Employers should give every new employee a clear employment contract before work starts. The contract should identify the role, employment type, pay, hours, leave, notice, applicable award or agreement, and the policies and obligations that apply at work. It must not provide terms below the National Employment Standards (NES), a modern award or an enterprise agreement.

This guide explains what an employment contract must include in Australia, what employers should check before issuing it, and which clauses create avoidable risk. For a practical starting point, compare your document against the free employment documents for employers and the more detailed employment agreement templates available from Fair Work Centre.

What must an employment contract include in Australia?

An employment contract should include the essential terms that define the employment relationship and explain how the employee will be paid and managed. The core checklist is: employer and employee details, job title and duties, employment type, start date, pay, hours, leave, superannuation, award or agreement coverage, notice, termination rules, and key workplace policies.

1. Identify the employer, employee and job

Start with the legal names of the parties, the employee’s residential address if required for administration, the job title and the primary workplace. Include who the employee reports to and a concise description of the role. A broad duties clause can allow reasonable changes as the business develops, but it should not be used to disguise a major change in occupation, pay or responsibility.

State whether the employee may work at other locations, travel, work remotely or be transferred. If the position involves handling money, client information, vehicles, children, patients or regulated work, identify any licences, checks or qualifications that must be maintained.

2. State the employment type and start date

The contract should clearly state whether the employee is full-time, part-time, casual or fixed-term. For full-time employment, identify the ordinary weekly hours. For part-time employment, specify the agreed pattern or guaranteed hours and explain how additional hours are offered and approved. For casual employment, explain that the employee has no firm advance commitment to ongoing and indefinite work, where that reflects the real arrangement, and identify the applicable casual loading or rate.

Include the start date and, where relevant, the end date and reason for a fixed-term arrangement. Employers should provide any required information statement, such as the Casual Employment Information Statement or Fixed-Term Contract Information Statement, at the correct time. A label in the contract cannot fix an arrangement that operates differently in practice.

3. Set out pay, allowances and superannuation

State the employee’s base hourly rate or annual salary, the pay frequency and the normal pay day. Identify whether the rate is inclusive of a specific award entitlement, such as a loading or allowance, and include a set-off clause only where it is drafted carefully and the employer actually reconciles payments against each entitlement.

List recurring allowances, incentive payments, commissions or bonuses and explain whether they are guaranteed, discretionary, reviewable or subject to written conditions. Do not describe an amount as “all-inclusive” without checking that the arrangement covers every applicable minimum entitlement for the hours and work performed.

Explain how superannuation will be paid and nominate the fund process where appropriate. Payroll should separately check current minimum rates, award classifications, penalty rates, overtime and deductions rather than relying on the contract alone.

4. Explain hours, rosters, location and overtime

Include ordinary hours of work, the usual days or span of hours, roster arrangements, meal breaks and the process for approving overtime. If the role includes reasonable additional hours, the clause should still be read with the NES and any applicable award limits. Employers should not assume a salary automatically absorbs overtime, weekend penalties or public holiday entitlements.

Describe how rosters are issued and changed, who may approve extra work, and how employees record hours. The contract should also identify the primary work location and any reasonable travel or remote-work expectations. These details reduce disputes about whether work was authorised and whether the employee should be paid for it.

5. Include leave and other minimum entitlements

A contract should refer to the NES and the applicable modern award or enterprise agreement rather than trying to replace them with a short generic sentence. Cover annual leave, personal and carer’s leave, compassionate leave, family and domestic violence leave, community service leave, public holidays, parental leave and any other entitlement relevant to the role.

For award-covered employees, identify the award and classification if known. The Fair Work Ombudsman’s employment contracts guidance confirms that contracts cannot provide less than minimum legal entitlements. Employers should also check the Fair Work Act 2009 and the relevant award before finalising a template.

6. Add probation, performance and conduct terms

A probation clause should state the proposed period, review process and that employment can still only end lawfully. Probation does not remove minimum entitlements or prevent an employee from making a general protections claim. Link the contract to reasonable performance, conduct, attendance and compliance expectations, then identify the policies employees must follow.

Policies should be described as workplace directions that may be updated, while contractual promises should be limited to terms the business intends to make binding. Include confidentiality, privacy, intellectual property, conflicts of interest, acceptable technology use, health and safety, and any post-employment obligations that are genuinely necessary and enforceable.

7. Deal with notice and termination carefully

State the notice period or explain how it is determined under the NES, award or agreement. Explain whether the employer may make a payment in lieu of notice and what happens to accrued entitlements when employment ends. Serious misconduct should be addressed by reference to a fair process and the law; a contract should not promise automatic dismissal without considering the facts.

Include a process for returning property, protecting confidential information and completing handover obligations. Avoid clauses that allow the employer to end employment “at any time” without notice or entitlements. For higher-risk roles, obtain advice before using restraint, garden leave, deduction or repayment clauses.

8. Common employment contract mistakes for employers

• Using one template for full-time, part-time, casual and fixed-term staff.
• Leaving the award, classification or pay rate blank and assuming payroll will correct it later.
• Calling a worker a contractor without testing whether the relationship is genuinely contracting.
• Including a salary set-off clause without tracking hours, overtime, penalties and allowances.
• Promising a fixed number of hours while describing the employee as casual.
• Making policies contractual by accident, then changing them without considering consent.
• Using a restraint or deduction clause that is wider than the business can justify.

Before issuing a contract, identify the applicable award or agreement, calculate the minimum rate, confirm the employment type, check the work pattern, and have the employee sign or acknowledge the document. Keep the signed version with payroll and personnel records, and issue updated terms when a material change is agreed.

How to review an employment contract before sending it

1. Classify the role: confirm employment type, award coverage and classification.
2. Check the numbers: test base pay, loadings, allowances, overtime, superannuation and leave against current minimums.
3. Check the work pattern: compare the written hours and roster provisions with what the manager actually expects.
4. Check the risk clauses: review confidentiality, intellectual property, deductions, restraints and termination terms.
5. Explain the document: give the employee reasonable time to read it and answer questions before work begins.

For employers managing several roles, a controlled template library is safer than copying an old agreement. Fair Work Centre’s employment contracts guidance can help businesses organise the review, while its general employment documents hub covers related HR paperwork.

Frequently asked employer questions

Does an employment contract have to be in writing?
Not every employment contract must be written to exist, but a written agreement is strongly recommended. It gives both sides a clear record of pay, hours, duties and other terms, and helps the employer prove what was agreed.

Can an employer use the same contract for every employee?
Employers can use a controlled template, but the completed contract must reflect the employee’s real employment type, award coverage, classification, hours, pay and duties. A single generic template often creates casual, overtime and classification risks.

Can an employment contract provide less than the NES?
No. A contractual term that undercuts the NES, an applicable award or an enterprise agreement does not remove the minimum entitlement. The employer may still face back-pay, penalty and dispute risk.

Should the applicable modern award be named?
Yes, where the role is award-covered, the contract should identify the likely award and classification or otherwise explain how pay and conditions are determined. Payroll should verify the classification before the employee starts.

Can an employer change an employment contract later?
Usually, a material contractual change should be discussed and agreed rather than imposed. An employer should check whether the change affects pay, hours, duties, award compliance, consultation obligations or the risk of adverse action.

Is a probation clause the same as a right to dismiss without process?
No. Probation allows an employer to assess suitability, but minimum entitlements and general protections still apply. Employers should make a reasoned decision, follow a fair process and document the relevant performance or conduct issues.

What should an employer do if a signed contract is missing a term?
Do not silently insert a new term. Review the applicable law, award, workplace practice and prior communications, then document any agreed clarification or variation. Get employment-law advice where the missing term affects pay, hours, classification or termination.

Where can employers get a contract template?
Employers can start with Fair Work Centre’s free employment documents, then adapt the document to the role and check it against the current NES, award and business arrangements.