An ESOP (Employee Share Option Plan) is a scheme that gives employees the right to acquire shares in the company, usually at a discounted price and subject to vesting conditions. It's one of the most effective tools startups have to attract and retain talent when they can't compete on salary alone.

What's the difference between a contractor and an employee?

The distinction depends on the substance of the working relationship, not what the contract says. Key factors include the degree of control, whether the worker can delegate, who provides tools and equipment, and whether the worker bears financial risk. Misclassifying an employee as a contractor can result in back-payment of entitlements, superannuation, and penalties.

Can I include a restraint of trade in an employment contract?

Yes, but it must be reasonable in scope, duration, and geographic area to be enforceable. Australian courts will not enforce restraints that go further than reasonably necessary to protect the employer's legitimate business interests. Cascading restraint clauses — with progressively narrower fallbacks — are common practice.

What is the startup concession for employee share schemes?

The startup concession under Division 83A of the Income Tax Assessment Act allows eligible startups to issue options or shares to employees with deferred taxation — meaning employees don't pay tax until they actually sell the shares. The company must have been incorporated for less than 10 years, have turnover under $50 million, and not be listed on a stock exchange.

Employment Lawyers for Startups, Sydney

Your first bad hire will teach you more about employment law than you wanted to know

Employment law in Australia is heavily regulated, and the Fair Work Act doesn’t care that you’re a startup with five people and no HR department. The penalties for getting it wrong are significant — and the disputes are distracting at exactly the time you can least afford them.

We advise startups and growing businesses on employment law with a practical focus: what do you actually need to do, and what can wait?

ESOPs — your most powerful hiring tool

Employee share option plans are how startups compete with big-company salaries. But the tax treatment is complex, and getting it wrong can mean your employees face a tax bill on shares they can’t sell. We design and implement ESOP plans that take advantage of the startup concession under Division 83A, with proper vesting schedules and clear plan rules. We’ve also written about the new Australian employee share scheme reforms that have made this significantly more accessible for early-stage companies.

Contractor vs employee — the distinction that matters most

Misclassifying an employee as a contractor is one of the most common and most expensive mistakes We see. The consequences include back-payment of entitlements, superannuation, payroll tax, and potential penalties. The test isn’t based on what you call the relationship — it’s based on the substance of how the person works. We help you get the classification right and structure your arrangements accordingly.

Employment contracts that actually protect you

A compliant employment contract covers the National Employment Standards and any applicable modern award. But for startups, the commercial protections matter just as much: IP assignment, confidentiality, restraint of trade, and probation provisions. We draft contracts that handle both sides.

Performance management and termination

When someone isn’t working out, you need to follow a fair process — performance improvement plans, formal warnings, documented conversations. Skipping steps is how you end up in the Fair Work Commission defending an unfair dismissal claim. We advise on the process and, when termination is the right outcome, handle the documentation: termination letters, entitlement calculations, and deeds of release.

Workplace policies

As you grow past 10-15 people, you need written policies — code of conduct, flexible work, leave, anti-discrimination, and harassment. These set expectations, create consistency, and protect you if things go wrong. We draft these scaled to your stage, not copied from a 500-person company.

If you’re hiring, managing, or parting ways with someone and want to make sure you’re doing it properly, let’s talk.