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Employment Agreements – What Do Employers Need to Know?

Published October 05, 2017 (last updated November 16, 2020) -

A good employment relationship starts with a good employment agreement; where employers and employees confirm they have the same expectations about the role and the working conditions.

In my experience as a Business Sales Consultant interacting with business owners in various industries across New Zealand, I’ve had  conversations with dozens of employers every day I have been with Employsure, with a lot of questions on employment contracts. Below is a summary of some of the most common concerns I get from businesses in every sector.

Is it a legal requirement to have a written employment agreement?

Yes, New Zealand legislation requires every employee to have a written agreement with their employer. Many employers overlook this simple but major step, completely unaware of their obligations under the Employment Relations Act.

What needs to be covered in employment contract?

The individual employment agreement must include the names of employer and employee; a description of role and responsibility; an indication of place of work and hours of work; and wage or salary payable and how will it be paid and a clause in respect of dispute resolution. Given there are many different types of contracts, there may be different requirements for each staff member For more information on the best agreement for the different types of employee please check this link.

What happens if an employer makes a mistake?

It happens. Employers have a lot on, and it is easy to make a mistake. The first step is a thorough attempt at resolving the issue on an informal level, in case it’s unsuccessful it is advisable to get an independent mediator to resolve the issue. If all of these efforts fail and the relationship is completely broken it is very likely that employers will end up being involved with the Employment Relations Authority (ERA).

What should employers include in Employment agreements to help with restructuring and redundancies?

Employment contracts play an important part when navigating business restructures and redundancies. Please note there is no legal requirement for severance pay under the legislation.

This is where a lot of business owners can struggle to justify to their staff in a compliant way, what the business change is going to be and what it means for the employee.  As there could be multiple reasons for an employer making someone redundant or to carry out a restructure it is important to take extra care while conveying the message to avoid any personal grievance or conflict at work.

Given the number of challenges facing business owners, as a Business Sales Consultant at Employsure it is vital for my conversations to ensure we provide the support necessary to every employer. Get in contact with us on 0800 675 700 if you have any questions about your obligations as an employer.

About Employsure

Employsure is one of New Zealand’s largest workplace relations advisers to small and medium businesses, with over 5,500 clients. We take the complexity out of workplace legislation to help small business employers protect their business and their people.

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