CR Law- 10 Minutes
Employment Agreements 101
With the recent employment legislation updates it is a timely reminder to check your Employment Agreement templates to ensure they are fit for purpose and contain all of the clauses necessary to your business.
The following is a brief overview of the important clauses to include in your Employment Agreements.
· Permanent / Fixed Term /Casual
§ Full time or part time;
§ Specify hours or flexibility;
§ Availability provisions/compensation for cancelled shifts.
o Fixed Term:
§ Must specify reason e.g. specific short term role, maternity cover, sick leave cover, temporary increased business.
§ Expiry date or triggering event to be specified.
§ Only applies to periods of engagement/employment;
§ No trial period;
§ No termination notice except for serious misconduct;
§ Wording of contract must reflect casual arrangement;
§ Cannot compel the employee to work – casual arrangement must flow both ways.
· Trial periods/probationary periods
o Fewer than 20 Employees (EG 19 or less) for trial period;
o Employment Agreement must be signed prior to starting work;
o Must strictly comply with clause including wording of notice required;
o Probationary periods are the less effective alternative – must still follow a process and can still have a personal grievance for dismissal under a probationary period.
· Days and hours of work
o Must be clear;
o Waged or salary;
o Kiwisaver inclusive or on top of wage/salary – refer to Kiwisaver Act if included in wage/salary – s101B.
· Compulsory things to include in Agreement
o Names of parties, description of work (job description), where work is to be performed, agreed hours, wages or salary, plain language explanation of services available to resolve employment relationship problems including reference to 90 days for personal grievance to be raised.
· Hiring apprentices/employees requiring training/certification paid for –
o If you want to bond them in for a period of time or expect repayment of costs if they leave during a specified time period you must include an appropriate and fair clause;
o Ensure you include a clause stating the Employees have read and agree to the policies you have in place – make them available/accessible to Employees
o Ability to introduce new policies at any time following consultation
o New legislation – specified times according to legislation unless otherwise agreed. Place onus on Employee to take their breaks but you need to ensure you provide them with the opportunity/ability to do so
· Holiday leave/sick leave/bereavement leave
· Add domestic violence leave provision – important to cover off what type of “proof” you might request
· Mobile phones / vehicles / other benefits – best to specify
· Health and Safety – reference to relevant legislation – Health and Safety at Work Act 2015 not Health and Safety in Employment Act.
· Drug & Alcohol clause – important to include if you want the ability to test employees if you suspect they are under the influence of drugs or alcohol.
· Confidentiality, conflicts of interest, privacy, intellectual property
· Termination provisions:
o Notice periods – for resignation + normal misconduct and poor performance;
o Redundancy – no compensation payable is most common;
o Restructuring e.g. selling business, contracting out – check obligations regarding consultation –vulnerable employees – no longer have exempt Employers
o Serious misconduct;
o Ability to suspend – must be suspension on pay;
o Abandonment – 3 days without notification or reasonable excuse;
o Obligations of each party on termination;
· Restraint of trade / non solicitation clauses;
· Resolving Employment Relationship Problems (compulsory);
· Force majeure – e.g. cannot provide work because of “Act of God” (earthquake etc)
· Disclosures and confirmations at end
For specific advice and a review of your Employment Agreement templates, contact Alex – email@example.com