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MSI - Employer contractBy Rodney Commins, Patterson Houen & Commins, Lawyers, Sydney.

There has been a much gnashing of teeth, angst and discussion in recent times about the binding nature of employer workplace policies.

It is critical for an employer to consider whether or not it wishes its policies to be contractually binding on both itself and its employees or whether they are to be “non contractual” but reasonable directives as far as the employer is concerned so as not to generate contractual rights in the hands of the employee.

That means it is vital that the terms of any clause in an employment agreement dealing with workplace policies be carefully drafted as ABM Amro learned to its cost in a recent New South Wales Supreme Court decision which awarded its former CEO nearly $3,000,000.00 in redundancy payments. Applying objective construction principles, the Court determined that the language used in the employment contract in relation to the Bank’s redundancy policy was binding on both the employer and the employee.

The take out for employers is that they must carefully review their employment contracts and policies so that they accurately reflect the employer’s intention.

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