Employment Agreement

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Employment Agreement

An employment agreement is the basic building block of any employer-employee relationship. Every employee must have a written employment agreement. They help employees understand expectations and working conditions. They ensure employers feel they have been clear and communicated all responsibilities and duties. It clearly lists out the terms and conditions of employment.

Things employers need to know

An employment agreement is usually a written document outlining key responsibilities, conditions, and working environment for the employee. It is mandatory to provide employees with a written employment agreement.

  • Failure to provide the written employment agreement may result in fines for employers
  • The employment agreement will be specific to the employee in question. However, there can also be collective agreements.
  • An employment agreement should be signed by employer and employee. It can still be valid if it isn’t and there is verbal acceptance.
  • Employees can use electronic signatures for their employment agreements
  • You can include what you feel is pertinent in the employment agreements but certain things don’t need to be there, such as notice period
  • You cannot use the employment agreement to reduce or trade off minimum rights such as minimum wage, annual holidays etc.
  • Employers do have to keep a copy of the employment agreement on file or the current signed terms and conditions. Even if the employee hasn’t signed it, the employer should have it on record. Employees can request a copy and are entitled to it.

Types of employment agreements

Individual employment agreements

An individual employment agreement is negotiated by an employer and an employee. Before the employee starts working, all terms and conditions should be discussed, reviewed, and included in the employment agreement. If the employee feels uncomfortable with something in the agreement, they can talk to the employer and negotiate mutually acceptable terms.

An individual employment agreement needs to be signed by the employee and the employer. If the employee doesn’t sign the employment agreement and doesn’t disagree verbally, the employer may take their silence as agreement. The employment agreement can end up applying to the employee even if they have signed it, unless they can somehow show they didn’t agree to all of it or parts of it, or some part of it is unlawful.

Collective employment agreements

A collective employment agreement is as the name suggests, for a collective group of employees. It is negotiated by registered unions and employers. Employees who are union members and covered by the collective agreement coverage clause must be on the collective agreement.

If an employee is covered by a collective employment agreement, they can also have additional individual terms. These should be set out in writing and signed by the employer and employee.

How to create an employment agreement

While an employment agreement must be made by a professional, there are some basic things that employers should know to include in it.

The individual employment agreement must include the below:

  • the name of the employee
  • the name of the employer
  • description of the job title and duties
  • place of work (location)
  • agreed hours and indication of hours including number of hours, start and finish times, or days of the week the employee will work
  • wage rate or salary, how it will be paid
  • mention of time-and-a-half payment for working on a public holiday
  • trial periods or probationary arrangements
  • if the employment is fixed-term
  • rest and meal breaks (if they are paid or unpaid breaks)
  • any other relevant workplace policies and procedures or rules

Offering employment agreements

Employees should be given a written copy of the employment agreement and a reasonable amount of time, to get independent advice on their individual employment agreement.

Employers can put as many terms in the employment agreement, but they can’t have terms that are not as good as the legal minimum, even if the employee has agreed to it. Just because an employer has offered an employment agreement to the employee, doesn’t mean they are under obligation to accept it or accept it as is. An employee can change their mind and turn down the offer or negotiate any terms they want to change and suggest any additional terms that they would like to be covered.

Employers must always negotiate an agreement in good faith. You can also get advice from a lawyer or workplace relations professional to know if the proposed agreement is suitable for your business requirements. If the employee raises any issues or concerns, listen to them and respond in good faith.

Employees have the freedom to negotiate the agreement or ask the employer to explain something if it’s unclear. Take the document away and read it carefully before signing. Employees can get a professional to review it. If they don’t agree with something in the agreement, talk to your employer about it. After all terms are mutually agreed upon and you sign the agreement, request for a copy and keep it safe.

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