First steps are important

The start of an employment relationship is like a dance. If the correct steps are taken in the correct sequence it appears effortless and elegant. Conversely, if you start off on the wrong foot, or attempt to skip steps, things can quickly turn into a tangled mess.

Have a plan

Before starting to recruit, an employer should consider a number of factors, such as:

  • Will the worker be an employee or independent contractor? – this article covers employment relationships only
  • Does the work fall within the coverage of a collective agreement with an on-site union?
  • Having a job description/outline
  • Will there be a 90-day no fault trial provision or probationary period?
  • Is the position for a fixed term?
  • Are there any special/unusual factors relating to the position? (eg, skills, health etc).

Ideally, a draft individual employment agreement (“IEA”) should be prepared before candidates are interviewed. This helps participants understand precisely what is expected of them.

Why does this matter?

The law imposes a number of obligations on employers, including requiring IEAs (and intended IEAs) to be kept and recorded in writing before the employment begins. Failure to comply may make the employer liable to pay a penalty.

The terms and conditions of the employment relationship are determined when offer and acceptance take place (and this should be done in writing). It is not possible to introduce new terms into the IEA after offer and acceptance have taken place without the agreement of both parties.  Also, if employers don’t comply with the legal requirements for 90 day no-fault trial periods, those trial periods will be invalid and unenforceable and no actual use to the employer.

This is particularly important if an employer wishes to have a no-fault trial provision, because the law requires agreement to a trial period to be recorded in writing before the employment starts.

If an employer fails to promptly record the terms of employment in a written IEA and permits an employee to begin working for them then they breach the Act and run the risk that the employee may be deemed to be employed on the basis of a verbal agreement.

Peter interviews Duncan, who is clearly the outstanding candidate for the position.

After agreeing on the hours and the starting salary, Peter shakes Duncan by the hand, telling him “you will be perfect for the job, I’d like you to start on Monday”.

On his second day of work (Tuesday) Duncan finds an IEA containing a no fault trial provision placed on his desk. He is told it is “standard”.

Duncan refuses to sign the agreement, saying that a verbal offer of employment has already been made and accepted and that he does not agree to the inclusion of the trial period.

Unfortunately for Peter, Duncan is correct. It is too late to add a trial provision. Under the Employment Relations Act 2000 a no fault trial provision has to be agreed upon in writing before the employment starts.

How employers can protect themselves

If considering hiring a new employee, have the intended IEA ready to use before the offer of employment is made. The IEA must be in writing, contain the clauses required by the Employment Relations and Holidays Acts, and include any no fault trial provision.

The employee should be provided with a copy of the intended IEA (this is often the “offer” of employment) and told when the offer will lapse if not accepted. The employee must be given sufficient time to obtain advice and consider (and respond to) the offer. It should be clear that the employer will not be bound until it signs the intended IEA.

The terms of employment must be agreed and documented before the employee starts work.

What Bartlett Law can do for you:

We are specialists in workplace law. We can assist you in preparing IEAs that are appropriate for your requirements and guide you through the steps necessary to begin the employment relationship on terms of your choosing. We can:

    • Draft your IEA for you
    • Provide and advise on no fault trial provisions
    • Draft employment policies
    • Vet IEAs for prospective employees
    • Provide advice on updating existing agreements
    • Provide contracts for independent contractors

Contact us for more information.