About employment contracts

Understand employment contracts and what rules apply to making a contract.

On this page:

What’s an employment contract

An employment contract is an agreement between an employer and employee that sets out terms and conditions of employment.

An employment contract can be in writing or verbal. An employment contract may also be called:

  • an ‘agreement’
  • ‘terms and conditions of employment’
  • a ‘workplace contract’ or ‘workplace agreement’.

Fixed term contracts

A fixed term contract is a type of employment contract.

A fixed term contract terminates at the end of a set period (for example, the contract ends on a set date or after a set period of time or a season).

There are rules that apply to making a fixed term contract and employees on a new fixed term contract must be given the Fixed Term Contract Information Statement.

For more information, visit Fixed term contract employees.

Employment contracts and minimum entitlements

Most employees are covered by the national workplace relations system. This means they get their minimum entitlements from:

An employment contract can’t remove or provide for less than these minimum entitlements.

Tip: Check your award or enterprise agreement

Most employees have an award or enterprise agreement that applies to them.

It’s important to check what the minimum entitlements are in your award or enterprise agreement, even if you have an employment contract.

A full list of awards can be found on our List of awards page.

For more information on how to find an enterprise agreement, visit Finding an agreement.

Pay secrecy

Employees have the right to share (or not share) information about their:

  • pay
  • employment conditions that would be needed to work out their pay.

Some employment contracts may include terms that are inconsistent with these rights. These are called pay secrecy terms.

There are laws that stop employers from including these terms in employment contracts made on or after 7 December 2022.

If a contract does include pay secrecy terms, the terms will have no effect. Find out more at Pay secrecy.

We can give general information on pay secrecy rights. If you need tailored advice about pay secrecy terms in an employment contract, you should seek legal advice. Find out how at Legal help.

Difference between an employment contract and an award

Employment contracts are different from awards.

Awards are legal documents made by the Fair Work Commission, the national workplace relations tribunal.

Awards outline the minimum pay rates and conditions of employment. They cover an industry or a type of job and can cover lots of different businesses and employees.

An award can apply to an employee in addition to an employment contract. However, the terms and conditions of an employment contract can’t provide for less than the minimum entitlements in the award or the NES.

Learn how to find a copy of an award and check entitlements and obligations at Awards.

Example: Entitlement comes from award and not employment contract

Sandra starts a new job as a real estate agent. She signed a written employment contract when she started in the role.

As part of the job, Sandra holds inspections for rental properties. She is required to use her own car to travel to and from the office for the inspections.

Sandra checks her employment contract because she wants to know if there’s a vehicle allowance. Her employment contract doesn’t include any terms about a vehicle allowance but does say her entitlements come from the Real Estate Award.

Sandra checks our website and learns that an award can still apply to her even if she has a written employment contract.

Sandra then checks the Real Estate Award to learn about her entitlements. The award says a vehicle allowance applies in some circumstances.

Using our Pay and Conditions Tool, Sandra finds that she’s likely entitled to a vehicle allowance as she’s required to use her own car for work duties. She speaks with her supervisor the next day about this.

Difference between an employment contract and an enterprise agreement

Employment contracts are also different from enterprise agreements.

Enterprise agreements set out minimum employment conditions and apply to one business or a group of businesses. They are approved by and registered with the Fair Work Commission.

An enterprise agreement will cover multiple employees, while an employment contract is an agreement between an employer and an individual employee.

An enterprise agreement can apply to an employee in addition to an employment contract. However, the terms and conditions of an employment contract can’t provide for less than the minimum entitlements in the enterprise agreement or the NES.

Learn more about enterprise agreements and how to check if you’re covered by one at Agreements.

Tip: Award and agreement free

Some employees aren’t covered by an award or enterprise agreement. They are known as ‘award and agreement free employees’.

For these employees, workplace entitlements will still come from the Fair Work Act (including the NES) and their employment contract. Their pay rate must be at least equal to the National Minimum Wage.

Find out more about entitlements and conditions at Award and agreement free wages and conditions.

Get help with employment contracts

Sometimes problems might come up about an employment contract.

We can provide limited help with employment contracts. Learn about what we can and can’t assist with at Get help with employment contracts.

Tool: Make an employment contract

Employers hiring staff can use a free tool to make an employment contract.

The tool helps you build a basic employment contract that’s tailored to business needs and complies with workplace laws. (Some rules apply about the types of employees the tool can be used for.)

To get started, go to business.gov.au – Employment Contract Tool.

Source reference for page: Fair Work Act 2009 sections 542, 682

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