A good employment agreement sets out the type of employment, start date and probation, pay and super, hours and location, the applicable award, leave, duties, confidentiality, intellectual property, any restraints, and how the employment can end. The rules have also changed a lot since 2021. There are now limits on fixed-term contracts, a new definition of casual employment, a right to disconnect and a ban on pay secrecy clauses, and from 1 July 2026, super must be paid with wages. If your agreements were written before these changes, it's time to review them.
You're ready to grow your team. Congratulations. This is a huge milestone, and it's exciting. It can also be a time of uncertainty. Working out how to do all the right things as a new employer can feel overwhelming, but it doesn't have to be.
The Fair Work Ombudsman is a good starting point for understanding your obligations as an employer. But knowing your legal obligations is one thing. Knowing what to include in your employment agreements, to protect both you and your team, is another.
First, check they're an employee, not a contractor
Before you draft anything, make sure your new team member really is an employee. Since August 2024, the test looks at the real substance of the working relationship, not just what the contract calls it. My legal checklist for engaging independent contractors walks you through it.
What should an employment agreement include?
Here's my list of the must-haves:
Type of employment, start date and probation. State whether the role is full-time, part-time, casual or fixed-term, the start date, and whether a probation period applies. Keep in mind that a probation period doesn't change the unfair dismissal rules.
Pay and super. Set out the salary or hourly rate, whether it's pro rata, and whether it's inclusive or exclusive of superannuation. For casual employees, set out the hourly rate and the casual loading. Include how often you'll pay. Super is now 12%, and from 1 July 2026 it must be paid with wages, reaching your employee's fund within 7 days of payday.
Hours, location and working from home. Set out ordinary hours, where the employee will work (including any other business locations), and any working from home arrangements and expectations.
The applicable award. If an award covers the role, name it and the classification. It gives you both a clear reference point for checking entitlements. If you pay an annual salary above the award, include a clause that sets it off against award entitlements, and check whether the award requires you to keep records or do a yearly reconciliation.
Leave. The National Employment Standards set the minimums, including annual leave, personal/carer's leave, compassionate leave, 10 days of paid family and domestic violence leave, and parental leave. It's best practice to set out what applies, and whether it accrues pro rata for part-time employees, so there's no confusion later.
Duties and responsibilities. A clear list of duties makes expectations clear from day one. It can go in the body of the agreement or in a schedule.
Technology, social media and contact outside work hours. Set out obligations around passwords, security, systems and social media, including whether employees can say they represent your business when they post. Employees now have a right to disconnect: they can refuse to monitor or respond to contact outside their working hours unless refusing is unreasonable. If the role genuinely needs some out-of-hours contact, say so in the agreement and make sure the pay reflects it.
Confidentiality. If your client details, projects, methods or know-how are important to your business, set out the employee's confidentiality obligations, and make clear they continue after the employment ends.
Intellectual property. Generally, you'll own work an employee creates as part of their job, but don't rely on the default. Spell out that you own the IP, including work created outside hours or on their own devices where it relates to the business, and deal with moral rights. If it isn't addressed, you can end up in a dispute after an employee moves on.
Restraints and non-solicitation. If you want to stop a former employee approaching your clients or team, or working for a competitor, this needs to be very carefully drafted. A restraint that's too broad is unreasonable and won't be enforced. The Government has also proposed banning non-compete clauses for employees earning below the high-income threshold, and released draft laws in September 2026 for consultation. Nothing has passed yet, but watch this space and review your restraints when it does.
Ending the employment. Set out notice periods (at least the minimums in the National Employment Standards), what counts as serious misconduct, and the return of property and confidential information. Read more in What's unfair dismissal?
Review and update. In my experience, this is the one most often overlooked. Many employers treat employment agreements as "set and forget": once they're signed, they go into the bottom drawer, never to be looked at again. Don't be that employer. I recommend reviewing your employment agreements every year. If the role, pay or working arrangements change, record the change in writing, either by a written record between you (an email can work) or a new agreement.
Alongside the agreement, you must give every new employee the Fair Work Information Statement. Casual employees also get the Casual Employment Information Statement, and fixed-term employees the Fixed Term Contract Information Statement.
What's changed since 2021?
If your employment agreements are more than a couple of years old, these changes are likely to affect them:
Pay secrecy (December 2022): employees can discuss their pay, and pay secrecy clauses can't be enforced or included in new agreements.
Flexible work requests (June 2023): you must genuinely consider a request, respond in writing within 21 days, and give reasons if you refuse. Disputes can go to the Fair Work Commission.
Fixed-term contracts (December 2023): generally, a fixed-term contract can't run for more than 2 years (including extensions), or be renewed more than once, unless an exception applies.
Casual employees (August 2024): a new definition based on the real working relationship, and a new "employee choice" pathway for eligible casuals to change to permanent employment.
Right to disconnect (August 2024, and August 2025 for small business): employees can refuse unreasonable contact outside their working hours.
Wage theft (January 2025): intentionally underpaying employees is now a criminal offence. Clear pay terms and the right award matter more than ever.
Payday super (1 July 2026): super must be paid with wages, not quarterly.
Proposed non-compete ban: a ban for employees below the high-income threshold is planned, but not yet law.
Getting your employment agreements right from the start protects your business, and it shows your team you value them. If your agreements were written before these changes, or you're about to hire, book an introduction call and let's make sure they're up to date.
This article provides general information only and does not constitute legal advice. Your obligations depend on your specific circumstances, including any award or enterprise agreement that applies.
Frequently asked questions
Do I need a written employment agreement?
The law doesn't always require one, but you must give every new employee the Fair Work Information Statement, and many awards require part-time hours to be agreed in writing. A written agreement is the best way to set clear expectations and protect your business if there's a dispute.
What is the right to disconnect?
Employees can refuse to monitor, read or respond to contact from their employer outside their working hours, unless refusing is unreasonable. It has applied to small businesses with fewer than 15 employees since August 2025.
How long can a fixed-term employment contract be?
Generally, no more than 2 years including extensions, and it can't be renewed more than once, unless an exception applies. You must also give the employee the Fixed Term Contract Information Statement.
Can I stop an employee working for a competitor after they leave?
Only with a restraint that's reasonable to protect your business, and it must be carefully drafted to be enforceable. The Government has also proposed banning non-compete clauses for employees earning below the high-income threshold, so check the current position before relying on one.
How often should I review my employment agreements?
At least once a year, and whenever an employee's role, pay or working arrangements change, or the law changes. Record any changes in writing.
