What to look out for in your employment contract

What to look out for in your employment contract

Romeo El Daghl, Solicitor Director of Lawpoint, has created this article as part of our Locimo Experts series.


Congratulations, you have yourself a job offer. Don’t let your excitement rush you through the important stage of carefully reviewing the contract. Of course, I’m going to tell you to send it to your lawyer for review. You don’t know what you don’t know, so having a professional review it will help you avoid significant headaches should issues with your employment arise. But there are things that you can check for yourself, before sending it off to your lawyer for a more thorough review.


1.     Make sure your job title, responsibilities and job description are accurate.


Ensure that the scope of the role matches what you agreed in the interview phase. Your job description regulates what you do day to day but also dictates what your employer is permitted to ask you to do in terms of job tasks. Ensure the contract is as specific as possible rather than containing generic descriptions that are vague and open to interpretation. Also, the contract should include things like hours of work, place of work and the normal spread of hours per day that you are expected to work.


2.     Get the specifics of your salary and benefits in the contract itself.


Double check that the salary reflects what was agreed in person or in your letter of offer. Make sure there’s absolute clarity around whether this is inclusive or exclusive of super. Any additional benefits should be clearly stated such as car allowance, phone, laptop etc


3.     Break down the details around bonuses.


If you have been promised bonuses or incentives, again, that should be clearly defined. Bonuses are usually optional but if in your case they’re guaranteed then your contract should say so. If it is discretionary, what are the KPI’s and performance criteria that must be met to qualify for bonuses. The clearer things are in your contract, the easier your experience will be during your employment.


4.     Get your notice periods to work for you.


Be it for when you resign, or when your employer terminates the contract – understand what the notice period is both ways. This period is really important to get right because if it’s too long it may affect another employer’s willingness to offer you a job because they cannot delay your start date for too long. If it’s too short in the case of termination of employment, it can disadvantage you by not allowing enough time to find another job resulting in a period where you are without an income.



5.     Check that the restraints are fair.


This is often overlooked but very important. It’s a clause that is normally included to prevent you poaching clients or staff, but can also  prevent you working for a competitor at all. This can have serious effects on getting work in the same industry, usually for 3 or 6 months but can be up to 12 or more. Client based restraints may prevent you taking clients with you to new employment even if they were introduced by you to current employment (including friends and family). If a client base is intended to be mobile then a specific carve out should be included in the restraint clause to allow your client base to be transferred with you when you leave.


6.     Look for a standard, or shorter, probation period.


A probation period is the timeframe in which an employer can terminate your contract without any reason. A “try before you buy” phase where the employer tests your suitability for the job. The standard probation period is 3 months. More senior positions may have 6 months. Anything above 6 months should be questioned because it means that you have a longer than normal period of employment uncertainty. A shorter probation period gives you security and permanency, quicker.



As your role changes, so should your contract.


You may start as a casual at a restaurant, and over time, move to a full time, or you may be promoted resulting in your current position being very different from the one you first started in. It is important to ensure that your contract reflects these changes and protects you in your current role. Don’t assume one contract for one employer is sufficient– as your role changes – so should your contract.


The information contained in this article is general in nature and does not take into account your personal situation. It not to be relied upon as legal advice or as a substitute for legal advice specific to your needs/situation.


About Author


Romeo is a Solicitor Director of Lawpoint. After commencing his career in law in 2000, Romeo quickly gained a reputation as a tenacious and committed advocate for his client’s interests. Romeo has extensive experience in a wide variety of litigation matters (acting for both plaintiffs and defendants) and also across a broad range of experience in numerous other practice areas, including commercial law, family law, wills and estates, property and workplace/employment law matters.