrangements attract different conditions. For example, casual employment will generally attract a “casual loading”: additional wages in lieu of sick leave and holiday pay.

It is important to check and understand the type of employment arrangements and the entitlements that they attract under the relevant Award or your organisation's Enterprise Bargaining Agreement.

An employment contract must contain the following elements:

• An 'intention' between the parties to create a legal relationship;
• An offer made by one party and accepted by the other;
• An intention to reimburse or pay the employee in some way;
• Both parties must be legally capable of making a contract, and genuinely consent to it; and
• The contract mustn't be for illegal purposes.

Two further important points

• The offer of the job has to be met by an unconditional acceptance. Don't think you can fix up the terms later on.
• New employees should sign the written contract before they commence duties.

Back to Staff: Employment Contracts and Agreements

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