Understanding Contracts of Employment - Dental Graduates

From ADA HR Advisory Service

Landing your first job at the start of your professional career within the dental industry is certainly an exciting time for any new graduate. While this time is often filled with anticipation and enthusiasm, it is important that graduates understand their contractual obligations at the time of confirming their employment, typically via an employment contract. It is important to consider that individuals are often engaged in professional dental roles via either an employment contract or an independent contractor agreement. This article focuses on the provision of employment contracts and key inclusions within. By contrast to employment contracts, independent contractor agreements are commercial in nature and their structure and inclusions differ from a typical employment contract. It is important to note that independent contractors and employees have different rights and obligations as individuals engaged under an independent contractor agreement are not considered to be an employee and operate with a higher degree of autonomy. Graduates who are engaged as an independent contractor should seek independent advice.

Interpreting key clauses 

While written employment contracts are not a legal requirement, they are recommended as a matter of best practice to ensure protection of both the employee and employer. Employment contracts detail the agreement between both parties and include terms and conditions that govern the employment relationship. A written contract is key in mitigating dispute or misunderstanding surrounding the employment relationship and serve as a good reference point if any disagreement about the working relationship should arise. Employment contracts should contain several key clauses:

Award coverage 

Employers must determine the Modern Award that covers employees and explicitly note this within the employment contract. In the case that the employee and their respective role is not covered by a particular Award, the employment contract should specify that the employee is Award-free/ non-Award covered. Practices and their employees are typically covered by the Health Professionals and Support Services Award 2020; however, it is important to note that this Award specifically excludes coverage of Medical Practitioners and includes a list of common Health Professionals covered by the Award. Thus, an individual engaged as a Dentist is not covered by this Award and is deemed to be Award-free.

Identifying Award coverage (or non-Award coverage) is important as it will determine the minimum rate of pay and other conditions and entitlements such as casual conversion requirements, overtime rates, allowances, consultation regarding workplace change requirements and permitted deductions.

Where an employee is Award-free, the National Employment Standards (NES) will apply. Employment contracts must not provide for entitlements less than the legal minimum requirements set out by the NES. This includes the national minimum wage of $21.38 per hour (as of 1 July 2022), among other minimum entitlements including but not limited to annual leave, personal/ carer’s leave, requests for flexible working arrangements, long service leave and notice of termination.

Confidentiality 

Confidentiality clauses are typically included, especially where the employee has access to sensitive and confidential information (such as patient details), or trade secrets. Confidentiality clauses ensure that practices are able to contractually protect information that could potentially be used to damage the reputation of the practice, used by an employee adversely for their own personal gain or profit, breaches regarding privacy of information legislation, or shared with competitors. Confidentiality clauses often also extend to the requirement of employees after employment has concluded.

It is important to read and understand confidentiality clauses to ensure that as an employee, you are not knowingly or unknowingly in breach of any requirement. Breach of confidentiality clauses may result in further action being taken by the practice.

Restraint of trade 

Restraint of trade or non-compete provisions are often included within employment contracts, however, can be difficult to enforce. Restraint clauses may detail limitations on employees to be able to start their own business, poach patients or poach employees of the practice. Restraint clauses may also seek to limit the area in which an employee can seek employment after their engagement has ended (this is typically via a cascading clause which lists several different options/ limitations).

Employees should remain aware of restraint clauses; however, enforceability of such clauses is ultimately a decision for a court or tribunal.

Set-off clause

Set-off clauses are most commonly found where an employee is paid above-Award rates, or for salaried employees. A set-off clause allows the employer to offset any payment made above the minimum requirements against any alleged underpayments of wages. Set-off clauses are typically included where the rate of pay provided to an employee is designed to be all-inclusive, hence leaving the employee better off overall. Such clauses often specify which entitlements that the rate of pay is designed to encompass.

Probationary period 

Stipulation of a probation period is common within employment contracts and typically spans anywhere from 3-12 months. Probation periods are designed for the employer to be able to assess the employee’s suitability for the role during the specified duration.

It should be noted that a probation period is separate and distinct from the minimum employment period as dictated by the Fair Work Act 2009 (Cth). The minimum employment period is either six or twelve months depending on whether the practice is a large business (more than 15 employees) or a small business (less than 15 employees), respectively. Once an employee meets the minimum employment period, they are able to make an unfair dismissal application to challenge the termination of their employment.

It should be noted that many practices choose to set a probation period equal to the relevant minimum employment period. As a matter of best practice, employment contracts should not stipulate a probation period that is longer than the qualifying minimum employment period.

Notice periods 

Employment contracts should detail notice requirements upon an employee’s resignation, or termination of employment. Typically, notice periods will mirror those set out by the Fair Work Ombudsman as bellow:

An employee will get an extra week of notice if they are over 45 years of age and have worked for the employer for at least 2 years.

In some cases, employers may require a longer notice period. To be enforceable, a longer notice period would need to be set out in the employment contract. Employment contracts should not prescribe notice periods that are less than the minimum requirements set out above.

Discuss, negotiate, and seek an expert opinion

In any case that there is something unclear within an employment contract, or a clause in which you wish to negotiate, you are encouraged to do so before signing the employment contract. Should you require a second opinion, further advice, or there are additional clauses included within the contract not discussed within this article, you are encouraged to contact the Telephone Advisory Service.

For more information on this article please call the ADA HR Advisory Service on 1300 232 462.