When it comes to setting up your employment documents, one common mistake we see is overloading the employment contract with information that really belongs in a workplace policy.
Yes, it’s tempting to include everything in the contract, after all, you want your expectations to be crystal clear. But putting too much detail into the contract can backfire legally and operationally.
Here’s why keeping your contracts clean and using policies for procedural detail is not only best practice, but also makes life much easier for everyone involved.
Contracts Are Legal Agreements, And They’re Hard to Change
An employment contract is a legally binding agreement between the employer and employee. It sets out the fundamental terms of the employment relationship like position, pay, hours, leave entitlements, termination clauses, and any specific legal obligations (such as confidentiality).
Once both parties sign a contract, you can’t change it without mutual consent. That means if you’ve included overly detailed clauses like specific procedures for remote work, disciplinary steps, or how performance reviews are conducted you could lock yourself into processes that are hard to adapt later.
Even something as simple as tweaking your work-from-home expectations might become a negotiation.
Policies Are Meant to Be Flexible
Workplace policies are internal documents that outline how things are done in practice, your procedures, expectations, and standards. These can (and should) cover things like:
The beauty of policies? They can be updated without needing employee agreement, as long as changes are lawful and reasonable. That gives you the flexibility to respond to changes in your business, industry, or legislation without renegotiating everyone’s contracts.
Mixing Contractual and Policy Content = Legal Risk
Including policy-like clauses in a contract can have unintended consequences:
In short: the more you put in the contract, the more risk you take on.
Pro Tip for Employers
Make sure your letter of offer or contract refers to your policies, without incorporating them as part of the contract. For example:
“Your employment is subject to the Company’s policies and procedures as varied from time to time. These do not form part of your employment contract.”
This gives you room to evolve your policies as your business grows, without reissuing contracts every time you adjust the detail.
In Summary
Need help reviewing your contracts and policies? We can help you set it up right, from templates to tailored advice.