What is the difference between an Employment Agreement and an Employee Handbook?
With so many employment agreements, templates and other documents used in business these days, it is sometimes confusing to know what applies when, and how best to implement such documentation to more effectively protect your business.
Employment Agreement
An employment agreement is the primary document that creates the actual legal rights and obligations of an employer and an employee at law. Where an employee is also covered under a Modern Award or Enterprise Agreement, that Award / Agreement will establish the minimum wages and working conditions of the employment, and will operate in conjunction with the employment agreement.
The terms of any employment agreement are also subject to the National Employment Standards (NES).
An employment agreement can only be varied by consent between the employer and an employee (i.e an employer cannot unilaterally change an employee’s employment agreement without the employee’s consent).
Employment / Staff Handbook (also known as a Policies and Procedures Manual)
A workplace handbook / manual lists various policies and procedures that all employees within a workplace are expected to follow. The reason that such policies and procedures are contained in a separate handbook / manual, and not in an employment agreement, is as follows:
- A handbook / manual applies to all employees, whereas an employment agreement only applies to one employee
- A handbook / manual is generally updated less regularly than employment agreements
- A handbook / manual may contain very strict policies and procedures, as well as policies and procedures which are ‘suggested’ or ‘recommended’ – an employment agreement only contains rights and obligations which are enforceable at law
- A manual / handbook can be varied by the employer without the consent of employees, whereas an employment agreement can only be varied with the consent of an employee
What should be best practice for my business?
Here are some tips to assist you in protecting your business:
1. Employers should have in place BOTH an employment agreement and an Employment Handbook at all times
2. The employment agreement should ALWAYS state that ‘the employee agrees to comply with all current and future policies of the employer’
3. The insertion of such a clause will allow you to make changes to your policies and procedures over time, and incorporate such changes into an employee’s employment agreement without their consent (in effect, it is almost the same as being able to vary an employment agreement without the employee’s consent, which is sometimes necessary in business).
If your business is a Member of Fairt Work Online, you can access a standard Employment Agreement and a Policies and Procedures Manual as part of your membership in the ‘Documentation’ part of their Members Area.
Non-members can purchase these standard documents on our Online Store - CLICK HERE for more information.
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