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What to include in an employment agreement?

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When drafting an employment agreement, it is important to include key provisions that protect the rights and clarify the expectations of both the employer and the employee. Here are ten things to consider including in an employment agreement:

  1. Job Title and Description: Clearly define the employee’s position, duties, and responsibilities to establish clarity regarding their role within the organisation.

  2. Compensation and Benefits: Outline the employee’s salary or hourly rate, payment schedule, and any additional benefits such as health insurance, retirement plans, vacation days, or bonuses.

  3. Employment Period: Specify the duration of employment, whether it is a fixed-term contract or an ongoing employment relationship. Include provisions for termination and notice periods.

  4. Confidentiality and Non-Disclosure: Protect sensitive company information by including clauses that require employees to maintain confidentiality and refrain from disclosing proprietary or confidential information even after the termination of employment.

  5. Intellectual Property Rights: Clarify ownership of intellectual property created by the employee during their employment and establish that the employer retains rights to any work-related inventions, patents, copyrights, or trade secrets.

  6. Non-Compete and Non-Solicitation: Restrict the employee from engaging in activities that directly compete with the employer’s business or soliciting clients, customers, or employees of the company for a certain period of time after termination.

  7. Termination and Severance: Define the grounds for termination, including both for cause (such as misconduct or breach of contract) and without cause. Outline any severance or notice periods required in the event of termination.

  8. Dispute Resolution: Specify the process for resolving disputes between the employer and employee, whether through mediation, arbitration, or other agreed-upon methods, to avoid costly litigation.

  9. Confidentiality and Ownership of Records: Establish guidelines on the handling, storage, and ownership of records, documents, and data created or accessed during employment.

  10. Governing Law and Jurisdiction: Determine the governing law that will apply to the employment agreement and specify the jurisdiction for resolving any legal disputes that may arise.

It’s important to note that employment agreements require certain mandatory items (like a Fair Work Information Statement).