Employment / Contractor Contracts for Private Practice

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Please find below responses to questions Speech Pathology Australia (SPA) members frequently ask about contracts.

Please note this is general advice and is not a substitute for professional legal advice. Members are encouraged to seek independent advice from an employment lawyer in relation to their particular situation.

Also, the first decision a business owner needs to make before engaging staff is whether or not they are engaging someone as an employee or independent contractor. Historically speech pathologist business owners have engaged staff as “contractors” when in reality many of them would probably be considered to be employees in a Court of Law or by the Australian Taxation Office. This could have serious ramifications for a business owner if they were ever taken to Court by a previous “contractor” and it was determined that the “contractor” was in fact an employee. In this case the business owner and at times the independent contractor may be liable for a number of penalties (such as not deducting appropriate tax, failing to meet pay roll tax liability or superannuation guarantee liability) and can be required to pay back payments, superannuation and other employee entitlements.

For more information about determining whether you are engaging a contractor or an employee go to SPA’s FAQs for members: Employees vs Contractors.

SPA urges members who are considering engaging staff in their practice to seek independent legal advice from an employment lawyer prior to drawing up a contract so that they are absolutely clear as to whether they are engaging a contractor or an employee.

Once you have determined if you are engaging a contractor or an employee then you need to write up a contract.

 

Can I have a verbal agreement with an employee instead of a written contract?

No a verbal agreement is not a contract of employment. SPA advises members to use written contracts when employing staff and/or independent contractors. Verbal agreements can be legally binding, however, the terms of a verbal employment contracts are often harder to prove and written contracts can be more easily enforced.

Does SPA have a template for a contract?

No. SPA cannot provide a template for a contract as the contract is a legally binding document and needs to be written, preferably by an independent legal expert, in relation to the business owner’s individual circumstances.

What should an employment contract include?

An employment contract is an agreement between you and your employee. The employment contract needs to include whether the employer is engaged on a full-time, part-time, casual or fixed term basis (see below), and detail all terms and conditions of employment.

The contract should include:

  • commencement date of employment,
  • the employee’s duties,
  • how many hours they will work,
  • the days they will work,
  • where they will work,
  • how much they will be paid,
  • their employment status,
  • their employment conditions, including leave and other entitlements, and
  • whether an industrial award or collective agreement covers the employment.

You should also consider:

  • the position and duties of the employee,
  • the remuneration package (e.g., use of a vehicle),
  • if a trial period or probationary period applies,
  • measures to protect the employer’s business e.g. confidentiality, intellectual property,
  • provision of supervision and performance appraisal (and the frequency of this) – For more details see SPA’s Position Statement on Professional Support and the Supervision Standards:
  • termination of employment (notice, summary dismissal and redundancy),
  • the application of policies and procedures,
  • requirement to complete pre-existing injury declaration,
  • process for review of contracts & amendments to contracts,
  • use of and return of property to the practice post employment,
  • exclusive service clause, and
  • restraint of trade clause post employment.

Before a contract is drawn up, there is usually some discussion between the employer and employee about the terms and conditions of employment. The employer and employee can agree to vary the terms of the Award (for example: arrangement for when work is performed, allowances, leave loading), however, employers must be careful to ensure that the employee is better off overall in comparison to the Award.

Please note: even if an employee signs a written contract, they’re still covered by the minimum conditions in the relevant award and the National Employment Standards. A contract can’t make employees worse off than their minimum legal entitlements. This means that the entitlements in the National Employment Standards and any award or agreement keep applying, even if the employee has signed a contract that gives them less. See Fairwork: National Minimum Standards

What Modern Award applies to speech pathologists and support staff working in a private practice?

The Health Professionals and Support Services Award (2010) is the Modern Award.

The National Employment Standards and the HPSS Award (2010) contain the minimum conditions of employment for employees covered by this award.

For more information go to: Health Professionals and Support Services Award (2010) and see FairWork’s Awards Pay Guides

What are the different types of employment status?

Permanent: This is ongoing and the employee will receive annual, personal and maternity leave entitlements. The employee generally works regular days/hours. This is only terminated if an employee resigns, retires, dies, is dismissed or made redundant. It can be full or part time.

Casual: The employee works irregular days/hours. They can be advised there is no work available for a period of time and can be terminated at any time. They can legally refuse a specific work opportunity and are paid a casual loading. They do have some rights including 2 days carers’ leave/year. Modern awards contain a secured employment provision which means a casual employee employed on a regular and systematic basis for a 6 month period can elect to become permanent if the work is continuing.

Fixed term contract: A fixed term contract is only required when the employee is needed for a fixed period of time. The contract must have clear start and end dates. It is more difficult to terminate a fixed term contract.

What is an enterprise agreement?

Enterprise agreements set out the employment conditions between an employee or group of employees and an employer.

Enterprise agreements can be between:

  • an employer and a group of employees,
  • more than 1 employer and a groups of employees, or
  • 1 or more employers and 1 or more unions for a genuine new enterprise (i.e. one that doesn’t have employees yet). These are called Greenfields agreements.
  • See Fairwork: Agreements for more information.

Do I need to give the employee a copy of the contract?

Yes, and from 1 January 2010 you are also required to provide all new employees (as soon as possible after commencement of employment) with a Fair Work Information Statement. A copy of the Fair Work Statement can be obtained from the Fair Work website www.fairwork.gov.au and for further information you can call the Fair Work Infoline on 13 13 94.

What other documents do I need to provide employees with when they commence employment?

You need to provide your employee with a Letter of Engagement and when they have completed their probation either a Letter of Successful Probation or a Letter of Unsuccessful Probation.

Templates for these letters are available on the Fairwork website - Employing staff

Remember to return to this site and download the latest version of the template each time you want to use it to ensure accuracy.

Employers must also ensure that copies of the HPSS Award (2010) and the National Employment Standards (NES) are available to all employees either on a notice board which is conveniently located at or near the workplace or through electronic means, whichever makes them more accessible. It is recommended you have evidence to indicate you have provided access to these documents in case of an investigation of your workplace by Fairwork.

What information about employees do I need to keep a record of?

You will need to keep the following up to date information about employees/contractors:

  • Signed letters, contracts etc.
  • Personal details
    • Next of Kin and contact details
    • Bank details
  • Tax File Number
  • Superannuation
    • Fund details
  • SPA certification
  • Professional Indemnity Insurance
  • Working With Children Check (WWCC) documentation
  • Medicare provider Number
  • ABN (if any)

Where can I find other information about employment contracts?

I am wishing to engage an independent contractor where can I find information about contracts for contractors?

See the government’s business website: http://www.business.gov.au/business-topics/business-structures-and-types/independent-contractors/Pages/default.aspx for links to two handbooks that may be helpful: Contracts Made Simple and Contracts: the Essential Handbook.

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Original: December 2013

Updated: March, 2014, June 2015, December 2015, June 2017

Disclaimer: To the best of the Speech Pathology Association of Australia Limited’s (“the Association”) knowledge, this information is valid at the time of publication. The Association makes no warranty or representation in relation to the content or accuracy of the material in this publication. The Association expressly disclaims any and all liability (including liability for negligence) in respect of the use of the information provided. The Association recommends you seek independent professional advice prior to making any decision involving matters outlined in this publication.