The Top 3 Red Flags in Employment Contracts That Employees Often Miss

Written By Jessica Rossi

You’ve landed the job and your contract has arrived. Most people check the position title and salary, skim the rest, and sign.

But employment contracts are legally binding — and some of the most important clauses are easy to miss. Over time, these can affect your career options, income, and rights.

Here are three red flags employees often overlook.

 

1. Post-employment clauses

These are often called restraint or non-compete clauses. They can limit where you work, who you work for, or whether you can start your own business after you leave.

Red flags include:

  • broad geographic restrictions

  • restraints covering an entire industry

  • clauses that stop you using your existing skills gained over your career

While employers can protect legitimate business interests, restraints should be reasonable and role specific. Whether they’re enforceable depends heavily on how they’re drafted — not just that they exist.

 

2. Unfair or one-sided termination clauses

Termination clauses explain how your employment can end, including notice periods.

Many employees assume notice works both ways — it often doesn’t.

Watch out for:

  • long notice periods required from you, but shorter notice from the employer

  • vague termination rights favouring the employer

  • contracts that don’t meet the Fair Work National Employment Standards (NES) minimum notice

For example, employees over 45 with sufficient service may be entitled to extra notice, even if the contract says otherwise. Probation clauses stating “no notice” may also be non-compliant.

 

3. Clauses allowing deductions from wages

Some contracts say an employer can deduct money from your wages if you “owe” the business money.

In most cases, this isn’t lawful without specific written consent, including the exact amount to be deducted. A general clause in a contract is usually not enough.

Any wage deduction clause should be tightly limited to what’s permitted by law.

 

A simple rule of thumb

If the contract gives most flexibility to the employer — and most risk to you — pause and take a closer look.

 

Before you sign

A contract doesn’t have to be “bad” to be risky. Often, it’s the wording that matters.

If you’d like clarity before signing (or resigning), a one-off employment contract review can help you understand your position and options in plain English — no jargon, no ongoing commitment.

Contact HR Review today.

Jessica Rossi