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As the size of your workforce increases, it is essential to ensure that your employees are all hired on terms that reflect the role they will perform. There are several employment arrangements for workers in Australia, including permanent, fixed-term and casual. Nevertheless, the conditions and entitlements your employee will accrue depend on the type of employment. Hence, you must ensure that you have correctly identified your relationship with your employees. This article discusses what an employment agreement an employer needs at the enterprise level.
As an employer, understand your essential employment obligations with this free LegalVision factsheet.
Protecting Your Enterprise
While it is critical to ensure that you afford your staff entitlements above the minimum requirements, it is also vital that you protect your business if an employee decides to seek employment elsewhere.
Throughout their employment, your staff will likely deal with information valuable to your enterprise. This information could be the systems you have to provide a particular service, your clients or other confidential information.
Your staff may also aid in creating these procedures or other forms of intellectual property. Therefore, you must take the opportunity to protect your enterprise by including the following provisions in an employment agreement.
1. Confidentiality Clause
If your staff deal with sensitive information you would like to keep confidential, you should include a confidentiality clause in the employment agreement. Not all information will be confidential. Nevertheless, there must be some reason for keeping the information out of the public domain. Confidential information can include:
- business ideas;
- concepts; or
- plans.
2. Non-Compete or Restraint of Trade
Your staff will acquire valuable knowledge during their employment which may tempt them to find other work or start a company that will compete with your enterprise. Employees may even consider directly working with your clients.
Hence, a well-drafted employment agreement will include terms that restrict your staff from directly or indirectly:
- competing with your business; or
- poaching your clients, suppliers and employees.
You can base the restraint of trade on geography, time or both. The terms of the restraint must be considered reasonable given the nature of the job and the industry they’re employed in.
3. Creating Intellectual Property (IP)
While at work, some of your employees will generate content, contribute ideas or some other form of intellectual property that benefits your business. The type of intellectual property will vary depending on the employee’s role. For example, they may write content that is available on your website (like this article). Hence, you may want to ensure that this remains the property of your enterprise even once the employee has moved on.
An IP clause protects your investment in your staff and means you do not have to deal with the messy situation of enforcing your exclusive right to use the content. To protect your business’s IP, you must ensure that your employment contracts include a robust IP clause that assigns all rights and ownership to any IP the employee creates during their employment with you your business.
Key Takeaways
As an employer, you will have spent much time, money and effort recruiting the right staff to help grow your enterprise. However, you must ensure a poorly-drafted employment agreement does not risk your interests if an employee decides to move on.
If you have questions or would like assistance drafting an employment agreement, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Continue reading this article below the formFrequently Asked Questions
Although employees have obligations surrounding confidential information to their employers outside of an employment agreement, it is still vital that you include a robust confidentiality clause in your employment agreement. This confidentiality clause should identify what information is considered confidential and the obligations the employee has surrounding the confidential information. It must also state that such obligations last after the employee’s engagement ends with your business.
To stop your employees from poaching your clients, you must include a well-drafted restraint of trade clause in your employment agreement. A non-solicitation restraint clause restricts an employee from poaching any of your clients during and after their employment with you. However, a restraint clause will only be enforceable where it is reasonably necessary to protect your business’s legitimate interests.
You must have your employment contracts drafted by a lawyer. Without a lawyer’s professional experience and expertise, an employment contract will likely not adequately protect your business.
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