Employer obligations under contracts of employment can derive from the express or implied terms of the contract, and from other sources.

Theoretically, the obligations that the contract can impose upon the employer party is limited only by reference to the requirement that the parties must not contract in a manner that is contrary to public policy, or that is otherwise contrary to law.

In most instances, the express terms of the contract will be of only minor practical significance. This is because key issues such as rates of pay, hours, leave and other entitlements are commonly regulated by either or both of industrial instruments (ie modern awards and statutes). The situation in relation to employers of professional and managerial employees may be rather different, with written contracts making more or less detailed provision in relation to most key aspects of the employment relationship.

For all employers, there are a number of obligations that are commonly regulated primarily by means of terms implied in the contract by operation of law. These include duties imposed upon employers in relation to:

• payment for work performed (see Payment for work performed);

• providing and maintaining a safe work environment (see Duty of care/safe place of work);

• providing references, subject to certain limitations and qualifications (see Employee references).

Traditionally, the common law has proceeded on the assumption that provided it is prepared to pay an employer her or his wages, the employer is not generally obliged to provide work for the employee to perform. This assumption is, however, increasingly coming under question. See Duty to provide work.

It is, of course, open to the parties to make express provision in relation to any of these matters if they so choose. Any such express term will override an otherwise applicable implied term. However, where the parties do so, they need to be aware that the terms of their agreement will operate subject to the common law principles relating to restraint of trade. These principles proceed from the assumption that all contractual provisions that are in restraint of trade are void on grounds of public policy. However, restraints may be upheld if they can be shown to be reasonable in the public interest and in the interests of the parties.