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Employment contract

An employment contract is a mutual agreement between an employer and an employee that outlines the terms and conditions of employment. This contract can be formalised in writing or verbally established and is also referred to as a contract of employment.

An employment contract is like a rulebook for the job, detailing what the employer expects from the employee and what the employee can expect in return, including salary, work hours, and job responsibilities. It might also include policies on annual leave, sick leave, and workplace conduct. Whether it's a piece of paper or a verbal agreement, this contract is key in defining the working relationship. Different types of employment (like full-time, part-time, or casual) have different contracts with specific terms tailored to each employment type.

What to include in an employment contract

A contract cannot provide less than the National Employment Standards or the modern award or enterprise agreement that applies. A good written contract sets out the type of employment, position, pay and how it relates to the award, hours, probation, notice, confidentiality and any restraint clause. Putting it in writing helps avoid disputes about what was agreed. For example, a salaried employee's contract should explain which award entitlements the salary is intended to cover, so you can check it is enough.

Read our guide to employment contracts, or see our employment contracts and HR policies.

General information only

This content is general information about Australian employment law, current at the date it was last reviewed. It does not take your circumstances into account and is not legal advice. For advice about your situation, call Employment Compass on 1300 144 002.

Last reviewed: October 2026

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