Employment Agreements – Administrative Annoyance or Vital Necessity???


Often, writing up Employment Agreements can feel like a hassle. The salary or hourly rate and the hours have been agreed between both parties and everyone knows what’s involved. Taking up precious time writing out an Employment Agreement just takes you away from your core business!! And as for Job Descriptions…. (more about that another time).

The facts of the matter are that they are important. An Employment Agreement sets out the expectations placed on both parties. It sets the ground rules. Often what is said by one person verbally can be interpreted by another completely differently. When you put things in writing it takes ambiguity out of the equation.

The employee also needs to be given sufficient time to thoroughly read the Agreement and to seek independent advice should they wish. You cannot make them sign a contract under duress.

You also need to be in possession of their signed Agreement before they start work. The Employment Authority have ruled on several occasions against the employer when they have tried to enforce the 90 day rule, as the employee was deemed to be working for the employer before the Employment Agreement was signed.

It can be a bit of a headache, but the Ministry of Business, Innovation and Employment can fine a company up to $10,000 for an individual or up to $20,000 for a corporate!!

All in all, they are important. Even when the employee does not want one. An expensive lesson a local company recently learnt - See the article below (from the Bay of Plenty Times)

If you have any questions at all regarding Employment Agreements then give Paula a call.

A Western Bay of Plenty company has been fined $3000 for not providing its staff with individual employment agreements.

Western Bay Seafoods was ordered to pay the fine in an Employment Relations Authority ruling last Thursday.

Authority member James Crichton determined the company failed to provide its employees with individual employment contracts in accordance with the law.

Western Bay Seafoods claimed all the employees made clear at the time they did not want written employment agreements, so they chose not to take any further steps.

However, the company acknowledged the approach was "wrong-headed and illegal".

After labour inspector Erin Spence filed a Statement of Problem in May, the company filed a Statement of Reply in June.

Ms Bennett then took part in a telephone conference which resulted in the parties agreeing to mediate in attempt to resolve matters.

Mediation took place in July, resulting in a complete agreement between the parties.

Mr Crichton said he commended the parties for the common-sense way in which they had dealt with the matter.

Western Bay Seafoods was fined $3000 for breaching section 65 of the Employment Relations Act plus a $71.56 filing fee to the labour inspector.

- Bay of Plenty Times


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