29/05/2026
Watch what you are signing up to.
I wanted to share a quick caution after recently seeing an agreement with an HR firm that some preschools have signed in NSW.
I am not naming the firm, and this is not legal advice. But I do think it is worth giving directors and committees a friendly heads-up, because some of the clauses in the agreement may have consequences that are not obvious when you are just trying to get HR support in place.
The agreement I saw was for a monthly HR retainer. On the surface, it looked simple enough: a monthly fee, access to HR advice, and support when needed. But when I read the detail, there were a few things that concerned me.
Before signing any HR retainer agreement, please check whether it includes clauses like these:
• Direct debit authority for more than the monthly fee
Some agreements authorise the provider, through a payment platform, to debit the service’s bank account for amounts that are ‘separately communicated’ to you. That may sound harmless, but it could mean the authority is not limited to the ordinary monthly retainer. If there is ever a disagreement about extra charges, the practical risk is that the money may be taken first and disputed later. (A direct credit is when the service chooses to send money to someone else – for example, by making a bank transfer or paying an invoice. The preschool controls when the payment is made and how much is paid. A direct debit is different. It gives another organisation permission to take money from the preschool’s bank account, usually on agreed dates or for agreed amounts. This can be convenient, but it also means the service has handed over some control. If the agreement is broadly worded, the provider may be able to debit amounts beyond the regular monthly fee, leaving the serviceto notice, question and dispute the payment afterwards.)
• Extra fees for work outside the retainer
Check very carefully what is actually included in the monthly fee. Some agreements say that additional services will be charged separately, often at an hourly rate. This may include things like workplace investigations, Fair Work matters, training, onsite visits, or anything considered outside ‘reasonable use’.
• Fixed 12-month terms
Some agreements are not month-to-month, even if they are paid monthly. They may lock the preschool in for a full 12 months.
• Automatic renewal for another 12 months
Watch for clauses that renew the agreement automatically unless you give notice a few months in advance. This can mean a service accidentally rolls into another full year.
• Notice periods that are easy to miss
Some agreements require notice of cancellation well before the end of the term – for example, 60 days before renewal. This is the kind of date that can easily be missed by a busy director or a changing committee.
• Exit fees if you leave early
Some agreements require the service to pay a percentage of the remaining fees if it wants to leave before the end of the term the agreement. This can be expensive, even if the service is unhappy with the support.
• Annual fee increases
Check whether the agreement allows automatic annual increases, and how those increases are calculated.
• Broad indemnities
Some agreements place a lot of responsibility back on the service if something goes wrong, even where the preschool has been relying on the service’s advice.
• Limits on the provider’s liability
Some agreements limit how much the provider can be responsible for if their advice causes a problem. This can matter a lot when the advice relates to employment law, compliance, termination, or serious workplace issues.
• Use of the service’s name or logo
Check whether the provider can use your preschool’s name or logo in their marketing unless you object. Many services would not expect this to be included in an HR agreement.
All of this sounds like common sense but people are signing agreements with this firm that have a lot of red flags in it. Read everything carefully before you sign up. to anything.