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  • Connect

    Issue 16

  • Business of medicine


    Contract conundrums

    Sonya Black

    Sonya Black

    LLB (Hons), B.Com

    Special Counsel – Employment Law

    Avant Law
    Contract conundrums main image

    Practices often find the situation tricky when an employee refuses to sign an updated employment contract. So how do you handle these situations, to get everyone on board?

    Employers can find these situations challenging as there will often be legitimate business reasons to amend or update employment contracts.

    Picture a scenario of a practice manager checking employment documentation and realising there is no record of existing employees ever signing confidentiality agreements. After preparing a simple agreement for employees to sign, which will form part of the employment contract, one person refuses.

    Can you force an employee to sign?

    A signed employment contract is the best way to:

    • ensure the employee is aware of their obligations
    • take disciplinary action if an employee fails to uphold their obligations
    • defend the employer’s actions if an employee breaches their obligations.

    An employee’s signature indicates the employee has read, understood and accepts the terms of the contract.

    An employer cannot force an employee to sign a new contract.

    Overcoming their reluctance

    How you go about updating or amending employment contracts is likely to have a significant impact on how employees respond. Provide context on why employees need to sign the contract and be mindful of how and when they are being asked to sign, as it could impact their response.

    Amending or updating contracts with existing staff can be difficult, especially if the objective is to protect or benefit the business, without evident benefit to the employee. So, ensure all employees understand what the practice is hoping to achieve by asking them to sign the contract.

    Organise a meeting with any reluctant employees to explore their concerns and avoid giving an impression of pressure to sign. If the situation is handled carefully, you can usually overcome an employee’s reluctance.

    The legalities

    Legally, a binding contract requires offer, acceptance and consideration (e.g. remuneration). Therefore, remuneration reviews could be a good time to discuss contract amendments as additional benefits can provide a reason for the employee to accept.

    New employment contracts should state employees must comply with policies and procedures, and that these policies and procedures are not contractual terms and may be updated occasionally.

    Let employees know when policies are changing, but also reiterate that it is their responsibility to stay up to date with changes.

    Still refusing to sign

    If the employee still refuses to sign the amended contract, take care before terminating the employee’s employment, as the practice could be exposed to unfair dismissal and other legal claims.

    To protect the practice, assess how much risk the lack of a signed contract is and consider other ways to manage the risks in the future. It’s a good idea to remind all employees they have obligations, including those regarding confidentiality and privacy under the general law.

    The practice should check practice policies are up to date and accessible, and communicate any changes to all staff.

    Finally, seek advice from an employment law expert if you are still unable to resolve the issues.

    Key lessons

    • Take care when amending employment contracts as employees cannot be forced to sign.
    • Understand why employees are reluctant to sign.
    • Standardise contracts with a clause requiring adherence to policies and procedures, which can be amended without needing employees to re-sign.
    • Assess any risks to the practice if employment agreements are not signed.

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    Avant Practice Medical Indemnity Insurance is issued by Avant Insurance Limited. Please read the PDS, available at avant.org.au

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