Articles and Case Studies

Think Before you Sign an Employment Contract

07 Apr 2014

Woman completing paperwork

Starting a new job is exciting, but you should be sure your employment contract protects your interests and does not leave you exposed if things don’t work out. So what should you be looking for before you sign an employment contract?

Do I need an employment contract?

Your new employer seems nice, and just as keen as you are to get you working as soon as possible. You have talked about the role and you are sure you understand each other. Why not just start straight away without bothering with tedious formalities like a written contract?

STOP! An employment contract not only protects your employer, but your interests as well. If things fall apart, you will be relying on your employment contract to protect you. If you haven’t signed a written contract, any dispute becomes a costly game of “he said – she said”. A written employment contract is your best protection when it comes to disputes over employment, including pay and termination.

Read it – yes, the whole thing!

We all know legal contracts can put you to sleep, but you need to know what you are signing up for before you start work. Read the whole document and make sure you understand it. If you have any questions or concerns about the terms of the contract, you should discuss them with your prospective employer.

Indemnity and liabilities

Most contracts for medical services will set out who is responsible for liabilities – in particular, medical indemnity insurance for claims made by patients. Check this section carefully to determine whether the employer will indemnify you, or if you will need insurance cover for the patients you see. If you need additional cover, contact MDA National and we will do our best to arrange this for you.

Breach, termination and penalties

Most contracts will set out the process for terminating the contract, specifying notice periods and any other relevant requirements. Check this section carefully to ensure that if you need to terminate the contract, you know exactly how much notice is required. Some contracts may create penalties for early termination or breach of contract, so make sure you check before you sign.

Restraint of trade

Some contracts contain provisions which restrict where you can work AFTER the contract is terminated. A restraint of trade clause usually relates to a geographic area around the practice, for a specified period of time. Employers often pursue doctors to enforce these restrictions, so be very careful when signing a contract which includes a restraint of trade provision. If you don’t check before you sign, you could be limiting your future ability to work in your chosen area or exposing yourself to potential legal action.

For more information on this subject read our article "How Restrained are You?".

Independent legal advice

If there are parts of your contract that you don’t understand, or you need assistance in negotiating changes to the contract before you sign, seek independent legal advice. While MDA National cannot provide this advice, we can recommend solicitors with appropriate experience in employment law who can advise you at your own expense.

Taking the time to understand your contract before you sign can save you a time-consuming and costly dispute in the future. That way, if your new job doesn’t work out, you can move on with confidence.

Rachel Northcott, Underwriter, MDA National


Employment Essentials, Anaesthesia, Dermatology, Emergency Medicine, General Practice, Intensive Care Medicine, Obstetrics and Gynaecology, Ophthalmology, Pathology, Practice Manager Or Owner, Psychiatry, Radiology, Sports Medicine, Surgery


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