Getting it right:
Individual employment agreements can cover various types of employment arrangements including permanent, fixed and casual employees. It is important to get this right as different types of employment arrangements require different terms and conditions. You also need to ensure that the nature of the relationship you have with your workers is correct; is the worker an employee or are they actually a contractor? If you get this wrong you can be liable for significant penalties from the IRD as well as exposing your business to personal grievance claims.
Why you need an individual employment agreement:
Having an individual employment agreement is an important way of documenting the employment relationship between your business and its employees. An individual employment agreement can determine how to solve any employment issues and is documentation of the key terms and conditions of the employment relationship between you and your staff.
Policies and other documentation relevant to the running of your business, including staff handbooks may be incorporated as a term of the employment relationship through a term in the employment agreement expressly recording these policies and other documentation as forming part of the individual employment agreement.
To best protect your business, it is important to have compliant, up to date and unambiguous employment agreements with all your employees.
What an individual employment agreement must include:
In accordance with New Zealand legislation, there are various terms and conditions which must be included within an employee’s individual employment agreement. The terms and conditions which must be included are:
- The names of the employee and employer;
- A description of the work the employee is to perform during their employment;
- The place in which the employee is to perform the work;
- The hours in which the employee is to perform the work;
- The remuneration the employee is to receive for performing the work;
- A plain language explanation for resolving employment relationship problems; and
- An employee protection provision.
While this is only the minimum requirements of what must be included within an individual employment agreement, we would strongly recommend including various other terms to ensure your business is best protected during the employment relationship and to ensure there is mutual understanding between your business and its employees as to how the employment relationship will be governed.
It is important to note that if you are wanting to employ an employee who will be undergoing a probation period or a trial period, compliant clauses outlining the same must be included within the employee’s individual employment agreement.
An example of some further key terms to consider including within an individual employment agreement are:
- Post-termination restrictions (i.e. non-solicitation and non-compete clauses);
- Police criminal test;
- Work visas;
- Health and safety;
- Drug testing;
- Medical examination;
- Leave entitlements;
- Termination of employment including suspension, garden leave, abandonment, medical incapacity;
- Authorised deductions; and
- Employee warranties and acknowledges.
Our expert team of employment lawyers can help prepare employment agreements for your business. If you already have a precedent employment agreement you use, or you are an employee, our team can review your employment agreement to ensure it is compliant and up to date.
The above article provides a brief overview of individual employment agreements in New Zealand. It is not intended to be a comprehensive outline of individual employment agreements or to be constituted as legal advice. If you require any legal advice or further information about this article, please contact the employment team at Davenports Harbour Lawyers to discuss.