Drafting executive contracts

Authored by the LexisNexis Legal Writer team.

What should I keep in mind when drafting employment contracts for executive employees?

Pre-employment discussions

Discussions between the employer (or recruiter) and candidates during the recruitment process will usually cover matters such as the terms and conditions of employment, remuneration, discretionary payments such as bonuses promotion opportunities and security of employment.

Interview notes taken during the course of an interview of an unsuccessful candidate can be requested by the candidate or discoverable in the event of litigation. Care needs to be taken that there are no unlawful or discriminatory refences or comments are made about the candidate.

Pre-contractual statements that are knowingly or recklessly false and misleading are actionable under the s 18 of the Competition and Consumer Act 2010 (Cth). Employers should be careful not to make any unrealistic promises about future matters pertaining to the employment relationship.

Representations made during pre-employment discussions may also be found to constitute terms of the employment contract. If the contract is scant on detail, the courts may be more willing to have regard to pre-employment negotiations, along with industry custom or practice, or the contents of extraneous materials to fill the gap.

An employment contract which is comprehensive and covers all relevant aspects of the employment relationship will minimise the risk of disputes arising as to its terms.