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Simon Obee from Employment Innovations discusses free downloadable employment contract templates available for businesses in Australia. These templates cover full-time, part-time, and casual employees. Having an employment contract is crucial as it clarifies the terms and conditions of employment, such as the employee's status, working hours, entitlements for extra pay, notice periods for termination, and award coverage details. Employers are required to provide information about award coverage in writing. Establishing these elements in a contract helps ensure clarity and compliance in the employer-employee relationship.