EMPLOYMENT LAW NEWS

February 2006 Issue No: 5

As we kick off another year it is timely to remind you of the need to make sure that you have all your terms and conditions of employment in writing. You also need to make sure that all offers of employment are made by producing the written employment agreement to the prospective employee and telling them that they are entitled to seek independent advice on the terms on offer and that you will consider any issues that they may wish to raise arising from the offer. With the amendments to the Employment Relations Act comes an added obligation for employers which is, that the process above also applies to variations to employment.
Skin crawlingly annoying to some businesses I know, but such is the nature of legislation that is produced by people who have never run a business and would not know the first thing about what really happens in the workplace.
Failure to comply with this process exposes the unsuspecting employer to a penalty of up to $10.000 about 40% more than a drink driving fine.
You see, under employment legislation, employers and employees fit into only two categories and there is no provision for the vast differences in skills and abilities of either category. Employees are all treated as being the same under the law (thick and weak) just as
all employers are treated as being the same (astute business people, strong and of superior intelligence) and who, unlike the weakling employee, are exposed to significant punishment by way of penalties if they get things wrong. Unlike employees, ignorance of the law is no longer an excuse. For employers, the holiday period of not knowing the law, is over. For employees it continues on indefinitely.
One example of a failure to comply is this: say an employer fails to have a written provision in the employment agreement that personal grievance claims must be raised within 90 days, the employee is immediately relieved of the problem by seeking leave of the Authority within 3 years of the grievance arising to have the claim heard. This is called an exceptional circumstance. The fact that the employee did not know the law is the employer’s fault.
So when you offer employment, all terms must be in writing and must contain no less than the following:-
THE NAME OF THE EMPLOYER AND THE EMPLOYEE. The employer’s name should identify any legal entity such as a Company, Incorporated Society, Trust etc. Trading names such as “Joe’s Butchery” are not good enough and usually leaves the person who did the hiring and managing of the employee, exposed to being declared the employer.
A DESCRIPTION OF THE WORK TO BE DONE. You may want the employee to do additional duties outside the usual range of duties attached to the position. The job description attached to the employment agreement is the place to record such information.
THE WORK LOCATION. If you have a business with a number of locations and you want to be able to utilise the employee across those locations, record all locations in this clause of the agreement.
HOURS OF WORK. This area is the one that causes the most problems. If the hours of work are to vary depending on need, then the clause should say so. If there is a minimum of 40 hours (full time) then say so. If the hours are less than 40 and are to vary from time to time, say so.
THE RATE OF SALARY OR WAGES including a reference to the fact that if an employee works on a public holiday, they are entitled to time and a half their usual pay.
A PLAIN LANGUAGE EXPLANATION of the services available for resolving problems including a reference to the fact that a grievance claim is subject to the 90 days in the Act for bringing grievances.
PROBATIONARY PERIODS. This period should be set to allow the employer to properly assess the employee’s skills. If it becomes apparent that you have picked the wrong person for the job, don’t think that you can simply wait until the probationary period comes to an end and then give the employee the boot.
The law relating to the requirement for an employer to justify dismissal after or during a probationary period still exists. The only real difference is that the remedies for an unjustified dismissal attached to a probationary period are lower and the threshold required for justifying dismissal is not as arduous.
FIXED TERM AGREEMENT. If the employment is for a fixed term only then there are other rules that need to be in writing and included in the employment agreement.
(i) There needs to be genuine reasons based on reasonable grounds that the employment will end a certain way and it is necessary to explain to the employee in writing how the employment will end and the reasons for it ending that way. (ii) If there is non compliance with the written requirements relating to fixed term employment then guess what, the employee may elect either before the employment ends or after it has ended to treat the employment as continuous. This means that if you do everything clearly and openly to an employee but verbally, the employee can elect unilaterally to be your permanent employee. This may not cause too much of a problem because you may be able to say in response “welcome aboard Bloggs but I have no work for you” (time will tell).
IMPLIED TERM TO DEDUCT UNION FEES. Even though the law requires all employment agreements to be in writing there is one exception and that is because of the Wages Protection Act 1983. This Act prevents the employer from deducting money from wages without the employee’s written consent. However, the Employment Relation Act says that it does not need to be written as it is an ‘implied term’ that union fees can be deducted without the need for written consent from the employee concerned.
EMPLOYMENT PROTECTION.
As from 1st December 2005 all employment agreements are required to have what is called an ‘employment protection’ clause. This clause is to provide a consulting process involving the buyer of the business and its existing employees. The way the Act is worded, it does not seem to provide any statutory protection at all, but nevertheless it needs to be there.
And just to finish, the law is that if there are any disputes over matters that have been discussed and agreed to verbally, it is for the employer to disprove the employee’s claim if the disputed term is not in writing.
Happy New Year and call us if you need your agreements updated.