The beginning of employment is such a crucial time. As an employer or manager, you’ve got the person selected for the role coming into the business and you want them to get off to a good start, to quickly feel at home, and to start performing as fast as possible. Your new employee wants to get off on the right foot, too. They want to quickly find their place, feel welcome and supported in their new workplace, and start contributing. It’s a time for laying the foundations of a productive and healthy relationship that will lead a new employee to be a skilful, valued team member who sticks with the company and helps drive its success.
The process of bringing new hires into a company used to be known as induction or initiation, but these days is more commonly called onboarding. Onboarding works best when it is a broad, well-designed process that gives each new employee all the tools, information, and insight they need to become an effective team member, while at the same time integrating them with the business, its people, and culture. The foundation document in all this is the employment contract. The employment contract sets out the terms and conditions that govern the employment relationship and, by law, every employee must have one.
Because of its legal significance, the employment contract is vital in setting expectations and stating what all parties are entitled to, and it provides a detailed reference should there be any issues or misunderstandings down the track. In this white paper, we take a close look at the initial, formative period of employment, exploring why onboarding is such an important process and how to get it right, what to watch out for when you create employment contracts, and why it’s useful for companies and staff to have other important policies and procedures in writing.
Taking on a new team member is a big decision, especially for small businesses, and the recruitment process can be time-consuming and costly. Finding the best person for the job is an important first step, but it’s what happens when the person actually starts work that can make or break their success as an employee.
Even if it’s an internal promotion, there’s a mix of excitement and nerves when a new person starts a job. As an employer, you’re unsure if the candidate who shone on paper and during interviews is actually going to excel in the role. You will have chosen them based on their skills and aptitude, but there’s still a lot for them to learn, from the physical basics of the workspace to who their coworkers are, what technology and tools they will use, and the wider company culture.
This is where a comprehensive onboarding programme gives your new employee and the business the best possible chance at success. It’s about realising potential using a structured approach that fully prepares the person for their position and assists them as they grow into it. For the business, it means your new employee can become a productive team member in the shortest time possible, so any dip in productivity or customer service is minimised. A well-designed onboarding system can deliver targeted training and orientation, speeding up proficiency and minimising obstacles. Instead of spending long hours on instruction, managers can focus on building rapport and learning about the new team member’s talents and aspirations, which helps ground the employment relationship in mutual understanding and trust.
If the new employee feels valued and supported, they will be better able to concentrate on getting comfortable with their position and the team around them. As well as confirming they made the right decision to join the company, effective onboarding establishes that their performance and success is important and planned. This all sets a platform for long-term performance, achievement, and loyalty. Research by the Wynhurst Group found new hires who completed a structured onboarding process were 58 percent more likely to remain with the company three years later. Another study published in the Academy of Management Journal found that new employees who didn’t get the right direction and support in the first 90 days were unlikely to last much longer than four months in the job. Given the investment required to hire a new employee, failure to properly onboard them is a significant cost to the business.
Of course, despite the best intentions, things can get bumpy. Proper onboarding gives you the best chance of spotting problems early, so you can implement strategies to overcome them. If it all goes badly wrong and there is no option but to exit the person from the business, it will be faster and easier if you have followed a structured process. While under the Fair Work Act an employer is protected from a claim of unfair dismissal by an employee during the probation period of employment, a properly structured and managed probation process will allow you to assess new employees and deal with hires who don’t work out in a way that will withstand scrutiny.
Gets new employees up to speed faster
Higher employee engagement and job satisfaction
Better staff retention
Teaches about the company culture and goals
Supports good hiring decisions and quick recovery from poor ones
Sets a base for further learning and development
Less stress for both employer and employee
Better customer satisfaction
Planning the way you bring new employees into the business should start before you even recruit for a position. You want to make the onboarding process as smooth and inclusive as possible, so any new person wants to be part of the team and feels connected to the organisation. Remember, part of recruitment is making the business attractive to candidates, but any promises made can be quickly overshadowed by a bad introduction. Think about how each step is structured. Create a checklist (or checklists) to formalise the induction programme. This will help you and your new hire understand the process, and it will make sure you don’t overlook anything important.
Before the new person starts, make sure the job offer, employment contract, and any pre-employment checks are done efficiently. Order any equipment or resources, so they have everything they need on the first day. Contact them personally to welcome them and confirm their start date. Let the rest of the business know about the new person. There will be a lot to cover when they do start work, from simple things like getting to know the building and the company IT system to understanding the demands and intricacies of the role itself.
Training is a big part of onboarding, but your programme should be designed to build trust, connection and confidence as well as competence. While it’s essential that the new person understands the company’s expectations, goals, and ground rules, it’s also important for them to have someone they can talk to if they have questions or problems. Try to focus on the individual. Take a step back and reflect on what it would be like to be a new employee, how the business and its culture would appear, and how the various roles and responsibilities intersect with theirs. Personalising the onboarding experience will make it more engaging and meaningful, which will help connect your new employee to the company and the existing team. Technology can help. As well as making it more enjoyable and effective, components such as targeted online training can lighten the burden on management.
Like all other performance processes, you need to set some key objectives that will give everyone a clear yardstick to measure success against. Schedule regular review meetings throughout the induction period to check all is going to plan and to make sure you are able to take remedial action, if needed. Onboarding should be seen as the start of a long-term journey of learning and development. US research by the MIT Sloan Management Review found it takes anywhere from 8 to 26 weeks for an employee to reach full productivity, and in the modern working environment, most people will only view that as a base that sets them up for ongoing growth with the business. Remember that onboarding plays a crucial part in establishing a healthy employment relationship and should be seen as the first step in a continuous process that aims to ensure every employee, and the business at large, achieves success
Successful onboarding should be a recipe for success, kicking off the employment relationship in the best possible way. Sometimes, however, that new person just doesn’t work out and you may have to make a decision about moving them on. A good onboarding process (and checklist) will give you something solid to work with and provide a very objective and clear basis for this decision. This will make exiting the employee during the trial or probationary period much easier
Most Australian employers are aware of the importance of the employment contract. While employment contracts are not required under Australian Law, it is recommended that every employee have a signed, written employment contract. The terms and conditions of the contract are negotiated between the employer and the employee, so it is vital to ensure the document is well-written and clear, so both the employer and the employee know what is expected of them and what each party is entitled to. For starters, there are certain clauses every employment contract must contain, things like a description of the work, the place of work, agreed hours (or an indication of the hours), the wage rate or salary and how the employee will be paid. Every worker has a number of minimum statutory rights, as set out in the National Employment Standards. Even if you don’t state these in an employment contract (or you have other terms in the contract), these minimum rights are still legally binding.
Clearly defining the terms and provisions, and making sure they match the reality of the job the person needs to do, the hours and frequency of their work, and other terms and conditions, is key. Be careful to ensure each employee is on the right type of employment contract (permanent, fixed-term, or casual). If you agree to a probationary period, you must include details of this, as well as any expectation of on-call availability, the procedure for shift changes, and the process for resolving employment relationship problems or personal grievances.
From there you can add other clauses to suit the needs of the business and the employee. Think carefully about whether you may need to change the employee’s hours or place of work, or make provision for cancelling shifts. If the document is clear and legally robust it will reduce the likelihood of problems or disputes down the track. If any misunderstanding or problem should arise, then you can refer to the employment contract to clarify things.
By following the right steps, it is reasonably easy to ensure your employment contracts comply with the law. It’s not worth the risk trying to take short-cuts, so if you’re not sure, seek advice. You don’t want to face an employment dispute, a hefty fine from the Fair Work Ombudsman, or end up in the Fair Work Commission because there are issues with the employment contract. Remember, an employment contract is based on good faith and mutual understanding, and it forms the basis of the relationship between you and your employee. Having a watertight contract will get you off to a good start and provide an honest foundation to build on.
While it may be tempting to think you can get someone to work at your company without drawing up an employment contract (EC) that you both sign, don’t give into temptation as you leave yourself exposed if things go wrong. The employment contract forms the legal basis for employment, and if you are subject to an inspection by the Fair Work Ombudsman, the employment contract will provide a firm basis to prove you are paying your employees correctly. If you are in the process of hiring a new team member, or have staff that have been with you for a long time, you should absolutely guarantee you have a written employment contract for each of your employees. That includes your casual and part-time workers.
Under employment law, there are three types of employees: permanent, fixed-term, or casual, and each person’s employment contract must match the type of work they do, the hours and frequency of their work, and other terms and conditions. From the outset, it is crucial to get each employee on the right type of employment contract. This may seem reasonably straightforward, but there are some mistakes that businesses commonly make:
Using a casual employment contract for part-time workers. As soon as a person is required to work regular hours, no matter how few, they may not be a casual.
Hiring contractors who are actually employees. Contractors are self-employed and aren’t covered by most employment related laws. (Find out more about the differences between contractors and employees at https://www.fairwork.gov.au/ find-help-for-independent-contractors)
Having an employee on a type of contract that does not match the reality of their work could mean you face an employment dispute or other costs, including outstanding wages, holiday pay, or PAYG tax. So before you hire someone, it’s essential to consider what work needs to be done, how often, and for how long. That will make it easier to choose whether a permanent, fixed term, or casual employee is the best fit. Find out more about employment types at https://www.fairwork.gov.au/employeeentitlements/types-of-employees.
At its most basic, every employment agreement must have a number of clauses that are legally required. These are:
The names of the employer and the employee.
A commencement date.
A description of the work to be performed (keep a copy of the job description with the employment contract).
An indication of the place of work.
The agreed hours.
The wage rate or salary payable and how it will be paid.
Leave provisions at least equal to the national Employment Standards.
Superannuation.
Termination Provisions and Redundancy Pay.
The nature of the employment - for example, if the employment is fixed-term or permanent.
As you can see, the mandatory clauses aren’t extensive and it’s reasonably easy to ensure your employment contracts comply with the law. Because of this, Fair Work Inspectors can get pretty frustrated with businesses whose contracts don’t meet the basic requirements. Also, if you ever found yourself in an employment dispute, a contract without all the “must have” provisions may not provide the necessary legal protection.
In Australia, every employee enjoys the protection of minimum rights, under the National Employment Standards and/or a relevant Award. These minimum entitlements are the responsibility of the employer and, by law, all employment contracts must provide them to all employees. As an employer, you can’t ask your employees to agree to less than the basic rights and an employee could make a claim for disadvantage, breach of good faith, or unfair bargaining if they believe they were significantly disadvantaged during negotiations or during their employment.
Even if you don’t include them in an employment contract or have terms in the contract that don’t comply with the law, the minimum rights are still legally binding and if a Fair Work Inspector finds you have breached them, you could owe your employee(s) unpaid wages or back pay for leave. You could also be fined. Remember, the employment contract is the basis of the relationship between you and your employee. Having a watertight contract will get you off to a good start and provide an honest foundation to build on. Find out more about minimum rights of employees under the National Employment Standards at https://www.fairwork.gov. au/employee-entitlements/nationalemployment-standards.
While the good old DIY approach might save time, taking an old template and applying it to all new employees can be risky. Sure, most individual employment contracts are broadly the same for all employees, but failing to tailor your contracts to each employee means you may miss important things (such as all the mandatory clauses) and put you in jeopardy of not complying with employment regulation. You don’t want to end up in an employment dispute and find the contract is missing important elements and is not legally binding. An administrative error because you reused an old template is no defence. Personalising the employment contract will not only safeguard you from unnecessary risk, it will ensure it is specific to the position, the person, and the needs and goals of your business.
An employment contract is based on mutual understanding and everything in it should be clearly understood by both parties. Any ambiguity in the contract could mean that your employee does not know what the business expects of them, and what their obligations and duties are. If you agree to a probation period, a certain number of working hours, a roster, on-call availability, or procedure for shift changes, these things should be clearly set out in clauses in the contract. Ensuring the terms and provisions are all clearly defined and match the reality of the job the person needs to do will ensure the employment contract is robust, and will greatly reduce the likelihood of problems or disputes down the track. The employment relationship will be a lot sturdier because you also know exactly what your employee expects of the business, for example, what allowances they may qualify for or how they can earn incentives such as bonuses, skill payments, or study entitlements. As in all relationships, honesty and transparency are always the best policy.
Being clear is the overarching rule, but there are some areas where being too specific in the employment contract could be a disadvantage. For example, if the contract has stated times when your employee can take rest and meal breaks and this turns out to be difficult to achieve in the regular workday, it could be a breach of your employment contract. Both parties would be better served if the contract leaves room for flexibility or doesn’t specify times at all. A good rule of thumb is, aside from the provisions you are legally obliged to include, only add those that you are confident you want to bind your workers to and that you want to be bound by. Employment contracts can be changed, but only if there is a genuine reason and both parties agree. Going back to tweak them over and over so they match the reality of the job could be laborious and may strain the relationship you have with your team members.
So you’ve worked through the mandatory clauses and added any others that ensure your employee (and you) know exactly what’s expected of them. At this point, you might be tempted to include policies and procedures you want to be part of the business culture. But before you do, think about whether you want to give the rules the permanence and legal weight of a clause in the contract. It may be better to create non-contractual policies and procedures you want workers to follow. Doing that will give you the flexibility to alter them if things in the business or wider industry change, rather than having to go through the process of changing the employment agreement. Any policies and procedures that are contractually relevant, however, should be explicitly referenced in the contract so a new employee knows they exist and that it’s part of their job to know and follow them. For example, if the business gives the person a company car as part of their package, you should have a clause outlining expectations of company vehicle use. If you keep the clauses short and simple, they will be easier to understand and abide by.
Once you’ve created an employment contract and you and your employee have signed it, you both must follow the obligations within it. It may be tempting to take shortcuts in the workplace - for disciplinary reasons or if you feel your team should be more productive - but it’s not good practice. One of the guiding principles of the Fair Work Act is that the employer and the employee must act in good faith. That means if an employee comes to management with a concern, you must listen, investigate, and take any necessary action to resolve the issue.
Likewise, if you have a problem with an employee, you must handle it promptly and fairly. A mandatory inclusion in the employment contract is an explanation of how to resolve problems in the employment relationship, and that process should be followed. If you’ve also included a disciplinary process (which we don’t recommend), you must follow the steps that have been agreed to. Failure to adhere to the provisions of an employment contract or to act in good faith could mean an employee could successfully challenge you in any dispute. Fair Work Inspectors may also fine you. It’s much better to see the contract as a building block for quality employment relationships, and a building block for a workplace culture of cooperation, trust, and excellence.
So you and your new employee have signed the employment contract, and you’ve filed it somewhere safe and accessible. At this point, you could leave it to gather dust (or its digital equivalent). However, going forward, it is much better to regularly review your employment contracts and update them if necessary. For example, if there are changes to the nature or terms of the job you should update the contract. For example, you should amend the contract if the hours of work change (this includes guaranteed hours, days of work, or start/finish times). You can get into trouble if you don’t. Casual employees should be issued a revised contrac tof employment every 6 months and consideration needs to be given if the hours worked over that 6 months will continue in a regular and systematic pattern, or whether they need to be changed to meet the operational requirements of the business.
There must be a genuine reason for any changes and any amendments must be discussed with the employee and be made in writing. Regularly reviewing your employment contracts will also mean you stay compliant with laws and regulations. There are also annual changes, e.g. Fair Work Commission annual review of minimum wage rates, and you don’t want to be caught out because you failed to update the employment contract.
Drafting an employment contract should make you reflect on the business as a whole; how you want your workplace to run and the things you want to emphasise. You may be inclined to reference every policy and guideline the company has, but before you do, you should think about whether you want to give those things the legal authority of a clause in the contract.
A good rule to follow is, that other than the provisions you are legally obliged to include, only add those that you are confident you want to bind your workers to and that you want to be bound by. From there, it is better to create other non contractual policies and procedures. You will then be able to alter them if things in the business or wider market change, rather than having to go through the negotiations involved in changing the employment contract. There’s no need to go overboard and draft up policies to cover absolutely every aspect of the business. They should provide useful information on responsibilities and rights in crucial areas, supporting but not duplicating or contradicting your employment contracts.
A good place to start is having policies on things like health & safety, bullying and harassment, staff conduct, customer service standards, IT and device use, and how to manage expense claims. Make sure the policies are tailored to the needs of your business, and keep them as simple as possible. The better everyone in the organisation understands what they are expected to do and how they are expected to act, the more likely they are to do it. Ambiguity can lead to misunderstandings, disagreements, and mishaps.
Australia has a robust workplace health and safety system. This requires businesses to not only monitor and record incidents but to also proactively identify and manage risks. By law, your business needs to ensure workers’ health and safety and manage work risks ‘so far as is reasonably practicable’. You also need to make sure information about WHS is shared with workers, and workers are engaged in WHS matters. While there is no legal obligation to write down your risk-management efforts, having a written WHS policy will help ensure you have identified and managed all the risks. Every business and workplace is different, so thinking systematically will mean your health and safety efforts are tailored to the specific needs of your company.
The policy doesn’t need to be long but it should describe, in clear and simple terms, how your workplace will be kept safe and healthy and the procedures necessary to achieve it. The aim is to build an WHS culture that’s open and collaborative, so all your team members are involved and understand what they need to do. Aside from keeping your workplace safe and ensuring you meet your legal responsibilities, having an WHS policy will increase productivity, reduce absenteeism, and give your workers, management, and customers confidence and peace of mind. WHS matters are regulated by seperate law to the Fair Work Act 2009. Safety Laws in each State and Territory designate a WHS Authority with its own Inspectors and different processes. WHS matters must never be characterised as employment matters. WHS matters must be managed within the context of WHS regulation and never as an employment dispute, grievance or matter.
Part of keeping workers safe and healthy is making sure your workplace is free from intimidation and inappropriate behaviour. Workplace bullying and harassment (including sexual harassment) is a serious issue - studies suggest that as many as one in three workers experience some form of bullying or harassment each year. This is important. Bullying and harassment can create a risk to health and safety, affecting people physically and mentally, disrupting your workplace, and reducing productivity.
A bullying and harassment policy will help build a company culture where all people are respected. It helps set the example of what is acceptable in the workplace and clarifies the rights and obligations of employees and managers. The policy should define the reporting process, and document how your business will handle issues and seek to resolve them. By law, bullying, harassment, and discrimination must be investigated and the person affected must be supported by the employer. Make sure every employee is aware of the policy when they sign their employment contract, and make sure it is a living document that is regularly reviewed. And like all workplace policies, if management isn’t seen to support and model it, having it in writing will do more harm than good. Find out more about bullying and harassment at www.employment.govt.nz/resolvingproblems/types-of-problems/bullyingharassment-and-discrimination.
Once you have the essential policies covered, you can then develop a flexible code of conduct (you may want to call it a handbook or policy manual). The code doesn’t have to be complex, but should cover a range of general expectations for everyone in the business. It needs to articulate the values the company wants to foster in leaders and team members, aligning standards of professional behaviour with the company’s own values, principles, and mission. While a code can’t prevent inappropriate or illegal conduct, it should provide employees with a set of ethical guidelines to empower their decision-making and make it clear what the consequences of breaching these standards could be.
A code of conduct can be an important step in establishing an honest, inclusive culture, but simply requiring team members to read it isn’t enough. You should view it as part of an ongoing process that requires improvement, reinforcement, and training. The scope of the code will be determined by the particulars of your business, but will usually cover the use of company assets and resources, protecting confidential information, avoiding conflicts of interest, and complying with laws and regulations. Depending on your business type and industry, some of the key areas we recommend covering in your code of conduct are:
Customer service standards: Every business should have a basic expectation for employees to provide good customer or client service. Having written standards will help define the level of service a customer can expect (e.g. receiving the correct order within 5 days) and remind management and employees what their obligations are when interacting with customers (e.g. treating customers with courtesy and respect).
Equal opportunities: Equal employment opportunities (EEO) is about creating a workplace that values diversity and enables all workers to contribute to their full potential. While there is no legislation in Australia requiring private companies to implement EEO, it is unlawful to discriminate against an employee (or potential employee) on certain, specified grounds, e.g. gender, age, disability, sexual orientation, race, religion, political beliefs. Putting equal opportunities in writing helps create a fair workplace environment and lets people know that basic human rights are non negotiable.
IT and device use: Having a clearly written information technology (IT) usage policy is a good way to set ground rules for what staff can and can’t do on and with technology in the workplace. Your company could be held responsible for the actions of employees on your network, so having IT usage standards can help minimise the risks and potential costs. Make sure you regularly review and update the policy. Technology is changing rapidly and the way we work changes with it, so you’ll need to keep adapting to ensure your business data and IT systems are safe and secure.
Expense claims management: If your people have some authority to spend company money in the course of doing their job, it is critical - both for tax and financial conduct purposes - to have clearly established rules and processes for managing expense claims. Your expense claims policy should inform employees of their entitlements for reimbursement, any rates and conditions, and the process for claiming expenses. A good expenses policy can simplify expense management, making it easier (and faster) for your finance team to assess and resolve expense claims, while improving employees’ compliance.
Many small and medium-sized companies find it can be a challenge to make sure all their employment contracts and other documentation are in order and legally sound. Everyone is so busy focusing on the day-to-day business, doing what needs doing, that crossing the Ts and dotting the Is can get delayed. When leading website design agency, Zyber, signed up with MyHR in 2013, the comprehensive HR health check that comes as part of the MyHR set-up process gave them peace of mind. Zyber co-founder James Sampson says reviewing all their company documentation was a job they knew needed doing, but tackling it seemed like a lot of work and it was often put off.
“MyHR implementation deals with it,” he says. “The MyHR health check took care of all company documentation, providing comprehensive recommendations on employment contracts, policies, job descriptions, and performance reviews.” - James Sampson Co-founder - ZYBER, Vyne Digital, FileInvite
He says it gave them certainty that the business is fully up-to-date with all current employment and WHS laws, and that their policies and contracts are in line with the company’s values.
“We have total peace of mind that all of our HR is in order.”
Sampson was so impressed with MyHR, when he co-founded another two start-up companies - the digital marketing agency VYNE Digital and FileInvite, a file request and collection software company - he signed them straight up to MyHR as well. He says while the main priority with Zyber was retrofitting to make sure they were compliant with legislation; for the start-ups, it was all about getting things right up front so they are ready to grow. “Obviously, as tech companies, we really want a tech solution,” he says. “Old school, clunky HR services really don’t cut it. But equally, a pure tech solution with no human interface was not going to be enough.”
James says MyHR’s combination of easy-touse software and real human support made the most sense. “It really is like having your own HR department or consultant on tap, without the cost.”
Along with the comprehensive benefits of the HR health check, getting started with MyHR is a breeze. “They take care of the software set-up, configuration, and payroll interface, and all users are trained,” says James. James says his businesses pride themselves on looking after their people and MyHR support the proactive approach the three companies take to keeping their employees engaged and providing cool work environments. Just as importantly, he says MyHR really nail the compliance stuff, which is invaluable for tech companies that are often raising capital and subject to a lot of scrutiny.
“They write our employment contracts and policies, make sure everything is up-to-date with the law, while lining up with our different company needs and cultures.”
MyHR makes hiring new team members and getting them set up in the company’s account really easy. James says the intuitive software forms and time-saving features such as the job description database, manager selection, and department allocation help speed up the process. The MyHR software builds every new employment contract while the team at MyHR review it to check for any issues. “That’s when the magic really happens,” James says. “They look for compliance with employment law and consistency with our own policies, and [if there are] any issues, I just get a call.”
For James, knowing there’s a real HR professional on the other end adds a whole layer of certainty that they wouldn’t get if they were using a software template service. “I never have to type another contract or wrestle with a template and worry if I’ve got the law right.” The finished contract document, complete with company logo, is loaded into the account with the offer letter and job description, and James receives an email alert. He signs online and the new employee gets an alert and can log-in to their own account and sign. “It makes hiring a breeze, it saves us a tonne of time, and we don’t have to worry about compliance. Our new staff really love it because it’s seamless, slick, and it’s all digital.”
All staff data, including employment contracts, is stored securely in the My People area of the MyHR account, which is designed for a quick, easy view of current team members. Similarly, the My Business area stores all company files, with only relevant, current documents visible.
James says this has replaced the awful, messy shared drives they had used in the past. “Each area provides a bunch of quick links allowing us to take any action from those main screens without spending ages trying to navigate the software.”
James says using MyHR has been one of the best things they have done in all three businesses. “It just takes care of everything, and takes care of the people, so you can really focus on the business.” MyHR provides great value for money and James loves the fact they get unlimited service for a single fee, with no lock-in contracts.
“That’s why I’ve signed up three companies. MyHR just make it easy.”
Watch the full Zyber case study clip here: https://www.myhr.works/nz/customer-stories/zyber
