Employment law myth No. 3: “Oral contract? It’s not worth the paper it’s written on!”
There is no general requirement for employees to be given a written contract. That is not to say it is not strongly advisable to have one in place, not least because there will be less room to argue about the terms of the employment in the future.
It is important to note that oral contracts – such as a verbal agreement as to how much an employee will be paid, or their duties whilst at work – can be binding at law. So too can contractual terms that are “implied” through a course of conduct. Issues frequently arise where an employee is consistently given a benefit over a period of time and then the employer wishes to remove or alter the terms of the benefit at a later date (for example, to a bonus or to a company car). Without a written contract specifying the terms under which the employer is entitled to do so, the potential for a dispute will always be there.
It should also be noted that generally Awards require employers to put in writing, particular details about the terms under which employees are engaged, for example, what their Award classification is and in the case of part time employees, the hours they are to be engaged for.