In the constantly changing compliance environment it is important, even in established, sophisticated businesses, to take some time out occasionally to review the business systems and approaches to ensure that they reflect best practice and are appropriate for the business size, style and operation. It is staggering how quickly a business can outgrow a process that used to work for them, or how quickly a small change that is missed can lead to large issues later on. This Employment 101 Series is all about going Back to Basics – ensuring that the simple systems and requirements are understood and operational, so that we can build on them and focus on the growth of the business.
Getting the basics right is important, especially when it comes to ensuring that all parties are on the same page. This instalment will explore an often overlooked or misunderstood part of the process, the Letter of Offer (contract of employment, offer of employment etc), and why its worth the time and effort to draft them correctly, communicate them along with the other key starter documents and ensure that they reflect the shared understanding before the employee starts.
It is imperative that when commencing a new employment relationship that the business clearly articulate not only its understanding of the employment relationship but also the expectations of the business in terms of performance is imperative to a functional employment engagement. This week’s HR Highlight will focus on getting the Letter of Offer and pre-engagement right and why every business should take the time to get them right.
Setting the scene
The Letter of Offer does more than formally offer the candidate a role. It clearly articulates the conditions of employment, the industrial instrument that the candidate is to be engaged under and the probationary periods.
A good Letter of Offer goes further than this, however, it also articulates the businesses expectations and commitments to the candidate and forms the basis for the quick and efficient on boarding of new staff.
What to include
The offering of a role to a candidate is an opportunity to put it all on the table. Letter of Offers should include as much information as possible to assist the candidate to understand their employment engagement and the expectations of the business in terms of behaviour and performance.
A Letter of Offer should communicate:
• The position that the candidate is being offered
• The business that will employ them
• The primary location that the candidate will be engaged at
• The capacity the candidate is being employed under (permanent, part time, casual)
• The employment instrument the candidate will be engaged under (the Award)
• The Guaranteed Hours agreed by the employee and the business (and the fact that those hours will be zero for a casual employee)
• The terms and conditions of the candidates employment and any probationary periods that are to apply
• Any additional employment conditions that have been negotiated
• The person to contact if they require information or assistance
• The Letter of Offer should also be accompanied by supporting information:
• Any key business policies
• A copy of the position description
• The new staff member complete a Tax File Declaration Form, New Employee Form (for payment details, next of kin etc)
• The Fair Work Information Statement (they get to keep a copy but it is not a bad idea to have them sign a copy for you to keep too)
The Letter of Offer should outline the inclusion of the additional documents within the body of the document. It should also include a section for the candidate to sign their acceptance of the position as outlined in the Letter of Offer. A copy of the Letter of Offer should be kept by the staff member and kept on file by the business.
Things to note as roles change
The nature of the employment relationship and the role of certain staff members changes over time.
As the Letter of Offer forms a key basis for the formal employment relationship it is important that as changes occur they are reflected in a formal document that adds to the Letter of Offer.
This document, Letter of Engagement, should note the date from which changes to the conditions take effect. In terms of content the Letter of Engagement should include all of the content of the Letter of Offer and supporting documents.
Why its important
While there is no legal requirement for a Letter of Offer or engagement document that stipulates all of these items, there are requirements to provide or communicate all of the information that a good Letter of Offer contains and to be able to demonstrate that this communication has happened.
Many of the issues that are played out during and after employment come down to differing interpretations around the agreements and expectations around the employment relationship. A clear Letter of Offer, followed by consistent updates and confirmations in writing when changes occur, such as changes to hours, positions, pay rates etc. Clear communication avoids and addresses confusion and issues, and in the event of dispute lends weight to the businesses interpretations.
More From This Series
Employment Compliance 101:
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HR Highlights are things to consider, implement and watch out for in your business.
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Elisha Radwanowski BCom(HRM&IR)