November 2010

How to guide – completing the contract templates – for ORIC corporations covered by the Western Australian industrial relations system – not covered by the federal industrial relations system
CEO
Permanent, Full-time or Part-time Employment

Western Australia

This document has been prepared solely for the use of not-for-profit corporations registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act). Its application in any particular case will depend upon the facts of that case. In every case, due care will need to be taken by a corporation registered under the CATSI Act in assessing the suitability of its application. The Australian Government Solicitor and ORIC cannot take any responsibility for this assessment.
This document may only be reproduced or distributed for use in the drafting of a contract for a not-for-profit corporation registered under the CATSI Act. All other rights are reserved.

Before you start to fill in the contract template check the following: 
•	The template only works for corporations employing employees in Western Australia who are covered by the Western Australian industrial relations system. The template will produce the wrong legal outcomes for anywhere other than Western Australia so do not use this template for employment in any other location.
•	This template only works for corporations in Western Australia that are not covered by the federal industrial relations system.  

If your corporation is a trading or financial corporation, it will be covered by the federal industrial relations system (and will not be covered by the Western Australian system). If you have any doubt about this, you should look at the Western Australian Department of Commerce website at:
	http://www.commerce.wa.gov.au/LabourRelations/Content/Employers/About_IR_in_WA/Western_Australian_industrial_.html

If you are still in doubt you should seek legal advice.
•	The template assumes that the employment is permanent – that is, it is not for a fixed period but is meant to continue indefinitely. If the employment is meant to be for a fixed period, a slightly different template will be needed.
•	There are different templates for full-time and part-time employment. Make sure you are using the right one.
•	The template assumes that your corporation does not have an enterprise agreement under the Fair Work Act or an old industrial agreement under the federal Workplace Relations Act (for example, a certified agreement or a collective agreement). If one of those agreements is currently operating in the corporation, and if it applies to the job you are filling, the terms and conditions of employment for the new employee will have to be consistent with the terms of that agreement, and this template will almost certainly be wrong.  
•	The template assumes that the employment will be award-free – that is, not covered by a Western Australian award.
If you are in doubt about this, you should seek legal advice.

What is in the contract template?

The template consists of three parts.
1. The first part is the contract of employment which needs to be filled in at various places, and signed and dated by both the employer and the new employee.
2. The second part is Attachment 1 to the contact – the job description. The corporation needs to decide what goes into the job description at Attachment 1.
3. The third part is Attachment 2 to the contract – a summary of the Western Australian Minimum Conditions of Employment Act 1993 (WA).
Filling in the contract template

Clause 1: you need to fill in the name of your corporation. This is defined in the contract as ‘the Corporation’, so you don’t need to use the specific name of your corporation until you reach the signing page.
The document is just an offer, not a contract, until it is signed.
Clause 2: you need to fill in the commencement date for the employment. This is the date that you expect the employee to begin work.
Clause 3 refers to Attachment 1 as setting out the job description. This describes what the employee will be doing. As noted above, the job description should be completed by the corporation. 
Attachment 1 needs to be labelled ‘Attachment 1’.
Clause 4 of the contract deals with the period of probation. There are a few issues to consider here.  
•	The template sets the period of probation at six months but it can be a longer or shorter, depending on what the corporation’s needs. Generally speaking, the more senior the job and the more responsibility it carries, the longer the period of probation. For a CEO role you may well prefer a period of 12 months, but you would not normally set a period longer than this.
•	Once you have decided on a period of probation – for example, six months – put into the contract the end date of the probation (that is, the date of commencement plus six months, minus one day). So if six months of probation began on 17 May 2010, it would end at the end of 16 November 2010. 
•	If you make the period of probation 12 months, and you want to terminate the employee’s employment on the very last day of that period, you need to give the employee two weeks’ notice of termination, not one week’s notice, as is specified in the template. If you terminate the employee’s employment with less than one year of service, you only need to give one week’s notice of termination.
•	The contract specifies two things that have to be satisfactory for the employee to ‘pass’ their probation. These are the employee’s conduct and their performance. The corporation may wish to specify additional elements of probation in the contract. For example, you may wish to add ‘or attendance’ to the last sentence of this clause. 
Clause 5.1 notes that the employee’s conditions are set by the contract, the Western Australian Minimum Conditions of Employment Act 1993 and other legislation. This clause includes a link to the MCE Act.
Clause 5.2 is where you need to specify the employee’s annual rate of pay.
If the employee is a part-time employee, specify the actual annual rate of pay – the rate based on the part-time hours the employee will be working.
The second sentence of this clause refers to a house and car. This is optional for the corporation to provide – if it does not suit the corporation to provide these items, this sentence should be deleted from the contract. 
Clause 5.3 says that the employment is permanent – that is, it does not have any specified end date – and that it is full-time (or part-time, depending on which template you have).
Clause 5.4: This clause only needs to be completed if the employee will be working part-time, in which case you will need to specify the employee’s ordinary hours of work per week. The number of hours must be less than 38 hours. You must also specify the employee’s pattern of hours on each of their working days.
The signing page of the contract: Affix the Common Seal of the corporation to the contract in the presence of two authorised officers of the corporation who will sign the contract. If the corporation does not have a Common Seal – some do not – you can use the second form of words supplied in the template. Either way, one of the two forms of words needs to be deleted.
The contract needs to be signed by the new employee and by a witness to the employee’s signature. This does not all have to happen at the same time – each side can do its part separately.
Attachment 1 to the contract is the job description. This is discussed above in the notes to clause 3.
This attachment should be labelled ‘Attachment 1’.
Attachment 2 to the contract is the summary of the Western Australian Minimum Conditions of Employment Act 1993.   
This attachment should be labelled ‘Attachment 2’.

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