Employment Contracts By Melbourne Lawyers

28 October 2025

Employment Contracts: What Every Melbourne Business Should Include

A well-drafted employment contract is one of the most important tools a business can have. It sets clear expectations, protects your organisation from legal disputes, and ensures compliance with Australian employment law. Yet many businesses in Melbourne still rely on generic or outdated contracts — often leaving them vulnerable to costly misunderstandings or Fair Work claims.

At Henty Lawyers, our experienced employment and workplace lawyers in Melbourne help businesses of all sizes prepare tailored employment contracts that align with the Fair Work Act 2009, protect their interests, and support healthy workplace relationships.

Here’s what every Melbourne business should know about creating legally sound employment contracts.

Why Employment Contracts Matter

An employment contract is more than just a formality — it’s a legally binding agreement that defines the terms of employment between an employer and an employee. When drafted correctly, it:

  • Clarifies expectations on pay, duties, and performance.
  • Reduces the risk of disputes over working conditions or entitlements.
  • Protects confidential business information and intellectual property.
  • Ensures compliance with employment and workplace legislation.
  • Sets clear boundaries for termination, notice, and post-employment obligations.

Without a well-structured contract, misunderstandings can quickly escalate into legal disputes, often costing far more to resolve than the effort of preparing a proper agreement from the start.

The Legal Framework: What You Must Comply With

In Australia, employment contracts must comply with the Fair Work Act 2009, the National Employment Standards (NES), and any relevant Modern Awards or Enterprise Agreements.

The NES outlines 11 minimum entitlements that apply to all employees, including:

  • Maximum weekly hours
  • Requests for flexible working arrangements
  • Annual, personal, and parental leave entitlements
  • Notice of termination and redundancy pay
  • Fair Work Information Statement requirements

Employers cannot include terms that undercut these minimum standards — even if both parties agree to them.

Our employment lawyers in Melbourne regularly review contracts to ensure compliance and prevent employers from inadvertently breaching workplace laws.

Essential Clauses Every Employment Contract Should Include

While the details of an employment contract will depend on the role, industry, and employment type, there are several key elements every business should cover.

1. Position and Duties

Clearly outline the employee’s position title, reporting structure, and core responsibilities. A well-defined role description helps prevent disputes about what is — and isn’t — part of the job. Including flexibility clauses can also allow you to adjust duties within reason as the business evolves.

2. Employment Type

Specify whether the position is:

  • Full-time
  • Part-time
  • Casual
  • Fixed-term or temporary

Each category has different entitlements under Australian law, so it’s vital that your contract reflects the correct type of employment arrangement.

3. Remuneration and Benefits

Detail the employee’s rate of pay, payment frequency, and any additional benefits such as superannuation, bonuses, commissions, or allowances. Ensure the rate of pay meets or exceeds the applicable Modern Award or National Minimum Wage.

It’s also wise to include clauses regarding:

  • Overtime and penalty rates
  • Salary reviews and performance-based bonuses
  • Deductions (only when lawful and agreed in writing)

4. Hours of Work

Outline standard working hours and expectations regarding flexibility, overtime, or shift work. For full-time and part-time employees, specify whether hours are fixed or may vary. For casuals, include clear references to the nature of casual employment and the casual loading percentage.

5. Leave Entitlements

Refer to the National Employment Standards and any additional company policies. Common types of leave include:

  • Annual leave
  • Personal/carer’s leave
  • Parental leave
  • Long service leave
  • Compassionate leave

Be careful not to draft clauses that restrict leave entitlements below the NES minimums.

6. Probation Period

Including a probation clause allows employers to assess a new employee’s suitability for the role, typically for 3–6 months. During this period, termination procedures are usually simplified — but must still comply with the Fair Work Act.

7. Confidentiality and Intellectual Property

Every business should include a confidentiality clause to protect sensitive information such as client data, pricing models, and trade secrets. Similarly, an intellectual property clause ensures that any work created by the employee during employment remains the property of the employer.

8. Conflict of Interest and Secondary Employment

It’s important to specify whether an employee can hold other jobs or business interests while employed by your company. This helps prevent conflicts of interest and protects your business’s competitive advantage.

9. Termination and Notice Periods

Set out the terms under which either party may terminate the employment relationship, including required notice periods and payment in lieu of notice. Include details about termination for misconduct or breach of contract to ensure procedural fairness.

10. Post-Employment Restraints

To safeguard your business from unfair competition, consider including non-compete, non-solicitation, or non-poaching clauses. These clauses restrict former employees from using confidential information or contacting clients or staff after leaving.

However, restraint clauses must be reasonable in scope, duration, and geographic area to be enforceable under Victorian law. Our employment lawyers can help ensure your restraint clauses strike the right legal balance.

Common Mistakes to Avoid

Even well-intentioned employers can make critical mistakes when drafting or updating employment contracts. Some of the most common include:

  • Using templates from the internet that don’t comply with Australian law.
  • Failing to update contracts after changes to awards or legislation.
  • Including unlawful clauses, such as requiring employees to waive statutory rights.
  • Not providing written contracts to casual or part-time employees.
  • Overly broad restraint clauses that courts are likely to reject.

By engaging a specialist workplace lawyer, you can avoid these pitfalls and ensure your contracts are both fair and legally enforceable.

The Importance of Regular Reviews

Employment laws evolve — and so should your contracts. Businesses in Melbourne should review employment agreements regularly, especially after:

  • Legislative changes (e.g., updates to the Fair Work Act or NES)
  • Award or wage adjustments
  • Organisational restructuring or role changes
  • Introduction of new workplace policies

At Henty Lawyers, we offer periodic contract reviews to help businesses remain compliant and proactive.

Tailored Contracts for Different Roles

No two workplaces are the same. A generic contract may not address the specific risks or needs of your business. Our employment lawyers can draft tailored agreements for:

  • Executives and senior management
  • Contractors and consultants
  • Apprentices and trainees
  • Fixed-term or project-based staff
  • Part-time or flexible work arrangements

Each contract is crafted to meet your operational goals while remaining compliant with current employment law.

How Henty Lawyers Can Help

At Henty Lawyers, our Employment and Workplace Lawyers in Melbourne provide practical legal support to protect your business and promote fair, transparent employment relationships. We can assist with:

  • Drafting and reviewing employment contracts
  • Updating agreements to comply with legislative changes
  • Advising on employment disputes and termination
  • Managing workplace investigations
  • Implementing clear workplace policies and procedures

Our goal is to help your business stay compliant while reducing the risk of costly disputes.

Final Thoughts

Every Melbourne business — from small start-ups to large corporations — benefits from having robust employment contracts in place. They provide clarity, legal protection, and peace of mind for both employers and employees.

By partnering with Henty Lawyers, you can ensure your employment agreements are compliant, fair, and tailored to your specific business needs.

If you’re a Melbourne employer seeking to review or update your employment contracts, contact Henty Lawyers today for professional legal advice and support.