As an employer it is vital that the employment agreement correctly records the specific terms of the employment relationship, as mistakes can be costly. A bespoke employment agreement will contain clauses to give the employer more power and confidence.

For Employers

Pre-contractual Negotiations and Employment Agreements (for employers)

Section 6 of the Employment Relations Act 2000 (“the Act”) defines “employee”. It includes “a person intending to work”. Section 5 specifies that a “person intending to work” is a person who has been “offered, and accepted, work as an employee”, i.e. an employee who has been hired, who has not yet commenced work.

Provided that an offer of employment has been made, and accepted, that employee is a “person intending to work” whether or not they have signed an employment agreement.

That employee has many of the same protections as an employee who has commenced work, and also some obligations. Should they decide not to commence work, they may have to provide a period of notice to their employer. However, the employer cannot withdraw an offer of employment once it has been accepted. To do so would run the risk of a personal grievance being raised by the employee.

We strongly recommend that an offer of employment is conditional on the employee accepting the terms contained in a written agreement, that is presented at the same time as the conditional offer for employment. The employee can then only accept the offer of employment by agreeing to the terms under which the employer offers employment.

An employee who is allowed to commence work without signing an employment agreement may then bargain on each and every point in the agreement, when it is presented to him after commencement of employment. The employer and employee must then negotiate over the terms until they come to agreement. It  is far better to offer on your terms from the inception of the relationship.

It is mandatory that a signed employment agreement is held on file by the employer for each and every employee. This will include casual, part-time, fixed term and permanent employees. If there is no signed agreement, the employer must retain a copy of the “intended agreement”.

It is also a requirement that fixed term employees are notified of the fact of, and reason for, the fixed term prior to being engaged.

Employment Agreements – It is sometimes tempting for employers to use an employment agreement that they have had for many years, a generic “template” agreement, or one taken from a mate of a mate. However, as an employer it is vital that the agreement correctly records the specific terms of the employment relationship, as mistakes can be costly. A bespoke employment agreement will contain clauses to give the employer more power and confidence. An employer may benefit from being able to deduct funds owing to the employer from the final wages of the employee at termination of employment. Without the employee’s consent (which can be contained in the employment agreement), such deductions are illegal under the Wages Protection Act.

Caution must also be exercised with fixed term and casual agreements as both have specific contractual requirements. If these requirements are not fulfilled then the employer faces the possibility of having its powers under those agreements eroded.

We are very pleased to offer assistance to employers in drafting the terms of their agreements. Each agreement is tailored to the needs of your workplace and takes into account any special policies in place (such as staff discounts, use of company vehicles, or bonus provisions) or requirements specific to your workplace such as health and safety policies, and restraints of trade.

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