A question REEF CEO Bryan Wilcox is often asked with whether workplace policies should be included in employment contracts. Here, he explains why it’s not recommended.
The Federal Court of Australia decision in Nikolich v Goldman Sachs JBWere Service Pty Limited in 2006 sounded a warning to employers about this practice.
So why is incorporating workplace policies into employment contracts a bad thing? Because there’s the risk an employee could sue their employer for breach of contract if the employer fails to comply with their own policies.
In the Nikolich decision, the employee complained about their manager. The Federal Court found that the employer had failed to comply with its own HR policies regarding workplace health and safety, harassment and grievance procedures. These policies were incorporated into the employee’s employment contract. The employer’s failure to comply with the policies resulted in the complaint being handled in what the court described as an “extremely inept” manner, with the employee suffering depression and ultimately losing their job.
The Federal Court awarded the employee $500,000 in damages for the psychiatric injury and economic loss resulting from the breach of the employment contract.
REEF’s template employment contracts are designed with a view to not incorporate workplace policies.
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If you have any questions about REEF’s template employment contracts or workplace policies, please give us a call on 1300 616 170.
