What to Check in an Employment Contract Before You Sign

Most disputes about employment start with a document nobody read closely. This is a practical checklist for both sides — an employee about to sign, and a small employer about to issue a contract.

The basics that decide everything else

• The employing entity. Is it a Pty Ltd company, a sole trader, or a partnership? This decides which industrial relations system applies, which award covers the role, and which body hears a dispute.
• The type of employment. Full-time, part-time, casual, maximum-term or fixed-term. Each carries different entitlements on termination.
• The award or agreement. A contract cannot pay below the applicable award or minimum wage. If the contract does not name one, ask which applies.

Pay and hours

• Whether the rate is an annualised salary absorbing overtime and penalties, and if so, what it absorbs.
• Ordinary hours, and how additional hours are treated.
• Superannuation, and whether it is on top of the stated figure or included in it.
• Any bonus or commission — how it is calculated, and whether it is payable if employment ends before payment date.

Ending the employment

• Notice periods on both sides, and whether payment in lieu is available.
• Any probation period, and what it actually changes.
• Whether the contract allows summary dismissal, and on what grounds.
• What happens to accrued leave and unused entitlements.

Restraints and confidentiality

• Restraint of trade clauses — their duration, geographic area and what activity they restrict. A restraint must be reasonable to be enforceable, and cascading clauses are common.
• Non-solicitation of clients and of other staff, which is often broader than people expect.
• Confidentiality and intellectual property, particularly where the role produces original work.

For employers

A contract that misstates the entity, omits the award, or contains an unenforceable restraint is worse than no contract at all, because it creates false confidence. It is worth having a template reviewed once rather than fixing it after a dispute.

Sources

• Fair Work Ombudsman — Employment contracts
• Which system of employment law applies

General information only, current at 26 July 2026. It is not advice about a particular contract.