Preferred office location:
Please select your nearest office location so we can show you the most relevant information.
Employment Contract Checklist
Our Employment team discuss this important topic.
What should employees look for before signing an employment contract?
Before signing an employment contract, employees should carefully review every clause — particularly around duties, pay, termination and post-employment restrictions — to ensure they fully understand their rights, obligations and future risks.
The Non-Negotiables in Every Employment Contract
When it comes to employment contracts, it’s not just about signing on the dotted line and hoping for the best. Think of your employment contract as a prenuptial agreement for your professional life, except instead of dividing assets, you’re dividing responsibilities, rights and the occasional awkward team-building exercise.
Many people fall into the trap of not reading their employment contract closely enough, and wind up having costly issues further down the track. These could be easily avoided if time is taken to read the contract and clarify everything prior to signing.
To assist in this, we have written a checklist of 8 things everyone should focus on when reviewing their contract prior to signing to help avoid any unnecessary conflicts down the road.
1. Is your job title and role description properly defined?
When you receive your employment contract, you will want to confirm that your job title, and job role, are clearly stated. Specifically, does the title and role description match what you discussed in the interview/saw on the job advert.
When reviewing the contract, look out for vague terms like “other duties as required”. Terms like these are just HR’s way of saying “we might ask you to do anything, from making coffee, to organising the office Christmas party, to running departments you have no clue about”.
If the job description is too broad, make sure to ask for clarification. You don’t want to be hired as a “Marketing Manager” or an “Accountant” just to end up practically being the office IT support person.
2. What are the notice periods?
The Fair Work Act 2009 specifies minimum notice periods based on your length of service, ranging from 1 to 4 weeks, with an additional week if you’re over 45 and have been with the company for at least 2 years. However, employers and employees can agree to longer notice periods, so double-check what is in your contract.
If your contract says “8 weeks’ notice” but the HR manager claims it’s a typo and it should say 2 and to sign the contract anyway, don’t do it. A contract is a contract, typos and all, so make sure to have that amended to the correct timeframe before signing.
3. How can the contract be terminated?
One of the most important clauses found in an employment contract is how it can be terminated. In other words, how do you (or your employer) get out of the contract.
Make sure to check if the termination can be effected with or without a notice period, as well as any clauses that allow for a summary dismissal (also known as instant dismissal or immediate termination) and ensure they align with the Fair Work Act 2009.
If the contract allows for termination “at the employer’s sole discretion”, you might want to ask for more clarity.
4. What are the specifics regarding your remuneration and benefits?
The main reason we work (apart from the passion for the role you told your future employer you have in the interview) is to be paid. It is important that you understand the remuneration and benefit structure located within the employment contract, specifically looking for things like whether the salary is inclusive or exclusive of superannuation, how bonuses are allocated, or if you receive any other benefits which are included in your total package value.
In addition to this, make sure there are no ambiguities about how and when you’ll be paid, and what your pay actually encompasses. For example, if your contract states that “compensation for all overtime is included in your salary” consider whether your salary is actually reflective of this, or if you’re content with working late nights for free.
5. Are the policies and procedures incorporated into the employment contract?
If your employment contract incorporates or states that you must abide by the company’s policies and procedures, ensure you either have access to these documents, or request to see them before signing.
It should be noted that if you sign a contract which incorporates the companies polices, you must comply with the company’s polices as you are legally agreeing to those terms. Further, claiming ignorance of the polices won’t save you if you accidentally breach them.
6. Are there any post-employment restrictions?
Another important thing to look out for are any clauses which imposes restrictions on you after you have left the company. Common ones include non-compete clauses or confidentiality clauses. These can limit your ability to work for competitors or start your own business after leaving the company. These can also place geographical restrictions on where you can and can’t work, or who you can and cannot work for.
It should be noted that if the non-compete clause is so broad that it prevents you from working anywhere, it might not hold up in court, however, it is best not to test that, and instead avoid entering into the employment contract from the beginning if the restrictions placed in there will likely impact your future goals and job prospects.
7. What method of dispute resolution is used?
Prior to things going south, you should consider what happens in the event that things do go astray. It is important to check and make sure that there are clauses which establish a clear process for resolving disputes.
If there is a dispute resolution clause (there should be), is the way that is outlined something you are willing to do. For example, what dispute resolution method does that clause require you to do (a mediation, an arbitration, going straight to court, a battle to the death (just kidding about the battle (we hope), and whether you agree with it. If not, make sure to ask to have it changed to something more applicable to your circumstance.
In addition, if the dispute resolution process is more complicated than assembling furniture, ask for a simpler explanation, or for the clause to be re-drafted to something more understandable so that there are no nasty surprises.
8. Is the employment contact consistent throughout?
When reviewing your employment contract, make sure that the terms are consistent throughout the whole document. For example, do notice periods match in all relevant clauses, or does the salary package breakdown add up to the total stated. Inconsistencies can lead to confusion and disputes down the line. If you spot inconsistencies, don’t assume they’re harmless. They could be a trap (or just sloppy drafting). Either way, get them fixed to avoid any confusion in the future.
Final Tips
When reviewing your contract, remember to always:
- Read the Fine Print – Yes, it’s boring, but that’s where the sneaky clauses hide.
- Take a Break – After your first read-through, take a breather. A fresh pair of eyes can catch things you missed the first time.
- Get a Second Opinion – If something doesn’t sit right, consult a legal professional. It’s better to be safe than sorry.
- Remember, an employment contract is like a prenuptial agreement for your job. It’s all sunshine and rainbows at the start, but you’ll be glad you read the fine print and reviewed it properly if things do go south.
How can HHG Legal Group help?
*The information provided in this website serves as a general guide and does not constitute legal advice. It is based on our research and experience at the time of publication. Please consult our knowledgeable legal team for any specific inquiries or advice relevant to your circumstances, as the content may not have been updated subsequently.