Hot topics
What contract should I use...
In today’s business world we deal with various persons internal and external to
the business and having your agreement in writing will protect you. However one
size DOES NOT fit all........
How often do you hear of someone getting into trouble as they didn’t have anything in writing or worse still they have a contract which is out of date or costing them money.
Here is an overview of various contracts that you may need to consider in your daily business:
Employment Contracts:
These contracts govern the employment relationship between the employee and the employer.
The employment contract protects the employer as it clearly outlines relevant legislation and how the relationship is determined. Without a contract the employer may face fines and prosecution.
Fixed Term Employment Contract:
These are used where there is requirements for the employer to have a person undertake a role or tasks for a specific period of time, such as a season or set period. With a fixed term contract there is agreement that employment will come to an end on a particular date. The employee will not usually be able to claim unfair dismissal when their employment ends, however they will have access to unfair dismissal laws if they are terminated prior to the completion date of the term, season or task or they had a reasonable expectation that the contract would be renewed.
With fixed term contracts there are strict criteria that must be followed to be exempt from certain Fair Work Act entitlements. You may however still be exposed to liability for breach of contract.
Consultants or Contractors contracts:
It is important that business has a solid contract when hiring consultants or contractors as without a written contract, you may have no recourse, no matter what has occurred. A contract specifies exactly what the consultant does, what the business must provide and outlines all things related to the consultancy work.
‘Sham’ contracting is an issue therefore it is vital that the consultancy is legitimate.
Labour Hire Contracts:
This is a form of indirect employment in which an agency supplies the employee to work at the employer’s workplace, in return for a fee. It is important that you have a contract with the labour hire company outlining responsibility for the financial and administrative tasks.
There are four main risks that you need to manage:
1. OHS legislation means that the employer is responsible for maintaining the health and safety of all people in the workplace whether they are directly employed or not.
2. Workers compensation is generally the responsibility of the labour hire company however most states have the power to recover workers compensation costs from the business.
3. Industrial law still applies when looking at remuneration of outsourcing workers or retrenching employees as they still have the right of action under the Fair Work Act.
4. Industrial relations issues may arise as employees need to be treated in a manner that is consistent with employment and operational requirements of the company.
Service Contracts / Agreements:
Services contracts / agreements are important for any professional trading and business relationships. Without contracts with clearly defined and agreed terms, misunderstandings can develop and various problems, notably litigation, can occur.
Contracts set out clearly the agreement and understanding between the supplier and client, and have extra value when you are managing supply on behalf of an employer or company.
Note:
This information is a guideline only and should not be used as the sole document to determine the appropriate contract for your needs.
The Centre for Tasmanian Industry customises contracts to suit business needs therefore without specific discussion we cannot formally determine which contract is best for your business.
Regards
Dixie Emmerton
Managing Director
