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Last Updated 21 August 2025

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What is an Employment Contract?

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An Employment Contract is an agreement between an employer and an employee that describes the terms and conditions of a job. It outlines the rights and responsibilities of both parties. 

Generally, an Employment Contract includes terms such as compensation, vacation time, work duties, and other essential aspects. Ultimately, it forms the foundation of a working relationship.

An Employment Contract can also be known as a:

  • Hiring contract
  • Work contract
  • Job contract

Who should use an Employment Contract?

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Anyone who manages employees, such as employers, managers, small business owners, and human resource professionals, should create an Employee Contract when hiring a new employee. The agreement helps both parties understand their roles and responsibilities. 

Employees without an Employment Contract can request one from their employer anytime.

Employees vs. independent contractors

Employers and managers must be aware that independent contractors and employees are different. While the workers can sometimes do similar work, they have different roles, rights, and obligations.

Key indicators of an independent contractor include:

  • Operating their own business as a sole trader or company
  • Managing their own tax responsibilities
  • Having control over how, when, and where they work
  • Being able to negotiate their own fees and working arrangements
  • Often working for multiple clients simultaneously

Independent contract workers should not use an Employment Contract. Instead, they can create an Independent Contractor Contract to outline terms and conditions between the contractor and the client.

Do I need to have an Employment Contract?

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While a written Employment Contract isn't strictly mandated by law in Australia, it's invaluable for ensuring clarity and preventing future disputes. Instead of relying on an informal, verbal agreement, a written contract provides crucial understanding for you and your employees.

A well-drafted and legally sound Employment Contract helps by:

  • Establishing crystal-clear expectations and responsibilities for everyone involved
  • Significantly reducing the likelihood of disagreements and misunderstandings later on
  • Providing legal protection for both the employer and the employee

According to the National Employment Standards (NES), employees are entitled to the legal minimums. An Employment Contract can't offer conditions below these minimums.

Some businesses have enterprise agreements. These function similarly to Employment Contracts but encompass a larger group of employees, such as one or multiple businesses or enterprises. Employees might also be covered by modern awards, which outline entitlements for entire industries.

If an employee is covered by an enterprise agreement or modern award, they can still have an Employment Contract to specify additional terms. However, these terms can’t limit what the worker is entitled to from their other contracts. 

Types of Employment Contracts

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There are multiple types of employees, all with different entitlements. As a result, their Employment Contract will contain different terms.

Full-time permanent

Full-time permanent employees work an average of 38 hours per week on an ongoing basis, often with set hours. Their employment doesn't have a defined end date, and employers must provide notice or pay in lieu of notice for termination.  

Full-time employees are entitled to paid leave, including annual, personal, parental, and compassionate leave. They must also get 10 days of family and domestic leave each year.

Part-time permanent

Employees hired on a part-time, permanent basis work fewer than 38 hours. They often get a set amount of regular hours every week. Like full-time permanent workers, their contracts do not have a set end date, and employers must give notice or payment to end their employment.

Part-time employees are entitled to paid leave, such as annual and personal leave. They also get 10 days of paid family and domestic violence leave.

Fixed term 

Fixed-term employees are temporary hires whose contracts are limited by time. They can be full-time or part-time. 

Often used for seasonal work or project-based roles, Australian law generally limits fixed-term contracts to a maximum of two years and restricts offering subsequent fixed-term contracts for the same role.

Casual employment

Casual employees often work sporadic and irregular hours, with no firm commitment from the employer about future work. The work is usually as needed, with employers offering hours and employees accepting shifts. 

Casual employees are often entitled to higher pay rates than non-casual workers. They should also receive 10 days of paid family and domestic violence leave. 

What should an Employment Contract include?

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When you create your Employment Contract with LawDepot's template, our questionnaire will guide you through all the steps and prompt you to fill in the relevant information.

Your Employment Contract should include details about the following:

  1. Employment type: Full-time permanent, part-time, fixed term, or casual
  2. Employment duration: For fixed-term contracts, if applicable
  3. Work location: Where the employee will primarily be based
  4. Employer details: Legal name and contact information of the employer
  5. Employee details: Full name and contact information of the employee
  6. Job title and description: A clear outline of the employee's role and responsibilities
  7. Probationary period: Length and terms of the initial probationary period, if applicable
  8. Compensation details: Wage or salary, payment frequency, and any applicable bonuses or allowances
  9. Work hours: Regular hours of work, including start and finish times and break arrangements
  10. Leave entitlements: Details about annual leave, personal/carer's leave, and other relevant leave
  11. Superannuation: Information about the employee's superannuation fund and contributions
  12. Restrictive covenants: Clauses like confidentiality, non-solicitation, or non-competition, if applicable
  13. Termination requirements: Notice periods and procedures for ending employment.

Some information won't be in the Employment Contract, but it is still vital. Australian employees must be provided with information about their entitlements.

After their employment begins, new workers should be given a Fair Work Information Statement (FWIS). The FWIS includes, but is not limited to, information on the National Employment Standards (NES), right to request flexible working arrangements, and the role of the Fair Work Ombudsman and the Fair Work Commission. 

Fixed-term employees should receive a copy of the Fixed Term Contract Information Statement (FTCIS), while casual employees receive a copy of the Casual Employment Information Statement (CEIS).

What are the laws for Employment Contracts in Australia?

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The Fair Work Act 2009 outlines requirements for employers and establishes national employment standards. Employers should be familiar with its contents and the rights and responsibilities of the employee, employer, and organisation.

Australia’s Fair Work Ombudsman offers guidance to employees and employers. Furthermore, employers can visit Business Australia for additional information on fulfiling their legal obligations.

Modifying, breaching, and terminating Employment Contracts

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Modifications

During employment, you might need to change an employee's contract. However, fundamental terms such as wages, work hours, or employment type cannot be altered without the employee's explicit consent. Furthermore, any changes must still comply with the minimum legal standards.

You'll need the employee's consent to formally amend an Employment Contract. Once an agreement has been made, you may use a Contract Addendum. This allows you to change an existing contract without creating a new document. The addendum must be signed by both parties and attached to the original contract.

Employee breaches

Common employee infractions include being late, failing to complete particular duties, and missing work without proper notice. An employee breach may result in:

  • The employer responds with a warning to attempt to improve employee behaviour
  • The employer issues an Employment Termination Letter to signal the end of the employment
  • The employer is enforcing immediate termination 

Employer breaches

Common employer infractions include unsafe workplace conditions, discrimination or harassment, wrongful termination, and lack of pay. This may result in: 

  • The Fair Work Ombudsman delivers an infringement notice or a compliance notice 
  • If the employer doesn’t comply, the Fair Work Ombudsman may take legal action
  • The action can result in fines, payment of outstanding entitlements, and even imprisonment 

Learn more about managing employee performance on Fair Work’s Small Business platform.

Terminations

Either party in an Employment Contract can end it. However, following the proper steps to avoid a contract breach is best practice. For example, an employee may be required to give their employer a Resignation Letter to officially terminate the contract. Providing sufficient notice is recommended, as it allows the employer to fill the position. 

When the employer ends the contract, they must give an Employment Termination Letter. Employees may be entitled to final pay for any outstanding wages, unused leave, or payment in lieu of notice. 

If both parties agree on ending the employer-employee relationship, they can sign a Termination Agreement. This records the end of the original contract and ensures both parties are released from their obligations. 

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Related Documents:

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Employment Contract Page of
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Page of

EMPLOYMENT CONTRACT

THIS EMPLOYMENT CONTRACT (this "Agreement") dated this ________ day of ________________, ________

BETWEEN:

____________________________________________ of ____________________________________________
(the "Employer")

OF THE FIRST PART

- AND -

____________________________________________ of ____________________________________________
(the "Employee")

OF THE SECOND PART

BACKGROUND:

  1. The Employer is of the opinion that the Employee has the necessary qualifications, experience and abilities to assist and benefit the Employer in its business.
  2. The Employer desires to employ the Employee and the Employee has agreed to accept and enter such employment upon the terms and conditions set out in this Agreement.

IN CONSIDERATION OF the matters described above and of the mutual benefits and obligations set forth in this Agreement, the receipt and sufficiency of which consideration is hereby acknowledged, the parties to this Agreement agree as follows:

  1. Commencement Date and Term
  2. The Employee will commence permanent full-time employment with the Employer on the 10th day of May, 2026 (the "Commencement Date").
  3. Job Title and Description
  4. The initial job title of the Employee will be the following: ____________________ The initial job duties the Employee will be expected to perform will be the following:
    ____________________________________________________________
  5. The Employee agrees to be employed on the terms and conditions set out in this Agreement. The Employee agrees to be subject to the general supervision of and act pursuant to the orders, advice and direction of the Employer.
  6. The Employee will perform any and all duties as requested by the Employer that are reasonable and that are customarily performed by a person holding a similar position in the industry or business of the Employer.
  7. The Employer may make changes to the job title or duties of the Employee where the changes would be considered reasonable for a similar position in the industry or business of the Employer. The Employee's job title or duties may be changed by agreement and with the approval of both the Employee and the Employer or after a notice period required under law.
  8. The Employee agrees to abide by the Employer's rules, regulations, policies and practices, including those concerning work schedules, vacation and sick leave, as they may from time to time be adopted or modified.
  9. Employee Compensation
  10. Compensation paid to the Employee for the services rendered by the Employee as required by this Agreement (the "Compensation") will include an hourly wage at the rate of $__________.
  11. This Compensation will be payable twice per month while this Agreement is in force. The Employer is entitled to deduct from the Employee's Compensation, or from any other compensation in whatever form, any applicable deductions and remittances as required by law.
  12. The Employee understands and agrees that any additional remuneration paid to the Employee in the form of bonuses or other similar incentive remuneration will rest in the sole discretion of the Employer and that the Employee will not earn or accrue any right to incentive remuneration by reason of the Employee's employment.
  13. The Employer will reimburse the Employee for all reasonable expenses, in accordance with the Employer's lawful policies as in effect from time to time, including but not limited to, any travel and entertainment expenses incurred by the Employee in connection with the business of the Employer. Expenses will be paid within a reasonable time after submission of acceptable supporting documentation.
  14. Superannuation
  15. If the Employee qualifies under the relevant legislation or under an award, the Employer will pay an amount as required by legislation or any relevant award into a complying superannuation fund or retirement savings account. The Employer will make such contributions at least once every quarter and will provide the Employee with written details of such contributions at least once every quarter.
  16. Place of Work
  17. The Employee's primary place of work will be at the following location:
    • ____________________________________________________________
  18. Time of Work
  19. The Employee's normal hours of work, including breaks, ("Normal Hours of Work") are as follows: ______________________________
  20. However, the Employee will, on receiving reasonable notice from the Employer, work additional hours and/or hours outside of the Employee's Normal Hours of Work as deemed necessary by the Employer to meet the business needs of the Employer.
  21. Employee Benefits
  22. The Employee will be entitled to only those additional benefits that are currently available as described in the lawful provisions of the Employer's employment booklets, manuals, and policy documents or as required by law.
  23. Employer discretionary benefits are subject to change, without compensation, upon the Employer providing the Employee with 60 days written notice of that change and providing that any change to those benefits is taken generally with respect to other employees and does not single out the Employee.
  24. Vacation
  25. The Employee will be entitled to two weeks of paid vacation each year during the term of this Agreement, or the amount of paid vacation as entitled by law, whichever is greater.
  26. The times and dates for any vacation will be determined by mutual agreement between the Employer and the Employee.
  27. Upon termination of employment, the Employer will compensate the Employee for any accrued but unused vacation.
  28. Other Leave and Minimum Conditions of Employment
  29. The Employee is entitled to long service leave, sick leave, bereavement leave, parental leave and paid public holidays in accordance with relevant legislation and awards in effect during the Employee's employment.
  30. Duty to Devote Full Time
  31. The Employee agrees to devote full-time efforts, as an employee of the Employer, to the employment duties and obligations as described in this Agreement.
  32. Conflict of Interest
  33. During the term of the Employee's active employment with the Employer, it is understood and agreed that any business opportunity relating to or similar to the Employer's actual or reasonably anticipated business opportunities (with the exception of personal investments in less than 5% of the equity of a business, investments in established family businesses, real estate, or investments in stocks and bonds traded on public stock exchanges) coming to the attention of the Employee, is an opportunity belonging to the Employer. Therefore, the Employee will advise the Employer of the opportunity and cannot pursue the opportunity, directly or indirectly, without the written consent of the Employer.
  34. During the term of the Employee's active employment with the Employer, the Employee will not, directly or indirectly, engage or participate in any other business activities that the Employer, in its reasonable discretion, determines to be in conflict with the best interests of the Employer without the written consent of the Employer.
  35. Contract Binding Authority
  36. Notwithstanding any other term or condition expressed or implied in this Agreement to the contrary, the Employee will not have the authority to enter into any contracts or commitments for or on the behalf of the Employer without first obtaining the express written consent of the Employer.
  37. Termination Due to Discontinuance of Business
  38. Notwithstanding any other term or condition expressed or implied in this Agreement, in the event that the Employer will discontinue operating its business at the location where the Employee is employed, then, at the Employer's sole option, and as permitted by law, this Agreement will terminate as of the last day of the month in which the Employer ceases operations at such location with the same force and effect as if such last day of the month were originally set as the Termination Date of this Agreement.
  39. Termination of Employment
  40. Where there is just cause for termination, the Employer may terminate the Employee's employment without notice, as permitted by law.
  41. The Employee and the Employer agree that reasonable and sufficient notice of termination of employment by the Employer is the greater of one (1) week or any minimum notice required by law.
  42. If the Employee wishes to terminate this employment with the Employer, the Employee will provide the Employer with the greater of one (1) week and the minimum required by law. As an alternative, if the Employee co-operates with the training and development of a replacement, then sufficient notice is given if it is sufficient notice to allow the Employer to find and train the replacement.
  43. The Termination Date specified by either the Employee or the Employer may expire on any day of the month and upon the Termination Date the Employer will forthwith pay to the Employee any outstanding portion of the compensation including any accrued vacation and banked time, if any, calculated to the Termination Date.
  44. Once notice has been given by either party for any reason, the Employee and the Employer agree to execute their duties and obligations under this Agreement diligently and in good faith through to the end of the notice period. The Employer may not make any changes to compensation or any other term or condition of this Agreement between the time termination notice is given through to the end of the notice period.
  45. Remedies
  46. In the event of a breach or threatened breach by the Employee of any of the provisions of this Agreement, the Employee agrees that the Employer is entitled to a permanent injunction, in addition to and not in limitation of any other rights and remedies available to the Employer at law or in equity, in order to prevent or restrain any such breach by the Employee or by the Employee's partners, agents, representatives, servants, employees, and/or any and all persons directly or indirectly acting for or with the Employee.
  47. Severability
  48. The Employer and the Employee acknowledge that this Agreement is reasonable, valid and enforceable. However, if any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be changed in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Agreement will in no way be affected, impaired or invalidated as a result.
  49. Notices
  50. Any notices, deliveries, requests, demands or other communications required here will be deemed to be completed when hand-delivered, delivered by agent, or seven (7) days after being placed in the post, postage prepaid, to the parties at the following addresses or as the parties may later designate in writing:
    • Employer:

      Name:

      ____________________________________________

      Address:

      ____________________________________________

      Fax:

      ____________________________________________

      Email:

      ____________________________________________

    • Employee:

      Name:

      ____________________________________________

      Address:

      ____________________________________________

      Fax:

      ____________________________________________

      Email:

      ____________________________________________

  51. Modification of Agreement
  52. Any amendment or modification of this Agreement or additional obligation assumed by either party in connection with this Agreement will only be binding if evidenced in writing signed by each party or an authorised representative of each party.
  53. Governing Law
  54. This Agreement will be construed in accordance with and governed by the laws of the state of .
  55. Definitions
  56. For the purpose of this Agreement the following definitions will apply:
    1. 'Termination Date' means the date specified in this Agreement or in a subsequent notice by either the Employee or the Employer to be the last day of employment under this Agreement. The parties acknowledge that various provisions of this Agreement will survive the Termination Date.
  57. General Provisions
  58. Time is of the essence in this Agreement.
  59. Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.
  60. No failure or delay by either party to this Agreement in exercising any power, right or privilege provided in this Agreement will operate as a waiver, nor will any single or partial exercise of such rights, powers or privileges preclude any further exercise of them or the exercise of any other right, power or privilege provided in this Agreement.
  61. This Agreement will inure to the benefit of and be binding upon the respective heirs, executors, administrators, successors and assigns, as the case may be, of the Employer and the Employee.
  62. This Agreement may be executed in counterparts. Facsimile signatures are binding and are considered to be original signatures.
  63. If, at the time of execution of this Agreement, there is a pre-existing employment agreement still in effect between the parties to this Agreement, then in consideration of and as a condition of the parties entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, this Agreement will supersede any and all pre-existing employment agreements between the Employer and the Employee. Any duties, obligations and liabilities still in effect from any pre-existing employment agreement are void and no longer enforceable after execution of this Agreement.
  64. This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or written. The parties to this Agreement stipulate that neither of them has made any representations with respect to the subject matter of this Agreement except such representations as are specifically set forth in this Agreement.

IN WITNESS WHEREOF, the parties have duly affixed their signatures under hand and seal on this ________ day of ________________, ________.

EMPLOYER:

______________________________
____________________________________________



EMPLOYEE:

______________________________
____________________________________________

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