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As an employer or employee, you owe various obligations to the other party. These duties are expressly contained in an employment contract and implied by:

  • law;
  • fact; and 
  • custom or practice.

A failure to understand or comply with your employment obligations can lead to serious consequences. This includes:

  • financial penalties; or
  • termination of your employment. 

This article explains the express and implied duties in an employment contract and includes some practical tips for you to consider.

Express Duties

A written employment contract contains the express duties that have been agreed between the employer and the employee. The employment contract may also incorporate written workplace policies and procedures implemented by the employer.

A written employment contract commonly addresses the following express duties of an employer:

  • paying employees for their hours worked and providing employees with the applicable entitlements;
  • making superannuation contributions on behalf of your employees; and
  • providing adequate notice when terminating your employee’s employment.

A written employment contract commonly addresses the following express duties of an employee:

  • devoting your whole time and attention during working hours to carry out your responsibilities;
  • acting diligently and to the best of your ability in performing your work;
  • using your best endeavours to promote and protect the interests and reputation of the business;
  • complying with all reasonable and lawful directions of your employer;
  • complying with all health and safety requirements specified by your employer;
  • using business property only to perform your work;
  • not engaging in any conduct which conflicts with the business; and
  • participating in any performance reviews reasonably required by your employer.

Express duties also come from the law, including (but not limited to):

  • workplace relation laws; and 
  • work health and safety laws.

The National Employment Standards and modern awards are established by workplace relation laws and outline duties and requirements for employers.

National Employment Standards (NES)

The NES sets out the minimum standards for employees and applies to all employees in Australia whether or not the employee has a written employment contract.

The minimum entitlements of the NES cover:

  • maximum weekly hours;
  • requests for flexible working arrangements;
  • parental leave and related entitlements;
  • annual leave;
  • personal/carer’s leave, compassionate leave and unpaid family and domestic violence leave;
  • community service leave;
  • long service leave;
  • public holidays;
  • notice of termination and redundancy pay; and
  • provision of a Fair Work Information Statement to all new employees.

Modern Awards

Modern awards are legal instruments which set out the minimum entitlements for employees across various industries and occupations. A modern award or employment contract cannot provide for conditions that are less than the NES.

Modern awards outline various entitlements, such as:

  • minimum rates of pay;
  • overtime rates;
  • penalty rates;
  • allowances;
  • rosters; and
  • breaks.

Implied Duties

Some duties can be implied into a contract of employment even though they are not expressly agreed between the employer and the employee. However, implied duties cannot be contrary to the express duties outlined in a written employment contract.

Duties Implied as a Matter of Fact

Employment duties can be implied into an employment contract if the terms are necessary for the reasonable or effective operation of the employment relationship.

Duties Implied as a Matter of Custom or Practice

Employment duties that are so well known and ingrained into an industry or practice can be implied into an employment contract by custom and practice.

Duties Implied by Law

Employment duties can be implied into an employment contract by the law.

The duties of an employer implied by law include:

  • providing a safe work environment for your employees;
  • paying employees for their work performed; and
  • reimbursing your employees for any reasonable and necessary expenses incurred on behalf of the business.

The duties of an employee implied by law include:

  • obeying and cooperating with your employer;
  • using care and skill in the performance of your functions; and
  • exhibiting fidelity and good faith to your employer.

The High Court of Australia found that the mutual obligation of trust and confidence is not a term implied into employment contracts by law.

Failure to Comply With Employment Duties

An employer’s breach of the NES may result in penalties of up to $12,600 for individuals and $63,000 for a corporation. Also, a failure to comply with employment duties can lead to claims by your employee of underpayment, unfair dismissal or workers compensation.

An employee’s failure to comply with employment obligations can lead to performance management or a suspension or termination of employment.

Practical Tips for Employers and Employees

If you are an employer, you should engage an employment lawyer to prepare or review your employment contract. You need to understand the duties in your written employment contract. Implied terms are uncertain and leave you unclear on your obligations and exposure. A clear and comprehensive written employment contract reduces the likelihood of terms being implied into your employment contract.

Further, you can seek guidance from Fair Work or an employment lawyer about the NES and modern awards. You should understand the minimum duties and entitlements set out in the NES and modern awards to minimise the risk of breaching your obligations.

Key Takeaways

Employers and employees have various express and implied duties under an employment contract and the law. You should understand your employment obligations and ensure that the agreed duties are clearly expressed in your written employment contract. If you have any questions about your employment duties or if you need help with preparing or reviewing your employment contract, contact LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.

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