Are you interested in starting up a business as a mechanic or simply looking to expand your existing mechanic business? If either is the case, you should consider using employment contracts if you have not done so already. Employment contracts are the foundation of the employment relationship between you and your employees and define how you run your business. Often the difference between a disgruntled employee and a happy and productive one is their employment contract. This is because a clear and concise employment contract will allow you and your employees to know where you stand, ensuring that your business runs smoothly and efficiently. Therefore, although creating employment contracts can be time-consuming, they are the foundation of any growing mechanic business. This article will explain key elements to include in your employment contracts.
Do I Have to Make a New Contract for Each Employee?
The answer to this question depends on the amount of time and resources you are willing to put into creating your employment contracts. Generally, you do not have to worry about making a new contract for each employee. Instead, you should create a separate agreement for each position within your business. This should clearly outline the roles and responsibilities of an employee in that position. It should also protect them from taking on more responsibility than you feel appropriate.
Creating employment contracts based on positions and not individuals is the quickest and most effective way to ensure efficiency within your business. This allows fluidity within your mechanic business. You might modify each contract to deal with the responsibilities of a specific role within your company. If an employee leaves for any reason, finding someone else is not difficult. This is because you have already spelt out the responsibilities and protections required of a person in that position in the employment contract.
How Will Employment Contracts Help My Business?
A clear, concise and detailed employment contract for each position within your mechanic business will help you attract the best person for the job. This is because each person who sees your contract’s clear and concise nature will understand how you run your business efficiently. Therefore, employment contracts act as a recruitment advertisement for your business, allowing you to hire the best people for the job.
New employees often struggle to fit into a new business’ structure and business model. As a result, they tend to be less productive at the beginning of their employment as they feel their way into a new workplace and a new job. However, you can significantly reduce this issue with an employment contract that spells out every duty required of a new employee throughout their employment. Consequently, employment contracts will help your business continue to run with the least amount of disruption possible.
Continue reading this article below the formCan I Write My Employment Contracts?
Although writing your own employment contracts is certainly possible, it can be a lengthy process for many business owners. In addition, you will need to be aware of an area of the law that is quite complex and continually changing. Therefore, it is often more cost and time efficient to gain the services of a lawyer who can assist you in creating employment contracts that work best for your business.
Additionally, having a lawyer draft your employment contracts will give you peace of mind because your business is protected from any unnecessary financial risk. It would also be beneficial to have a lawyer with intimate knowledge of your employment contracts in case you need to rely on them to protect your business.
As an employer, understand your essential employment obligations with this free LegalVision factsheet.
Key Terms in an Employment Contract
Although it would be wise to have an employment lawyer draft your employment contracts, it is nevertheless essential to familiarise yourself with some key terms in an employment contract.
Pay Terms
It is crucial that you set out your employee’s pay in an employment contract. Your employee’s rate of pay will depend on a range of factors, including what is in:
- a modern award, such as the Vehicle Repair, Services and Retail Award;
- the enterprise agreement (if there is one in place); and
- the national minimum wage.
If you are unsure what payment terms to include in your employment agreement, it would be wise to seek legal advice. This way, you can avoid underpaying your employees.
General Standards: Hours, Leave, Termination
An employment contract should also cover other general standards beyond your obligation to pay your employees. These standards include your employees’:
- expected hours of work;
- leave entitlements, including annual leave, parental leave, long service leave, personal leave and carer’s leave; and
- rules regarding termination and redundancy, such as minimum notice periods.
Since many of these standards are in modern awards, enterprise agreements and the National Employment Standards, it is essential that your employment contract does not remove or diminish any of your employee’s entitlements.
Restraint of Trade Clause
Some employment contracts may include a restraint of trade clause which can apply both during your employee’s employment and after their employment terminates. These clauses can prevent your employees from:
- working for a competitor or starting a competing business (a non-competition clause); and
- soliciting clients, employees, contractors or suppliers (a non-solicitation clause).
Generally, a restraint of trade clause will operate within a particular area and for a certain period. This is because restraint of trade clauses that are unreasonable or are not necessary to protect your business interests may be unenforceable.
Key Takeaways
Employment contracts help ensure your business runs smoothly, allowing you and your employees to know exactly where they stand at all times. In addition, employment contracts allow you to hire the best person for the job and act as an advertisement showing that your business runs like a well-oiled machine. However, drafting an employment contract can be difficult, so speaking with an employment lawyer may help you better understand what to include in your employment contracts.
If you need help drafting an employment contract, 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
The NES set out the minimum entitlements for your employees, where they are covered by the national workplace relations system. Your employment contract cannot reduce or remove any of its minimum entitlements.
A restraint of trade clause can prevent your employees from working for a competitor or starting a competing business (a non-competition clause) and from soliciting clients, employees, contractors or suppliers (a non-solicitation clause).
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