Know Your Employment Contract25 October 2016
Michael Corrigan reminds practices of key considerations when preparing employment contracts.
Getting your practice’s employment contracts right is important for both protecting the practice and providing employee and employer with a clear understanding of their rights and obligations. Beyond this, it is vital that both the practice and employees are aware of terms and conditions of the contract.
Ignorance is no excuse in failing to comply with the Fair Work Act 2009 and the relevant Modern Awards and terms and conditions. Remember, on the spot fines as well as prosecution can be costly.
The following are important considerations when preparing employment contracts.
Use the correct Award
It is important to know which award you should be using for which employee, and getting the classification correct in the employment agreement is paramount.
The main awards relevant to architectural practices are:
- Architects Award
- Manufacturing and Associated Industries and Occupations Award, which covers draughting employees
- Clerks Private Sector Award.
- Modern Miscellaneous Award, which covers Interior designers
- Graphic Arts Award, which covers graphic designers.
Ordinary hours and overtime
Practices need to know what the ordinary hours an employee can work under the relevant Award. Ordinary hours vary according to Award, and firms, especially multi-disciplinary offices, need to be mindful of this.
- Architects Award sets ordinary hours as 8am to 6pm Monday to Friday
- Manufacturing Award sets ordinary hours as 6am to 6pm
- Clerks Award sets ordinary hours as 7am to 7pm.
- Graphic Arts Award sets ordinary hours as 7am to 6pm
- Miscellaneous Award does not set ordinary hours
Overtime and toil vary in each Award. The rate of pay being paid may also change how overtime is paid or how toil is taken.
For those practices that wish to have a rate of pay that encompasses overtime, penalty rates and allowances, Platinum Employee Relations has designed the following clause for ACA members.
The remuneration, the value of other terms and conditions and any payments made at our discretion under this Agreement, are intended to exceed all entitlements under the law or any applicable industrial award or agreement that may apply to your employment. To the extent possible, the excess will be used to offset any monetary entitlements under the law and under any other applicable industrial award or agreement, including penalty rates, overtime, annual leave loading and allowances. This arrangement does not disadvantage you and at the same time complies with any legislative, award or agreement obligation we may have, to the extent that the excess covers such entitlements.
It is important to understand that every practice using such a clause still has an obligation to ensure that the salary exceeds all the above terms and conditions.
You need to ensure that you are paying allowances against the relevant Award, and not another instrument. For example, you need to pay motor vehicle allowance against the Architects Award not the ATO rate, as the award is higher and is the relevant industrial instrument to use.
Notice periods also differ according to the Award in question. For architects the notice period is 1 month, regardless of length of service. For all other employees the notice period is based on the national employment standards and ranges from 1 week through to 5 weeks.
Finally, it is important to include terms in the employment contract such as:
- Intellectual property
- Moral rights
- Protection of interests
- Confidentially (express and implied)
ACA Guide Employment Agreements
The ACA, together with Platinum Employee Relations, has designed guide employment agreements to assist your practice.
Refer to the Know Your Award articles on the ACA website for further information on particular matters.