Employment Lawyers for Australian Executives

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19th November 2017
Melbourne & Sydney time: 8:24 am

Call 1300 789 302

19th November 2017 Melbourne & Sydney time: 8:24 am

SELECT AN ARTICLE
  • Fast Facts
  •     How to avoid the 10 most common mistakes made by executives
  •     Employment Contracts
  •     Redundancy Entitlements
  •     Bonus Plans
  •     Wrongful Termination and the Law of Contract
  •     Restraint of Trade Covenants
  •     Deductibility of Legal Expenses
  •     The Fair Work Act 2009 – Unfair Dismissal and Implications for Executives
  • Emergency Checklists
  •     10 things you need to know if you are facing possible wrongful termination
  •     10 Basic rules to follow if you are confronted with a disciplinary meeting
  • Expatriates - Employment Law Issues
  •     Australian employment law and the Fair Work Act 2009
  •     Negotiating an Expatriate Employment Agreement
  • Employment Contract Review


Checklist for Negotiating an Executive Employment Contract

The following checklist is intended as a guide to assist you in the negotiation of the terms and conditions of your executive employment contract.

The employing legal entity

  • Is it an Australian Company?
  • If it is a foreign company, does it have a local Australian operating entity?

Where is the registered office?

  • Does the entity that will employ you have a number of other entities that are “related” to it? (Relevant to restraint covenants)
  • If you are being employed by a subsidiary company, will the holding company guarantee its obligations?
  • Have you asked for a diagrammatic representation of the relationship between all the companies within the Group?

Position title

  • Does the proposed title actually reflect what you will be doing?
  • Does the proposed title accurately reflect your seniority?
  • Does the company unilaterally reserve to itself the right to change your title?
  • What are the reporting lines? Can these be unilaterally changed? (This should be resisted)

The position description

  • Have you been provided with a position description?
  • Does the position description comprehensively define your duties and responsibilities?
  • Does the position description accurately set out key performance indicators?
  • Are these key performance indicators achievable?
  • In the targets that the company is discussing, what assumptions are being made in terms of staff resources and marketing dollars?
  • Have you seen the company’s business and marketing plan?
  • What are to be your powers, responsibilities and duties and under what circumstances can these be varied?

Key Performance Indicators

  • The should conform to the “SMART” principles i.e. Specific, Measured, Agreed, Realistic and Timely.

What is the composition of the remuneration package?

  • Salary
  • Motor vehicle/ Allowance
  • Superannuation
  • Bonus
  • Commission
  • Health-Care Plan
  • Share options
  • With respect to bonus, commission and share options, how are these to operate? Discretionary/non discretionary?
  • Reimbursement of expenses?

Probationary period

  • Is there a probationary clause? [If the employer does not mention it, do not raise this issue]
  • How long is the probationary period for?
  • Can the probationary period be extended?
  • Does the post employment restraint apply during the probationary period?
  • Does the probationary period count for bonus and commission purposes?

Confidential information

  • How is it to be defined?
  • Is there any information that you are bringing into this relationship that needs to be excluded from the definition?
  • Is there any information which the employer seeks to protect that is already in the public domain?

Post employment restraints
(If the employer does not mention these, do not raise this issue)

  • What is the definition of prohibited conduct?
  • What is the geographical area that the prohibition is to cover?
  • What is the timeline that the restraint is to last for?

How does the termination provision operate?

  • How much notice will you receive on termination?
  • What circumstances will trigger termination of the agreement?
  • How much notice must you give the employer to terminate the agreement?
  • Under what circumstances will summary dismissal operate?

Payment in the event of redundancy

You should ask for a severance payout of 2 – 3 weeks for each year of service in circumstances where your position is no longer required to be performed by anybody or is to be divided up amongst existing staff or there is a merger or takeover and you are not offered a comparable position with the new entity. This should be in addition to any notice you receive under the termination provision.

What is to be the governing law of the contract?

This should be in the State where you reside. For expatriate executives, there are additional complications that are not dealt with in this checklist. (See Negotiating an Expatriate Employment Agreement – Golden Rule 1)

Leave Entitlements

[Leave entitlements should be calculated and paid in accordance with the Fair Work Act 2009 and long service leave in accordance with local state legislation]

  • Annual leave?
  • Personal leave?
  • Long service leave?

Company policies?

  • Do any written policies exist? If so, ask to be provided with copies.
  • Are the policies to be incorporated into and form part of the contract of employment? (If a conflict exists between the policy and the contract, the contract should prevail).
  • How frequently are the policies updated?

Prior representations

  • What representations have been made during the course of negotiations that must be included in the contract?
  • Note that there may be a “sole repository clause” in the draft contract that says that the contract is the only document contains the agreement between the parties and that any prior representations are excluded.

Mediation

  • Is the employer prepared to include a mediation clause that either party could resort to prior to the issuing of legal proceedings?

Notices

  • With respect to each party, what address will be used for the serving of notices?

Please note that this checklist is not meant to be exhaustive but rather a starting point for you to develop your own list which reflects your personal situation. 
It is also important to carefully weigh up your position in the negotiating process. Only you will know how far you can take it without talking yourself out of a position.

It is strongly recommended that you seek legal advice to assist you in compiling a checklist which covers the necessary issues relevant to your position.