The minimum conditions of employment as laid down under Fair Work Act 2009 (FWA) uniformly apply to everyone including the most senior executives. However, minimum conditions are guidelines for deciding the basic circumstances of work and these needs to be customised according to the specific requirements of the employee.

The onus is on the executive employees to negotiate terms and conditions. The means of negotiation enables private sector executives to customise their terms and conditions of employment. Meaning that the employment contract forms part of executive employee law.

The FWA offers an independent dispute resolution mechanism but it is not of much help for middle to senior level executives in resolving their contractual disputes and the common law courts are the appropriate court of judicature. Fair Work Australia, the tribunal formed under the FWA, provides a salary cap (currently $123,300) which restricts the remedy available under it from being applicable to senior executives earning high salaries and pay packages. It is one of the major obstacles for the FWA to be unitary and uniform. Though, the salary cap is revised regularly, it definitely restricts the application of FWA except in the case of the “adverse action” provisions of the FWA.

In employment law adverse action is defined in section 342 of the FWA and has wide application to all employees. Most adverse action cases involve dismissal and are an avenue for recourse not only for employees who are terminated and earn above the unfair dismissal cap but also for employees who terminated during their probationary period; that is the first 6 months of their employment or the first 12 months of their employment for small business.

Checklist for Negotiating an Employment Contract

An employment contract should be negotiated after careful consideration and scrutiny of the key terms of the contract. The contracts of senior executives in Australia mostly favour the employers.

A checklist of key items to consider may be on the following lines-

i)              Specific terms and conditions

An employment contract must clearly specify the terms and conditions of the contract and there should not be any confusion regarding the position and designation, pay package, incentives and notice period.

ii)             Awareness about the Company Policy and Procedural Manuals

An employment contract should never mandate that consent to the contract automatically includes consent of the concerned employee to the Company Policy and Procedural Manuals. In that scenario, the terms and conditions of employment can be altered by merely amending the terms of the Company Policy and Procedural Manuals.

iii)            Creation of Rights

An employment contract creates a number of rights and liabilities. In case of employments not bound by a specific contract, there is a possibility that the terms will be guided by common law principles which are often far more beneficial and reasonable. A sudden procedural requirement of signing an employment contract should be carefully scrutinised by an employee since it may introduce a lot of post-employment restrictions.

iv)           Proper Analysis of Restraint Clauses

An employment contract often includes various clauses including restraint of trade clauses. The future implications and operational period of these clauses should be carefully considered before signing the contract.

v)            Careful scrutiny of all the related documents

The employment contract guides the entire period of employment and post-employment rights and liabilities of an employee. Thus, a careful scrutiny of all the documents referred in the contract like Company Policy and Procedural Manuals, should be done before providing consent.

Expatriate Employment Agreements rather then Executive Employment Law

Negotiation of an expatriate employment agreement will also include the above mentioned considerations. However, additionally the employee should consider the corporate structure, location of the employer and the International Assignment Policy of the employer.

An expatriate employment contract should also involve clauses regarding airfare expenses, relocation arrangements, leave policy and payments. An employee should consent to the agreement only after careful consideration, since the risk involved with expatriate employment contracts is more as it involves overseas travel. An expatriate employment contract also involves people from different countries and thus the employee should have a fair idea about the laws and rights accrued in different jurisdiction where his future employer’s office is situated.

How Owen Hodge Can Assist Executive Employees with the Law

Expert legal opinion and advice are very important in negotiating an executive employment contract and Owen Hodge Lawyers, have extensive experience in achieving the desired contractual outcomes for middle and senior level executives.

In the current period of turbulent economic times, the requirement to maximise contractual entitlements is of critical importance. Be it in formulating favourable termination clauses or reviewing conditions of executive bonus structures the team at Owen Hodge can ensure optimal contractual outcomes for middle and senior level executives.

Rights of Executives
Employment Contract after the End of your Employment
Employment Contracts & Awards
What to Consider When Hiring a Contractor
Workplace Rights and Adverse Action
Wrongful Dismissal Vs Unfair Dismissal
Executive Employment Agreements rather then Employment Law
Breach Of Employment Contract / Wrongful Dismissal
Breach Of Fiduciary Duties
Changes to Parental Leave
Disciplinary Matters – Deceptive And Misleading Conduct
Employment Law
Employment Rights – Termination Of Employment
Industrial Law
Sexual Harassment Laws

Law & Employers
How to deal with Workplace Bullying
Minimum Wage
Paid Parental Leave
Public Sector Employees
Redundancy & Redundancy Pay
Redundancy of Executive Employees
Restraint of Trade
Small To Medium Businesses And Employment Law
Surveillance in the Workplace
Terminating Employment Contracts
Think twice before Dismissing Employees on Workers’ Compensation
Unfair Dismissal – Not Covered By An Award
When Competitors Steal Staff There Are Legal Consequences
Work Place Safety

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