The start of a new financial year offers more than a clean slate for your books. It’s also the perfect time for a workplace ‘spring clean’. This isn’t about dusting desks or reorganising filing cabinets. It’s about tightening your HR and legal frameworks to protect your business and position your team for success.
Whether you're a business owner managing a lean team or overseeing a complex organisational structure, a proactive approach now can prevent legal headaches later. Below are practical steps you can take to refresh your HR operations and ensure compliance with evolving laws and standards.
1. Review and update employment contracts
Many businesses rely on outdated or generic employment contracts. While these might cover basic terms like salary and hours, they often fail to protect against real risks that arise in the employment relationship. If your contracts are more than two or three years old, chances are they’re missing key clauses.
Tip #1: Critical clauses every business owner should include in their employment contracts include:
- Performance expectations - Clear job duties and measurable KPIs are essential for performance management or lawful termination;
- Intellectual property - Ensure ownership of any IP created during employment remains with your business;
- Job-specific prerequisites - Especially relevant for roles requiring professional licences or certifications; and
- Restrictive covenants - Use appropriate non-solicitation and non-compete clauses to protect your goodwill after staff leave.
Remember to keep on top of legislative changes, including recently introduced laws prohibiting pay confidentiality clauses and legislating an employee’s ‘right to disconnect’ outside of their usual working hours.
If your employees are subject to a modern award, you should also ensure any existing contracts are updated to reflect changes to the applicable award and ensure new contracts include appropriate award provisions. We discuss modern awards in more detail below.
2. Refresh employee job descriptions
A job description written at the start of employment often becomes outdated within a year. Without revisiting this document, it’s difficult to hold employees accountable or make defensible management decisions.
Tip #2: Use the new financial year as a prompt to:
- Sit down with each employee to discuss role expectations;
- Identify any shifts in responsibilities, skills, or performance metrics; and
- Issue updated job descriptions aligned with business goals.
Well-documented job expectations don’t just aid internal management; they’re also a critical defence in the event of disputes.
Ensure that you record the employee’s agreement and confirmation that they agree to their new or existing job description. It is best to retain a written and signed agreement to this effect.
3. Conduct a workplace policy audit
Your policies are the unsung heroes of your workplace, guiding both culture and compliance. However, they are only useful if they reflect current legislation and internal practices.
Tip #3: Focus on two categories:
- Compliance policies - Review bullying, harassment, work health and safety, and privacy policies to align with any legal updates; and
- Cultural policies - Reinforce the behaviours and systems that make your business unique. For example, how you handle customer service, onboarding, or team communication.
Ask yourself: Have there been any changes to your industry or the way your business operates since your policies were last updated? For example, a new internal practice, a change in expectations of all staff, or perhaps an external regulatory requirement? If so, your policies likely need to be updated.
All employees should have acknowledged and signed an acceptance of your workplace policies. If any updates are made, then you should seek new signed acknowledgements from all employees.
Remember, if there are policies that your employees are required to accept and abide by, it is the business’ responsibility to ensure that the policies are properly enforced and carried out. A failure to do so consistently can make it difficult to rely on your policies for commercial decisions or to defend a claim by an employee later on.
In other words, it is all well and good to have policies in place but if you don’t actively implement and enforce them, it is easy to argue they are not worth the paper they are written on.
4. Get on top of award compliance
As we mentioned above, modern awards change regularly, and failure to keep up can be costly.
Tip #4: Start the year by:
- Checking which awards apply to your employees and that the awards you are relying on are still correct and appropriate;
- Reviewing recent amendments, especially those affecting penalty rates, allowances, or casual conversions; and
- Making adjustments to contracts and payroll practices accordingly.
Failure to keep on top of changes to awards can result in costly headaches, such as the requirement to re-calculate and backpay employees, the loss of business funds in the event of an accidental overpayment or at worst, an underpayment claim by an employee.
5. Explore the strategic use of Individual Flexibility Arrangements (IFAs)
With modern awards becoming increasingly complex, Individual Flexibility Arrangements (IFAs) offer a way to streamline pay structures and attract top talent, especially in industries like hospitality, retail, healthcare, construction, and tech.
An IFA allows you to:
- Offer an employee a higher flat rate in lieu of penalties and allowances;
- Adjust work hours to better match your operational needs; and
- Create tailored arrangements that retain great staff while remaining compliant.
The key is that the employee must always be ‘better off overall’ (sometimes referred to as the ‘BOOT Test’) and the agreement must be in writing and mutually agreed upon.
IFAs need to be carefully drafted to ensure that they comply with legal requirements and to ensure the IFA can be relied upon and upheld if there is ever a challenge as to its validity. We recommend professional legal assistance is sought if you wish to put an IFA in place for an employee.
Final thoughts
A proactive legal and HR review is your best insurance policy for the year ahead. With economic uncertainty, growing compliance demands, and an increasingly mobile workforce, tightening up your employment practices isn’t just a nice-to-have, it’s essential.
