What Should A Builder Include in Their Employment Contracts?

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Table of Contents

• What Do You Expect From Your Employees as a Builder?
• What Are Your Employees’ Pay Rates? 
• What Are Your Employees’ Probation and Notice Periods?
• Work Health and Safety Requirements For a Builder
• Confidentiality and Intellectual Property
• What About Restraint Clauses?
• Key Takeaways 
• Frequently Asked Questions

Running a business as a builder can come with many challenges, including the costs and availability of materials, labour costs and development sites. It is, therefore, essential that you understand what to include in your employment contracts so you can focus on the job at hand. This article outlines some critical information you should include in your employment contracts. 

What Do You Expect From Your Employees as a Builder?

The first step is to consider what you expect from your employees since this will influence:

• the work hours you may need them to complete; and 
• their employment status, such as a permanent or casual employee. 

You must clearly identify your employee’s status since this determines their employee entitlements. No matter what you decide, you must ensure that your employment or training contract clarifies what type of employee you are hiring and provides their relevant entitlements.

Casually Employed Builder

Casual employment is a flexible arrangement where you do not guarantee ongoing work with the business. Instead, you notify a casual employee when shifts are available. Accordingly, the employee can decide whether to accept or refuse the shift. Therefore, hiring a casual employee may be suited to your business if you cannot provide employees with a commitment to ongoing work with an agreed pattern of work.

Permanently Employed Builder

Permanent employment, including part-time and full-time workers, generally involves set work hours each week with a commitment to ongoing work. A full-time employee usually works 38 hours per week, and part-time employees work less than 38 hours weekly. Hence, if your business requires employees to be available for set shifts, and you can guarantee these shifts for employees each week, you may wish to employ a permanent employee.

It is important to remember that the law entitles permanent employees to:

• paid annual or personal leave; and
• an extended notice of termination period.

Apprenticeships 

As a builder, you may also consider employing an apprentice under a training contract. The law considers apprentices as employees. However, while employed with you, apprentices will also study for a trade or professional qualification. Generally, an apprenticeship can last between one to four years. 

What Are Your Employees’ Pay Rates? 

Every employee is entitled to the national minimum wage. However, if an award or enterprise agreement covers them, they may have additional pay entitlements. 

The same goes for any apprentices. Notably, any time an apprentice spends at trade school completing training will be considered ordinary hours of work, which you must pay at the correct rate. 

What Are Your Employees’ Probation and Notice Periods?

A probation period allows you to assess an employee’s performance and consider whether you would like to continue to employ them. During the probation period, you can terminate the employee’s employment with a reduced notice period. 

You should also consider how much notice you or your employee must provide should they want to leave your business. Including notice periods in the employment contract can:

• avoid any possible dispute; and 
• allow enough time for a suitable handover. 

The law also entitles employees to minimum notice periods, which increase incrementally based on their continuous years of service. 

Work Health and Safety Requirements For a Builder

Your employment contract should require your employees to comply with your workplace policies, including your workplace health and safety policies and procedures.

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Confidentiality and Intellectual Property

As a builder, you must protect information such as client lists, building designs or processes. Hence, your employment contract can include robust protections surrounding your business’s confidential information and intellectual property. This generally involves drafted clauses which make it clear that an employee must:

• comply with all of their confidentiality obligations, such as not disclosing client lists or information;
• assign any ownership of the relevant intellectual property to your business.

What About Restraint Clauses?

Restraint clauses can protect your business during and after an employee leaves your business. There are two different types of restraint clauses, including:

• non-compete clauses that will prevent your employees from working with competitive businesses during and following their employment with you; and 
• non-solicitation clauses that will prevent your employees from soliciting your clients, employees or suppliers following their employment. 

Nevertheless, a restraint clause will only be enforceable where it is reasonably necessary to protect legitimate business interests. Hence, while restraint clauses can deter your employees from engaging in such behaviours, their enforceability will depend on numerous factors. 

Key Takeaways 

When drafting an employment contract as a builder, it is essential to consider:

• what basis you are hiring workers; and
• their subsequent entitlements per the National Employment Standards, award or enterprise agreement.

If you need help drafting your employment contracts as a builder, our experienced employment lawyers can assist as part of our LegalVision membership. You will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on 1300 544 755 or visit our membership page.

Frequently Asked Questions