Why It’s Important to Have an Employment Contract

Charlotte Miller

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When you are looking for a new job, one of the things that comes up is the employment contract. These contracts can be confusing and may seem like they’re only in place to protect the employer. 

The truth is, an employment contract works for both the employer and the employee. Yes, this written agreement is created in support of both parties. It’s a way for them to establish their roles in the company from day one.

To create or better understand an employment contract, it would be good to consult experienced employment lawyers Sydney. This document can include a variety of information, such as:

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Compensation and benefits

Compensation and benefits are often outlined in an employment contract. This can include your hourly wage, when you will be paid (for example, biweekly or monthly) and whether or not you are eligible for overtime pay. If there are any changes to these things that either the employer or employee wants to make, they can do so by amending the contract rather than having to renegotiate terms every time something comes up.

An employment contract may also state that the employee is eligible for bonuses based on certain criteria, such as meeting production goals or staying with the company for a certain length of time.

Termination and separation

If you have an employment lawyer look over the contract beforehand, they can also help ensure it conforms with all labor laws where you live. Let’s talk about termination, for instance. Having a written employment contract prevents issues from happening because it establishes when termination would occur, for what reasons, and how much notice the employee must be given.

If the employer fires the employee without proper notice, the contract might state that the employee is entitled to a certain amount of severance pay. Here, the contract can help protect both parties from unfair treatment or unsafe work environments that they don’t want to remain in any longer than necessary.

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Agreement not to compete

An employer and employee may agree that the latter won’t work for a competing business for a period of time after leaving their job. It may also be helpful in instances where the employee has learned the ins and outs of the business so much that they can set up a similar business. Employers can opt to include this in the contract to limit their competition.


The employment contract may include agreement on confidentiality. For example, the employee may need to agree not to disclose any confidential or proprietary information about the company, such as trade secrets, client lists, or product formulas.

These are just some of the reasons why an employment contract is essential. Ultimately, it can help prevent legal disputes and give you peace of mind, whether you are an employer or an employee. 

If you are looking to create an employment contract, update one that’s already in place or want an employment lawyer to look over the contract you’ve been given, contact our team of experts today!