Employment contracts for startups

How are your employment contracts looking?

Like with many startups, employment contracts are not always "top of mind". However, these are important documents, especially if you are planning on growing, seeking investment/funding or are applying for grants.

You want to make sure that everything is "in writing" even for staff that you may have employed a while ago.

A generic contract template is not always going to be suitable for a startup. For example, web developers working for a digital startup are generally covered by a specific industry award. Also, there are specific issues that are particularly relevant to digital startups, including ownership of intellectual property, poaching of staff (by ex-staff), conflict of interest and non-compete restrictions.

The employment contract should accurately reflect the mutual expectations of the employer and employee, to ensure that there are no potential misunderstandings or disputes in the future.

The contract should always be compliant with the Fair Work Act in Australia.

 

Have you covered the following issues?

Professional Employees Award 2010

The web developers in your startup are likely to be covered by the Professional Employees Award 2010. An employment contract issued to any of these staff members should accurately reflect the terms of this award.

IP ownership

As a startup, your staff will be creating intellectual property as part of their employment. You should ensure that there are no disagreements about who the rightful owner of the IP is.

Non-compete

The nature of a startup is that staff do turn over. Whilst sometimes difficult to enforce, make sure that the employment contract contains a strong non-compete clause to restrict competitive behaviour by relevant ex-employees.

Non-solicitation

Protect your startup by preventing ex-employees from poaching your existing staff or enticing them to leave. This is an important industry issue that you should be on top of.

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