Simple Steps to build an effective Employment Agreement

The Employment Relations Act (ERA) stipulation in 2000 that every employee must have a written employment agreement was not just for the employee’s protection – it’s the best way to protect both parties, as it avoids so many misunderstandings and potential problems by giving employer and employee a clear understanding of where they stand.

Here is what you must have in your employment agreement

  • Names of the parties involved (employer/employee)
  • Job title and a description of the work to be done (appendix)
  • Where the work will be carried out (address/location)
  • The agreed hours – for example for a contract worker on a casual arrangement ‘as required’ would suffice or you could decide to offer a minimum number of hours (not essential)
  • Pay rate (how much you will be paying them)
  • Statutory public holiday arrangements – whether they will be required to work, pay rate for this work (at least time and a half)
  • The process for employment relationship problems and/or the lodging of personal grievance claims (within 90 days)

And,

  • You must also give an employee the opportunity to seek independent advice before they sign the agreement and respond with consideration to anything that they may raise.
  • Make a copy available to all parties.

Here is what it is useful to have in your employment agreement at your discretion (relative to your organisation)

It is useful to spell out minimum entitlements about leave so that employees are clear (the legal minimum is four weeks). It is also useful to include your requirements around resignation or notice periods and study leave.

If you wish to use a trial period you may need to be clear about this and how long it lasts and what happens if things do not work out, - or, if they do work out.

Work vehicle use may need to be included; drug testing and any equipment required should be clear.

Your expectations around confidentiality should be included plus dress codes or other forms of conduct that you expect.

It would also be a good idea to include a process for variations or changes to the agreement so that both parties are aware of the procedure and both parties can discuss modifications and have adequate time to mutually agree to any changes. Confirmation of all changes in writing are recommended.

‘Good Faith’

This is a legal obligation. It is the underlying principle behind conducting your employment relationship and applies to both parties from the first day you employ someone. It means you both act honestly, reasonably, constructively and with active communication – it implies that you are ‘nice’ to each other.

STARTING POINT

www.Business.govt.nz have an ‘employment agreement builder’ tool which is a great place to start, as you can select or otherwise what you want in your agreement. If you cannot decide what to leave out or include, professional advice may make you feel more confident.

Employment Agreement Builder

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