Employers and Employees

March 17, 2016


Why are employers struggling so much to hire “good” employees? Regardless of the economy and regardless of the unemployment rate, Employers should never struggle to find “good” employees. As a matter of fact, employers should be able to find and hire “great” employees. Most employers just don’t understand what it takes to find “great” employees. I know what it takes and the exact reasons why employers struggle. 

Simply put: Employers are terrible at getting people to want to work. When I have the discussion about employers and employees, I usually put most of the blame on the employer. Just for the record, most of the time, employees are not without their share of the blame. 


Let start with a two facts:

  1. Employers hire employees for a certain amount of money and expect a certain amount of work in return.
  2. Employees take jobs with employers and expect to do a certain amount of work and get a certain amount of money in return.

Sound pretty easy, doesn’t it?


In the next two facts, is where the line starts to get fuzzy. Over the course of time the employer/employee relationship starts to change.

  1. The employers have invested their resources up front to train employees, therefore the employers expect employees to get better at their jobs over the course of time, thus becoming more profitable to the company.
  2. Since employees feel they were hired to do a certain amount of work and cost of living keeps going up, employees expect to be paid more and more each year for doing the same amount of work they were originally hired to do.

It is usually at this point where the train comes off of the tracks.

The employer begins to feel that the employee is a pain and no longer has the business’ interests at heart. The employee feels that the employer doesn’t appreciate his loyalty for staying with company and always doing his job.


Here is how both the employer should handle the above differences. During the interview process or early on in the employment process the employer should state “We pay employees $8 per hour for the first 30 days, after that time we pay them what they are worth. If you are doing twice what we expect of you then you will be paid $16 per hour. If you are doing less than is expected you, you will be terminated. Sound Fair?” (If you live in a state where an employee can’t be simply terminated after 30 days you just inform them that they will never receive anything above $8 per hour for below average work. This means no raises, for any reason, ever!)

This simple conversation will save everyone a lot of trouble. It sets the expectations up front for both parties. This conversation will highly discourage a “bad/lazy” employee from taking the job.


Here is how it looks if the shoe is on the other foot, if the employee is trying to figure out if this employer will be a good fit. Prior to taking the job, and perhaps in the second or final interview the employee should ask the following, “How do you determine future pay increases? Are they standard or merit based? Would you be opposed to paying someone twice as much if they were doing the work of two people?”

The employee should expect a little shock and perhaps even a little irritation from the employer at these questions, but the potential employee can follow up by saying “I am not trying to be a pain, but I believe that employees should work as if they own the business. That means doing whatever it takes to make the company better.  I was just wondering how employees that work like that get compensated?”

This simple conversation sets you apart from almost all other potential employees and it will also let you know if this is a place you want to hang your hat. You should be able to tell at this point what your future income potential will be. And whether you like the answers or not, you need to face the truth, before you take the job.


So how does a business with an existing staff make the move to the above scenario? Before we get to that here is a quick example of a business I recently worked with. The business currently had 9 employees who were terrible at their jobs and had never increased the amount of work they could get done on a day in day out basis. The employer spent about $18,000 per year on each of these “bad” employees. 

I asked the employer, “Would you pay 3 people $54,000 per year if they could get the same amount of work done?” It really surprised me when the business owner took several minutes of thinking to come up with his answer “Maybe, it depends?” Are you kidding me? Does this employer really need to think about this? The employer would be getting rid of 6 complaining, show-up late, raise-wanting, insurance-costing, benefit-sucking employees for the ease of 3 people who would work 3 times as hard to make him money.

This is clearly a case of an employer that doesn’t really know what he wants from an employee. Don’t you think that three $54,000 dollar per year employees would be of higher quality than nine minimum wage workers? If you have to think about that answer, you really didn’t understand the question.

So back to the story, I responded to the employer with a polite version of my above rant. The employer agreed that the 3 employees would be a better formula for his business.


Every time I talk about this some employer says something like “That would never work in my business, 3 people could never do the work of 9. My business doesn’t have any measure by which to judge employees and their amount of work.” They are basically all saying “My business is different!”

Sorry to inform you. Your business is not different. You have customers, clients, prospects or patients. You have bills to pay, people to report to or a budget to control. Your business is not different and these techniques and the others I teach can be applied to your business.

Employment Contracts and Your Business

March 17, 2016

It is common practice for employers to enter into agreements with their employees to commence an employer and employee relationship. Agreements are commonly put into writing by the employer incorporating terms, which both the employer and employee mutually agree with at the outset as a standard form or negotiated terms between the parties. Surprisingly there are many employers who enter into verbal agreements with employees and do not finalise the terms of employment into written form, or an employment contract.

Over time a business’ operations and employee’s responsibilities may change, however these changes fail to be incorporated into verbal or written contracts. This often leaves employers and employees exposed to uncertainty and potentially legal exposure.

Written employment contracts allow for the terms of employment to be clear and unambiguous to ensure both parties are aware and understand their responsibilities, duties and obligations under the agreement from the commencement of employment until it is either amended or terminated. These contracts are known as common law employment contracts.

Common law employment contracts are not “industrial instruments” unlike Australian Workplace Agreements (AWAs), Awards and Notional Agreements Preserving State Awards (NAPSAs).

A common law employment contract can operate simultaneously with an AWA, however employers need to bear in mind that common law contracts cannot undercut the terms of an industrial instrument.

If you use common law contracts in your business it is imperative that you ensure all the terms or any relevant industrial instrument are carefully observed.

A restraint of trade clause seeks to impose limitations or restrictions on an employees’ conduct after they leave employment. Restraints of trade clauses are intended to protect an employer’s legitimate business interests and goodwill. There will always be two competing interests, an employees’ freedom to earn a living against the need of an employer to protect its legitimate business interest.

Employers need to bear in mind that restraint of trade clauses will only be valid if they are reasonable under relevant Restraints of Trade Legislation in each state and territory. In New South Wales; what is reasonable under the Restraints of Trade Legislation 1976 (NSW) will depend on factors including:

The subject matter of the restraint.
The time and area of its operation.
The nature of the employer’s business and the industry in which the employer operates.
The relationship of the employee to the employer’s clients and customers.
The nature of the work performed by the employee.

A properly drafted restraint of trade clause in an employment contract for an employee is an effective tool to protect an employer’s legitimate interests and is capable of enforcement where it can be established that an employee deliberately copied customer lists or business records before leaving employment and did so with the intent to compete against their employer. An employee can be restrained from continuing to engage in conduct in breach of their obligations under an employment contract and damages may be awarded to the employer in particular circumstances.

Restraint clauses can be a useful means of protecting legitimate business interests however employers should consider that determining the correct scope and application of valid restraint clauses is often complex and difficult and legal advice should be sought.