Manawatu Employment Law Services
+64 6 3484811

WHAT HAS TO BE IN AN EMPLOYMENT AGREEMENT

It is not as well-known as it should be that there are certain provisions, called mandatory clauses, that must be in employment agreements, both collective and individual.  This article covers only individual agreements. Section 65 of the Employment Relations Act 2000 states that the agreement must be in writing, may contain such terms and conditions as the employee and employer see fit, and MUST include the following:

  • the names of the employer and employee;
  • a description of the work to be performed by the employee (this can be a separate document listed as a Job Description), including a job title;
  • where the job is to be performed i.e. the place of work;
  • the wages or salary payable to the employee;
  • an indication of the days and hours the employee is to work, although the agreement can state that those may be flexible;’
  • a clause covering payment for work on public holidays as per the requirement of the Holidays Act 2003;
  • a clause covering the employer’s obligation to consult with, and get a response from, the employee in the event of any restructuring of the business that will involve a new employer for the employee, plus the employer’s obligation to negotiate on the employee’s behalf with the new employer ;
  • and an employment dispute resolution clause, outlining the process both employer and employee should follow in the event of any disagreements arising in the relationship.  Such clause must make reference to the ninety day period within which a personal grievance must be raised by an employee (sec. 114 of the Act).

There are other statutes that cover the rights and obligations of employers and employees that do not have to be included in an employment agreement.  These are:

Minimum Wage Act 1983

Wages Protection Act 1983

Equal Pay Act 1972

Holidays Act 2003

Parental Leave and Employment Protection Act 1987

Health and Safety in Employment Act 1992

Human Rights Act 1993.

Parties to an employment agreement cannot contract out of any of the provisions of the above Acts.  In other words, it is not possible to offer any terms or conditions of employment which are less than the minimum rights and obligations outlined in them.  It is, however, permissible to offer more.

FIXED TERM OR CASUAL AGREEMENTS

In conclusion, it must be stated that agreements that are not of an indefinite and ongoing nature, such as fixed term or casual agreements, may not need to follow the same list of mandatory clauses.  For example, a casual worker may not be eligible to get paid extra time and a day in lieu for working on a public holiday as it may not be a day that he or she normally works, which is a requirement for such payment.  Or, again, a casual or fixed term employee may not be eligible for the five days sick leave due to a permanent employee after working a continuous period of six months.

Thus, from the above, it can be seen that having an employment contract that complies fully with the law isn’t something that most employers would be au fait with.  A final example would be that of a trial period clause which is permissible up to ninety days.  A lot of employers are not aware that, unless said clause contains the provision that (a) the employer can dismiss the employee during the trial period, and (b) a provision stating that the employee is not entitled to bring a personal grievance or other legal proceedings in respect of the dismissal, then the clause is invalid and the employer could find itself facing an unjustified dismissal claim if it invoked it (Employment Relations Act 2000 sec.67A(2) ).  Going to the expense of getting legal advice on employee contracts would certainly avoid more costly time and trouble if an employer ever faced a personal grievance.

Posted: Fri 20 Oct 2017

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