Employment Contract Law

important factors to consider

Employment Relations Act 2000

The Employment Relations Act 2000 (as amended) requires that all employment agreements are in writing. Written employment agreements are essential in every business.

The employee's rights are largely protected by law. If you do not follow the correct procedure, you will find yourself in trouble, regardless of whether there is an employment agreement in place or not.

However, the reverse is not true. If you are mistreated by an employee, for example by them being consistently late, or rude to clients, or misusing company property, an employment agreement is an essential tool to assist in addressing the problem. Why? Because an employment agreement spells out what is, and what is not, acceptable in your employment arrangements. By signing the agreement, both employee and employer are stating that they accept the rules. If those rules are broken, you are now in a position to deal with the employee issues effectively.

The only things that MUST NOT be in an individual employment agreement are anything that is inconsistent with the Employment Relations Act 2000 (as amended) or anything that is otherwise unlawful. So, for example you cannot put in an employment agreement that the employee will only receive 2 weeks annual leave, because this would be contrary to the Holidays Act 2003.

Remember that the purpose of an employment agreement is to clearly spell out the rules, so that if the rules are broken, you can point back to the employment agreement and show that the employee agreed to the rules when they commenced employment with you.

As a rule of thumb, if you want a practice standard or rule in your workplace to be enforceable, include it in or as part of your employment agreements. Basically the act stipulates only the following must be in an agreement:

i.     Names of the employee and employer concerned;

ii.    A description of the work to be performed by the employee;

iii.   An indication of where the employee is to perform the work;

iv.   An indication of the arrangements relating to the times the employee is to work;

v.   The wages or salary payable to the employee;

vi.  A plain language explanation of the services available for the resolution of employment relationship problems, including a reference to the period of 90 days within which a personal grievance must be raised;

vii. Time and a half payment for work on Public Holidays;

viii. A redundancy process when a business is sold or transferred; and

ix.  Where a 90 Day Trial Period is used, a statement declaring the absence of legal redress where dismissal takes place.

Employers Assistance can help you with your employment agreements. Our Employment Contracts Creator Software or Online Employers Tool Box produce all the different types of agreements compliant with current legislation.

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The Employers Toolbox Online has the same Employment Agreements module interactively online for subscribers
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