Most people spend more time reading a restaurant menu than their employment contract. You get a PDF, a deadline, and the quiet assumption that it's all pretty standard. But standard doesn't mean fair — and it definitely doesn't mean legal.

Here are five clauses that regularly slip past Australian employees unsigned and unread.

1. The Restraint of Trade (Non-Compete) Clause

This one tells you where you can and can't work after you leave. It sounds serious. It's often not — but you'd never know that from the wording.

Many restraint of trade clauses in Australian employment contracts are written so broadly they'd be unenforceable if challenged. Courts generally won't uphold restrictions that go beyond what's reasonably necessary to protect a legitimate business interest. That means a clause banning you from working in your industry for two years across all of Australia may be worth very little — but it can still scare you into turning down your next job offer.

The Fair Work Ombudsman doesn't regulate restraint clauses directly, but Australian common law has a long history of striking them down when they're unreasonable.

What to check: How long does the restriction last? What geography does it cover? Does it name specific competitors, or does it sweep up the entire industry?

2. The IP Assignment Clause

You build something on a Sunday afternoon, on your own laptop, with zero connection to your job. Under a poorly drafted IP assignment clause, your employer might own it.

Broad intellectual property clauses often assign ownership of anything you create "in connection with your employment" — a phrase vague enough to swallow side projects, freelance work, and personal creative output whole. Some contracts go further and capture anything created during the term of employment, full stop.

This is one of the most underread clauses in Australian employment contracts, and one of the most consequential for anyone who creates anything outside of work hours.

What to check: Does the clause cover work created on personal time? Is there a carve-out for pre-existing IP or work unrelated to your role?

3. The Termination Without Cause Clause

Your contract might allow your employer to end your employment with nothing more than the minimum notice period — no reason required.

This is legal under Australian employment law in many circumstances, but it surprises people who assumed their contract offered more protection. The National Employment Standards (NES) set minimum notice periods based on length of service, but a contract can give you more — it just rarely does unless you ask.

What catches people out is the probation period provision nested inside this clause. During probation, the notice requirements are often much shorter, and unfair dismissal protections under the Fair Work Act 2009 generally don't apply until you've completed the minimum employment period.

What to check: What's the notice period during probation vs after? Does the contract say anything beyond the legal minimum?

4. The Salary Set-Off Clause

Your contract says you're on a salary that "covers all entitlements." Sounds clean. It might not be.

Set-off clauses allow employers to use your base salary to "offset" entitlements like overtime, penalty rates, or allowances under a Modern Award. In 2025, the Federal Court handed down a landmark ruling — the Woolworths case — confirming that set-off clauses cannot pool or average entitlements across different pay periods. Employers must pay all award entitlements within each pay period.

If your contract contains vague set-off language, it's worth understanding whether a Modern Award applies to your role — and if so, whether your salary genuinely covers what you're owed.

What to check: Does your contract reference a Modern Award? Does it include a set-off clause? Is your salary clearly above the award rate for your classification?

5. The Variation Clause

This one is easy to miss because it sounds administrative. It usually says something like: "The employer may vary the terms of this agreement by providing reasonable notice."

In plain English: your employer can change your job. Your hours. Your location. Your duties. Sometimes with nothing more than a written notice. Whether that's enforceable depends on how the clause is drafted and what Australian employment law says about unilateral contract variations — but many employees don't realise the clause is even there until something changes.

What to check: What can actually be varied? Is there a consultation requirement? Does "reasonable notice" have any definition, or is it left open?

So What Should You Do Before You Sign?

Read it. All of it — not just the salary and start date.

If something looks unusual, check it against your rights under the Fair Work Act 2009. The Fair Work Ombudsman publishes plain-English guides on what the law requires, and they're worth bookmarking.

If you want a faster way to spot what's worth questioning, Contractam analyses Australian employment contracts clause by clause — scoring each one for legal compliance, fairness, and clarity, and flagging the issues that actually matter. Your first analysis is free.

You don't need to become an employment lawyer before accepting a job offer. You just need to know what you're agreeing to.

If you believe a clause in your contract may be unlawful — or if you're unsure about your rights as an employee — the Fair Work Ombudsman is a free resource available to all Australian workers. You can get information, lodge a complaint, or request assistance directly at www.fairwork.gov.au.

This article is general information only and does not constitute legal advice. For matters specific to your situation, seek advice from a qualified Australian employment lawyer or contact the Fair Work Ombudsman.