Do all your Employees have Employment Agreements?

And do they comply?

A recent report from Statistics New Zealand suggests that nearly 1 in 10 employees do not have a written employment agreement. Of those who do have written employment agreements, it’s probably fair to say that a proportion of those are not up-to-date. Recent changes to employment law also mean some previously compliant agreements may need revising.

Whether you are an employer or an employee, you should check your employment agreement and make sure it complies with the minimum requirements. If it doesn’t, employees may be missing out on entitlements, and employers could be exposing themselves to increased penalties and claims from employees. Directors and senior business managers can now also be held personally accountable.

Minimum requirements

The Employment Relations Act 2000 (ERA) requires that every employee must have an employment agreement and that
agreement must be in writing whether it is for a permanent, fixed term or casual position. The agreement must include the

  • Names of the employee and employer
  • A description of the work to be performed by the employee
  • An indication of where the employee will perform the work
  • Any agreed hours of work or, if no hours are agreed, an indication of the arrangements relating to the times the employee is to work
  • The wages or salary payable to the employee, and
  • 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.

Employers must retain a copy of the employment agreement. Within the ERA, there are further specific requirements in relation to certain types of clauses. For example, if the agreement includes a trial period clause, there are specific requirements which must be met if it is to be relied on to end employment within 90 days.

Recent changes

The Employment Standards Bill was enacted earlier this year, with effect from 1 April 2016. It introduced a suite of changes to employment law including some which mean existing employment agreements will need updating. It also toughened the penalties for employers who do not comply with their obligations.

Some of these changes are summarised below. Please see us if you require a more detailed explanation of the changes and what they may mean for you.

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