Are your employment contracts 3 to 5 years old? When was the last time you looked at these to see if they are up to date? Have your existing contracts for your employees been issued within the last 3-5 years? Chances are that they don’t properly reflect current laws and organisational practices.
Out of date employment contracts can potentially expose your organisation to a significant level of risk. Out of date contracts may present a risk when:
- The original contract has ceases to operate (for example when an employee has changed roles or organisations have changed hands);
- Clauses which would be beneficial to the organisation are not present (for example the ability to offset future superannuation increases against an employee’s salary);
- They are inconsistent with the award or the Fair Work Act / Industrial Relations Act (Qld) (Where contracts don’t properly reflect current legislative entitlements); and/or
- Unintended entitlements (for example bonuses or special leave arrangements that were agreed on commencement but have since been replaced with other schemes).
Some employers like to issue new contracts each year however CMSolutions supports a system whereby templates are reviewed every 12 months and existing contracts are replaced every couple of years unless there have been significant changes to the contract template. Reviewing instead of reissuing contracts yearly limits the amount of repetitive administration time.
It is important to remember that you can’t force or pressure an employee to sign a new contract of employment.
When employees sign the new contract it is important to:
- Explain to employees why you want them to sign the new contract and what the differences are between the two contracts;
- Ensure that existing employees are no worse off under the new contract;
- Give employees reasonable time to review, consider and seek advice in relation to the new contract; and
- Consider some incentive to the employee to sign the new contract.
Contact one of our Employment Relations Advisors on 07 3852 5177 or email email@example.com for further information on this.