Australian employment law creates a layered framework of obligations that applies to every employment relationship, whether or not there is a written contract. The Fair Work Act 2009, modern awards, enterprise agreements, and the National Employment Standards (NES) all set minimum entitlements that an employment contract cannot remove. Understanding what the law requires — and what the contract adds — is the starting point for any employer.
The National Employment Standards: your baseline
The National Employment Standards (NES) are eleven minimum standards that apply to all employees covered by the national workplace relations system, regardless of what their contract says. A contract that purports to provide less than the NES is unenforceable to the extent of the inconsistency.
The NES includes: maximum weekly hours (38 hours for full-time employees, plus reasonable additional hours); annual leave (4 weeks per year for most employees); personal and carer's leave (10 days per year); compassionate leave; community service leave; long service leave; public holidays; notice of termination; and the right to request flexible working arrangements.
These standards are the floor. A contract can provide more — higher leave entitlements, longer notice periods, additional paid leave — but it cannot provide less. When drafting employment contracts, the starting point is always confirming that every provision meets or exceeds the NES.
Modern awards: does one apply to your employees?
Modern awards are industry or occupation-specific instruments that set additional minimum conditions — including pay rates, overtime, penalty rates, allowances, and specific leave entitlements — for employees in covered industries.
Most Australian private sector employees are covered by a modern award. Common awards include the General Retail Industry Award, the Hospitality Industry (General) Award, the Clerks — Private Sector Award, and the Professional Employees Award (which covers engineers, scientists, IT professionals, and management consultants).
If a modern award applies to your employees, the contract must provide at least the award rate of pay for the relevant classification and must not exclude any award condition unless an enterprise agreement or individual flexibility arrangement is in place. Many small businesses inadvertently underpay employees by failing to identify the applicable award.
What your written employment contract should cover
While a written contract is not legally required under Australian law, operating without one creates significant risk. Without a contract, the terms of employment are determined by the NES, any applicable award, and any verbal arrangements — none of which are easily proven.
A comprehensive employment contract should specify: the employee's role and duties; the start date; whether the role is full-time, part-time, or casual; the base salary or hourly rate; the notice period for termination; any probationary period; confidentiality obligations; IP ownership; and any post-employment restraints.
Contracts should be written in plain language that an employee can understand without legal training. A contract that an employee doesn't understand is both a practical problem (they won't comply with provisions they don't know about) and a potential legal problem (unconscionable terms may be unenforceable).
Casual employment: the changed landscape
Amendments to the Fair Work Act that came into effect in 2024 significantly changed the rules around casual employment. Under the new framework, an employee is a casual employee only if there is no firm advance commitment to continuing and indefinite work — and this is assessed based on the real nature of the relationship, not just the contract's label.
Employers must provide new casual employees with the Casual Employment Information Statement (published by the Fair Work Ombudsman) at commencement. Casual employees who have worked regularly for twelve months have a right to request conversion to permanent employment.
A casual employee misclassified as casual when the arrangement has the hallmarks of ongoing regular employment may be entitled to unpaid entitlements — including annual leave, personal leave, and overtime — going back years. The casual loading (typically 25%) is not a complete offset for these entitlements in all circumstances.
The right to disconnect
From August 2024, employees of non-small-business employers have a legislated right to refuse to monitor, read, or respond to contact from employers outside work hours, except where the refusal is unreasonable. Small business employees gained this right from August 2025.
Employment contracts and workplace policies need to be updated to reflect this right. Contracts that require employees to be available outside standard hours — or that create an expectation of out-of-hours responsiveness — need to be reviewed against the new framework.
The right to disconnect is nuanced. It does not prohibit employers from contacting employees out of hours; it gives employees the right to refuse to respond, subject to reasonableness considerations. Contracts and policies should acknowledge this right and describe the framework for out-of-hours contact.
Employment law in Australia is more complex than many employers realise. Getting your contracts right from the start protects both your business and your people.