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Simon Obee from Employment Innovations discusses free downloadable employment contract templates available for Australian businesses. These templates cater to full-time, part-time, and casual employees. Having an employment contract is crucial as it clarifies the terms of employment, such as employment type (permanent or casual), work hours, overtime pay, notice periods for termination, and award coverage and classification. Additionally, employers are required to provide written information regarding modern award coverage. Without an employment contract, these important aspects may remain unclear, potentially leading to disputes or misunderstandings.