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Employers are operating under some common misconceptions about contracts that could land them in legal trouble, a lawyer warns.

Recent court rulings, along with Labor's proposed changes to workplace legislation, make this a critical area to get right, Squire Patton Boggs partner Nicola Martin tells HR Daily.

One case involved Spotless Services Australia, which terminated the employment of three workers after it lost a long-running contract. It failed to pay them redundancy entitlements, and when challenged by the Fair Work Ombudsman argued it had relied on the 'ordinary turnover of labour exception' under section 119(1)(a) of the Fair Work Act...