Employment agreements

Casual Employment Agreements

A casual employment relationship is short, casual in essence, and there is neither regularity nor continuity of employment. Work may be rejected just as easily as it is accepted.

A casual employment relationship should be carefully managed so that the obligations of the parties are not altered by the passage of time.

Casual employment agreements must be in writing; the casual nature of the relationship should be clearly articulated from the start.

• Employers must give employees the opportunity to seek independent advice about the intended agreement.
• Casual employment can not be used to establish the suitability of an employee for permanent employment.
• EMA Consultants can assist with drafting specific casual agreements.

Fixed term employment

If the agreement is for fixed term employment, the agreement must state in writing:

• the way in which the employment will end; and
• the reasons for it ending in that way.

Fixed term employment must meet the requirements of s66 of the Employment Relations Act 2000 and care is needed when drafting clauses as they are particularly difficult.

• Employers must give employees the opportunity to seek independent advice about the intended agreement.
• Fixed term employment can not be used to establish the suitability of an employee for permanent employment.
• EMA Consultants can assist with the drafting specific fixed term agreements.

Holidays Act 2003 requirements:

• All employment agreements must include a provision that confirms the right of the employee to be paid at least time and half for work on a public holiday.
• An employer must (at the time of entering into an agreement) inform the employee about their entitlements under the Holidays Act 2003.

Additional agreement terms

In addition to these minimum terms, the parties are able to include any other matters they agree upon. However these cannot be unlawful or contrary to any minimum terms of employment set out in other legislation such as:

• Minimum Wage Act 1983.
• Holidays Act 2003.
• Wages Protection Act 1983.
• Parental Leave and Employment Protection Act 1987.

It is strongly recommended that any additional terms or conditions governing the employment are also recorded in writing and signed by the parties before the employment commences.

Permanent Agreements

Entering into an individual employment agreement

Before an individual employment agreement is entered into, the employer must follow this process:

• Provide in writing, a copy of the intended agreement to the prospective employee;
• Advise the prospective employee they can get independent advice about the agreement; and
• Give the prospective employee a reasonable opportunity to get that advice.
• Consider and respond to any issues raised by the prospective employee.

Penalty: Note there is a penalty (maximum $10,000) for non-compliance with the above procedure.

Employment Relations Act 2000 requirements

The Employment Relations Act 2000 requires that all employment agreements must be in writing. It also prescribes a process for entering into them and prescribes that all agreements have the following minimum terms:

• It contains the names of the employee and employer (registered name and trading name).
• It includes a brief description of the work to be performed.
• It indicates where the work is to be performed.
• It indicates the hours of work.
• It sets the wages or salary to be paid.
• It has a clause on the services available to resolve employment relationship problems, including reference to the 90 days within which a personal grievance must be raised.
• It contains an employment protection provision. [This requirement was imposed by the Employment Relations Amendment Act (No 2) 2004, with effect from 1 December 2004.]

Holidays Act 2003 requirements

The Holidays Act 2003 requires that:

• All employment agreements must include a provision that confirms the right of the employee to be paid at least time and half for work on a public holiday.
• An employer must (at the time of entering into an agreement) inform the employee about their entitlements under the Holidays Act 2003.

Additional agreement terms

In addition to these minimum terms, the parties are able to include any other matters they agree upon. However these cannot be unlawful or contrary to any minimum terms of employment set out in other legislation such as:

• Minimum Wage Act 1983.
• Holidays Act 2003.
• Wages Protection Act 1983.
• Parental Leave and Employment Protection Act 1987.

It is strongly recommended that any additional terms or conditions governing the employment are also recorded in writing and signed by the parties before the employment commences.

Continuity of Employment and Restructuring

Employers who employ staff who are covered by schedule 1A of the ERA should get advice. This section of the law deals with workers who are colloquially called 'vulnerable workers' and special provisions apply to them (please see the Restructuring section).

Employment Protection Provision

Employment agreements for all other employees who are not covered by schedule 1A must include an employment protection provision.

Probationary arrangements

If the employment has a probationary arrangement or trial period, this must be specified in writing within the employment agreement.

Collective Agreements

Collective agreements are a form of employment agreement provided by the Employment Relations Act 2000 that may be in force for up to 3 years and continued for up to a year after that.

A collective agreement may be between one or more employers and one or more unions; the Act does not recognize any alternative bargaining agent in respect of collective bargaining situations.

A collective agreement is binding on the employer and the union in respect of the employees who work for the employer and who are members of the union and whose work is specified by the agreement as being covered by it.

The Act specifies the minimum contents that collective agreements must contain.

Employees who are non-union members but whose work is covered by a collective agreement when that agreement comes into force may become bound by that collective agreement by joining the union.

Employees may resign their membership of a union that is a party to a collective agreement and which covers their work and still be bound by the same terms and conditions of employment. The employee's employment in this instance is bound by an individual employment agreement based on the collective, terms may varied by agreement.

In some instances you may be required to decide what the terms and conditions of an employee's employment are, and the matter will be confused by a change of employment agreement. In these instances the terms and conditions of employment of an employee bound by a collective agreement may include additional terms and conditions that are not inconsistent with the terms and conditions in the collective agreement.

A collective agreement may be enforced by an individual employee who is bound by it or by a union or employer who is a party to it.