Employment Contract Template (Full-Time)

Why the contract matters more than you think

A full-time employment contract does two jobs. It sets clear expectations with your new hire — hours, pay, duties, notice — and it protects the business when things change or go wrong. Most disputes that end up in front of the Fair Work Commission trace back to something the contract never said, or said badly. A handshake and a payslip are not a contract; a well-drafted document signed before day one is.

One important frame: the contract sits underneath the law, not above it. The National Employment Standards (NES) and any applicable Modern Award apply regardless of what the contract says, and a clause that undercuts them is simply unenforceable. The contract's job is to be consistent with those baselines and fill in everything they leave open.

What the template must contain, section by section

1. Parties and position

Legal name and ABN of the employing entity (not the trading name alone), the employee's full name, the position title, and who they report to. Attach or reference a position description — it makes performance conversations far easier later.

2. Employment type and commencement

State plainly that the role is full-time and permanent, the start date, and whether prior service (for example, a converted casual) counts toward entitlements.

3. Award or agreement coverage

Name the Modern Award that covers the role and the classification level, or state that the role is award-free and why. Getting this wrong is the single most common contract error in Australian SMEs — check coverage with the Fair Work Ombudsman's tools rather than guessing.

4. Hours of work

Ordinary weekly hours, the usual span of days, and how reasonable additional hours are handled. If you pay an annualised salary intended to absorb overtime or penalties, say so explicitly and note the award's requirements for annualised arrangements.

5. Remuneration and superannuation

The salary or hourly rate, pay frequency, and how it compares to the award minimum. Don't hard-code the super percentage — reference the superannuation guarantee at the ATO's current rate, so the contract doesn't go stale when the rate changes. Confirm the rate itself against your award's current pay guide each annual wage review.

6. Leave and other NES entitlements

You can simply reference the NES for annual leave, personal/carer's leave, parental leave and the rest — but referencing them expressly avoids arguments about what applies.

7. Probation, notice and termination

Probation length, notice periods on both sides (at least the NES minimums), and grounds for summary dismissal. Probation clauses manage expectations, but remember unfair dismissal protections follow the statutory minimum employment period, not your probation wording.

8. Confidentiality, IP and policies

Confidential information obligations, assignment of intellectual property created in the role, and a clause stating that company policies apply but do not form contractual terms — a small drafting choice that saves real pain when you update a policy.

How to use the template well

• Complete every bracketed field before sending — a contract with placeholder text is worse than none.
• Issue it before the start date and require a signed copy back before day one; onboarding is much harder once someone has already started on unclear terms.
• Keep the signed version with the employee's record alongside their tax and super forms — see our onboarding pack template for the full set.
• Review annually, particularly after the Fair Work Commission's annual wage review and any changes to your award.

Common mistakes to avoid

• Copying a contract from another business in a different industry — award coverage rarely transfers.
• Setting a salary "inclusive of all entitlements" without checking it actually clears the award for the hours worked.
• Leaving out a notice clause and defaulting into ambiguity.
• Never updating the contract when the role materially changes — a promotion deserves fresh terms.

Employment terms are regulated territory, so treat this as general guidance and have anything unusual checked by an employment lawyer or workplace relations adviser before you rely on it. For the broader picture of running employment well in a small team, see our people function overview.