Employment Agreements Types



What is an Employment Agreement?
An employment agreement is a document, signed by employer and employee, setting forth the terms of their working relationship. It clearly describes what the employee has to do for the employer (for the job) and what the employer has to do for the employee (the salary paid).

The agreement also addresses a number of other issues.

These include:

  • The duration of the job.
  • The duties and responsibilities of each party.
  • The benefits involved in the relationship.
  • Grounds for termination.
  • Restrictions on the employee to compete with the employer’s business once he/she leaves.
  • Protection of any trade secrets, client list or database.
  • Ownership of the products the employee works on.
  • Methods for resolving any disputes between parties.
  • Any terms for redundancies, or other similar situations.


When an Employer Hires an Employee
When an employer offers an applicant a job, the Act requires the employer to:

  • Provide them with a copy of the employment agreement.
  • Advise them that they are able to seek independent advice about the agreement before they sign it.
  • Give them a reasonable amount of time to get advice.
  • Ensure that the bargaining is carried out fairly.

The final employment agreement has to be in writing to be enforceable.


Types of Employment Agreements
Under the Act, all employment agreements have to be in writing and must contain certain minimum terms or clauses.

This applies whether the employment is full-time, casual or part-time.

  1. Collective Employment Agreements:
    A collective employment agreement (CEA) means an employment agreement between at least one union and one employer. A union must be registered. A group of employees cannot be covered by a CEA unless they are union members. There are many minimum terms for CEAs and specific requirements for the CEA bargaining process.

  2. Individual Employment Agreements:
    An individual employment agreement (IEA) is an agreement between one employer and one employee and does not cover union members. They are specific in their requirements and they have bare minimum terms.

  3. Fixed Term Agreements:
    Fixed term agreements expire at a certain time, whether it is when a particular project ends, or at the conclusion of a season etc. They are only used in limited circumstances where there is a reason for having the fixed term. For example, seasonal workers, farm workers and other employees who are replaced from time to time.

    The employer has to advise the employee of the reason for making the fixed term and they have to explain why the employment will come to an end at a later date. These agreements cannot be used to avoid obligations the employer has to an employee (in good faith). For example, an employer cannot get out of the responsibility of acting fairly and following through proper procedures in an employee dismissal situation.

  4. Probationary Period:
    Under the Act, a probationary period must be in writing. Even if an employee is under a probationary period, the good faith obligations for dismissal etc will still apply, and an employer has to comply. A probationary period does not mean an employer cannot get rid of somebody without notice, or after consultation at the end of the period.

  5. Casual and Part-timers:
    Employment agreements have to be in writing and this includes casual and part-time staff. The minimum rights applying to all employees also apply to casual and part-time workers.