Choosing an employment agreement? One size does not fit all!
General / 25 May 2017
Using the right type of individual employment agreement (IEA) is key to managing the risk of misunderstandings, mismatched expectations, and personal grievance claims. But which one do you choose?
Seeking specialist advice on your IEAs will ensure your specific business needs are addressed, and can help to avoid messy disputes where things go wrong.
Permanent/ongoing? Most employees are engaged on a permanent or ongoing basis, even where they work part time. Permanent employees are entitled to annual holidays, to sick and bereavement leave after six months, and their employment can only be brought to an end with good reason and after following a fair process, or for resignation.
Fixed term? A fixed term IEA can be used where an employer has a genuine reason, based on reasonable grounds, for defining the period of employment, for example, covering for maternity leave or to complete a specific project.
Where an employee is engaged on a fixed term basis, at the end of the term, employment terminates. If the fixed term IEA is not correctly drafted, or if the employee is given the expectation of continuing work after the fixed term, the employment relationship becomes permanent or “ongoing” and can only be ended accordingly. The employer may also have additional obligations to the employee in terms of holidays and leave.
Casual? Casual employment is where an employee works on an “as and when required” basis only – that is, there is no expectation on either party that work will be provided, or performed. Casual IEAs are essentially very short fixed term IEAs, and must reflect that work is for short periods of engagement as the parties may agree from time to time. The terms of those engagements, including the reasons for the same, should also be recorded on each occasion that the employee is engaged to work.
Significant risk exists where an employee is labelled “casual”, but actually works on a regular or continuous basis, because they are permanent employees, entitled to holidays and leave, yet are often not paid for these. Employers also cannot simply stop offering work to an employee who has been working in this way, or otherwise face possible personal grievance action.
Contractor? Where workers are engaged on a contract basis, the relationship is essentially commercial, and minimum employment rights do not apply. However, the contract alone is not determinative of the relationship, and can be challenged by the contractor, on the basis that they should have been treated as employees and allowed minimum rights accordingly.
Need more information? The Copeland Ashcroft Law team will be delivering free seminars nationwide on ‘Getting it right from the start’ – employment agreement and onboarding tips you need to know to safely employ staff” in June and July 2017, see https://www.copelandashcroft.co.nz/training-events for details and to sign up.
Published in the Bay of Plenty Business News May/June 2017 issue [pg.25] – here