Unfair Employment Contracts

by | Employment

From time to time, certain States have had laws as to a review of unfair contracts, particularly in an employment setting. These were rarely availed, in part because the difficulty of determining a fairness test, but the national reach of the Fair Work Act 2009 (“the Act”) tackles the issue in another way.  We do not take a position on whether that other way is good or bad as policy.

Employment Standards Imposed by Law

The Act sets absolute minimum standards which apply irrespective of any employment contract (the National Employment Standards).  These are found in Part 2-2 of the Act and set the minimum bar as to working hours, flexible work arrangements, various leave entitlements, notice of termination and redundancy. Fairness is irrelevant. These terms are imposed by law, not reached by agreement.

Objectionable Terms

Then the Act sets out certain terms that are not valid even if contained in an employment contract, such as docking pay or setting off wages for a debt to the employer, or a term that may discriminate in treatment of employees.

Approval of Agreements

Fairness is implied in the need for Fair Work Commission (“FWC”) approval of enterprise agreements. Also, the Act imposes certain mandatory terms in enterprise agreements.

Awards

The Act creates modern awards, under which the FWC can set (for example) minimum wages.

General Protections

Part 3-1 of the Act sets out various workplace rights, the infringement of which can constitute an offence and a basis for expanded damages.

Conclusions

‘A fair go all round’ is still the template for employer/employee relations but the flexibility of industrial disputes has been profoundly narrowed by the Fair Work Act 2009. The various, extensive legislative and regulatory provisions are couched in prescriptive language and what may seem fair in an employment contract may be invalid, even illegal. The scope of bargaining on an employment contract is constricted. For small businesses, enterprise agreements are often impractical and modern awards inadequate.

An employment agreement is no longer the concern of the worker and his/her boss. Any letter of employment needs to be drawn in accordance with the Fair Work Act 2009. If not, attempts to enforce what may have been agreeable to all, as fair, could cause more trouble than they’re worth.

For further information please contact Peter on 8362 6400 or email Peter JakobsenJoin our mailing list to receive updates and advice on current issues.

  • Peter Jakobsen

    About the author: Peter Jakobsen

    Peter has a wealth of experience in many areas of the law but practises primarily in the areas of civil and commercial litigation including employment matters, negligence, defamation, leasing and contractual disputes and debt collection.

    Peter is a skilled and clever advocate that brings all of his intelligence and significant Court room experience to each and every matter to achieve excellent results for his clients.

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