Requirement to have signed employment agreements from 1 July
Thursday, 14 July 2011
As a result of recent legislation changes, from 1 July 2011 employers must keep and retain on file signed copies of employment agreements for all employees, including casuals and fixed-term employees. Employers must also retain copies of intended agreements if not signed, however an unsigned employment agreement will not necessarily be treated as forming agreed terms and conditions of employment. This provision also applies to any subsequent variations to employment agreements. Copies of employment agreements must also be provided to employees on request.
Employers in breach of employment agreement requirements may be liable to a penalty imposed by the Employment Relations Authority if proceedings are brought by a Labour Inspector. The maximum penalties are up to $10,000 for individuals and $20,000 for companies. However, before an action can be brought, a Labour Inspector must give an employer written notice of the breach and seven working days to remedy the breach.
The new requirement, which also applies to existing employment agreements, will make it much harder to argue that an unsigned agreement is binding, so it is now even more important to ensure that employment agreements are finalised and signed before employees start work. Similarly, if a 90 day trial period has been agreed to, details of the arrangement must be in the written employment agreement and the agreement signed before the employment begins, otherwise the trial period is unlikely to apply.
While most employers do retain copies of signed employment agreements, now is the time to review your employee files. If there isn't a copy of a signed employment agreement on file, then you should get it arranged. The Association has a range of template employment agreements for different circumstances as well as letters of offer and variation.
To access these click on 'member resources: employing staff' - please have your login and password details ready, or if you require any further information about employment agreement requirements please do not hesitate to contact your Regional Manager on 0800 500 503.