November 2010

How to guide – completing the contract templates – for ORIC corporations covered by the Western Australian industrial relations system
Store manager
Permanent, Full-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 consider the following points.

•	The template only works for corporations taking on 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 it 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.  
	There are two possibilities here. The first is 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 are in doubt on this issue, 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 second possibility is that although your corporation is not covered by the new federal industrial relations system, it may still be covered by an old federal award.  If it is covered by an old federal award, that award will continue to run until 26 March 2011. After this date it will cease to operate, and your corporation will then become subject to Western Australian state awards. One way to check this is to contact the Commonwealth’s Fair Work Infoline on 13 13 94. Give the Infoline people the details of the employment, and seek their advice about whether an old federal award still applies.  As a general rule, they should be able to advise you on this.
•	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 any form of industrial agreement operating in relation to the corporation. If an industrial agreement 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 the template will almost certainly be wrong.
•	Finally, the templates have been drafted on the basis that a particular Western Australian state award applies to the employment: the Shop and Warehouse (Wholesale & Retail Establishments) State Award 1977 (WA) (the award). You need to make sure this award applies to the employment you propose.
	The Western Australian Department of Commerce website can help you with this – see: 
	http://www.commerce.wa.gov.au/LabourRelations/Content/Employers/Pay_rates_leave_and_conditions/Pay_rates_and_award_summaries.html
	If you need more help, call Wageline in Western Australia on 1300 655 266.
What is in the template?

The template consists of three parts.
1. The first part is the contract of employment.  This part needs to be filled in by the corporation 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 will need to work out how to describe the job and set it out in this attachment.  
3. The third part is Attachment 2 to the contract – a summary of the Western Australian Minimum Conditions of Employment Act 1993 together with a summary of the main terms and conditions set out in the award. Here the corporation needs to make sure that the correct summary is attached – that is, the one that relates to the Shop and Warehouse (Wholesale & Retail Establishments) State Award 1977 (WA), as opposed to another award that does not apply to the employment.
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 for the job 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 three months but it can be longer or shorter, depending on the corporation’s needs. Generally speaking, the more senior the job and the more responsibility it carries, the longer the period of probation. Corporations may want to have a period of six months or even 12 months but any longer than this is unusual. 
•	Once you have decided on a period of probation – for example, three months – put into the contract the end date of the probation (the date of commencement plus three months, minus one day). So if three months of probation began on 17 August 2010, it would end at the end of 
16 November 2010. 
•	Note that if you make the period of probation 12 months, and you terminate the employee’s employment on the very last day of that period, you will need to give the employee two weeks’ notice of termination, not one week’s notice, as is specified in the template. If the employment is terminated with less than one year of service, the employee only needs to be given one week’s notice of termination.
•	Failing to ‘pass’ probation is reasonable grounds for terminating a person’s employment – such as if the employee’s conduct or work performance is not satisfactory. The corporation may wish to specify additional grounds in the contract. 
Clause 5.1: You will need to make sure that the award named here is the correct award for the employment. The template is set up on the basis that the Shop and Warehouse (Wholesale & Retail Establishments) State Award 1977 (WA) applies to the employment. 
Clause 5.1 includes a link to the web page that lists and provides links to the Western Australian State awards, as well as a link to a summary of the Western Australian Minimum Conditions of Employment Act 1993 and a link to the full text of that Act. 
You need to have a copy of the award available in the employee’s workplace.
Clause 5.2 is likely to be the most difficult for the corporation.  For this clause, you will need to work out the classification of the employee in terms of the award that applies, and decide which most closely matches the duties and responsibilities of the position. The corporation will need to specify that classification in the contract. 
As noted earlier, if you need help to work out the right classification, the best place to look is:
http://www.commerce.wa.gov.au/LabourRelations/Content/Employers/Pay_rates_leave_and_conditions/Pay_rates_and_award_summaries.html
If this does not resolve your question you should call Wageline in Western Australia on 1300 655 266.
Next you will need to specify in the contract the pay point within that classification, and the corresponding pay rate in the award. Generally speaking, you would specify the first pay point – the lowest pay point – in the classification. You should get this pay rate figure from an up-to-date version of the award. If you use the electronic link in the contract, it should always take you to the latest version of the award.
You should be aware that the award rate is the minimum you can pay, and that it is likely to be increased once every 12 months. The corporation needs to monitor the award pay rates to make sure it is always paying the right amount to employees. 
Alternatively, the corporation may choose to pay the new employee at a rate which is above the award rate. In order to do this, the corporation will need to specify a higher amount than the award rate which means the corporation will still need to keep an eye on what happens to the wage rates.  It is important to make sure that, as time passes, the pay rate under the contract stays at or above the relevant award rate.
If the corporation is paying at the award rate, there is no need for a salary increase clause. The award takes care of this, although it is still up to the corporation to make sure it is paying the right rate. But if the corporation chooses to pay a rate above the award rate, it would make sense to include a pay increase clause in the contract, along such lines as: ‘The corporation will review the employee’s rate of pay on [insert date] each year, and may increase it from the first pay period after that date.’
Clause 5.3 of the contract says that the employment is permanent – that is, it does not have any specified end date – and that it is full-time.
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 must 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 MCE Act and the award. 

This attachment should be labelled ‘Attachment 2’.

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