Can I draft my own employment contracts? What are the risks?

Undoubtedly, there will be a need for businesses to reemploy individuals for the casual, full-time and part-time workforce following the easing of restrictions in Victoria. 

Understandably, many businesses will also be seeking to minimize their overhead and administrative costs in the process. But what are the risks associated with not seeking legal advice or engaging a lawyer to draft your employment contracts?

It is imperative that employers meet the minimum requirements as set out in the National Employment Standards, and the relevant award or any registered agreement when setting pay rates for employees. Ensuring that your employees are receiving their minimum entitlements is imperative to any company or business operating legally.  The penalties for non-compliance can be hefty, and can result in costly legal disputes following an employee’s exit from a company. In other cases, your company could be investigated and fined.

Drafting employment contracts does not need to be unnecessarily onerous or time consuming however it is important to remember that it is not a “one size fits all” exercise. Due to differences between roles, one employer may need to be familiar with multiple varying awards.

In the highly publicised case of George Calombaris’ restaurant group Made Establishment, the group was found to have underpaid employees $7.8 million.  Made Establishment was fined $200,000 for the breaches of its obligations as an employer in July 2019 and was reported as entering voluntary administration in February 2020.

While this is an extreme example, the case highlights the importance of obtaining legal advice at an early stage and demonstrates how small underpayments quickly add up and result in costly issues and back payments.

Scanlan Carroll Lawyers can provide advice as to your employment arrangements. Please do not hesitate to contact our office on [email protected] or (03) 9853 0311.