PKF Francis Aickin Limited, Far North, New Zealand
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03 Mar 2016
The responses received to our last article indicated that some employers are not aware of their obligations. So here are the basics:
Employment Agreements must be prepared for all employees (full time, part time, casual or fixed term) and must be in writing, signed by both parties. The aim is to provide clear expectations about the role, the working conditions and employment rights. A clearly drafted agreement can help reduce risk of misunderstandings. The agreement can be a collective agreement (negotiated by a registered union) or an individual one.
An individual employment agreement is meant to be negotiated between the parties, but in practice the prospective employee is normally provided with a standard agreement used for other employees in the organization. An important point to note is that the draft employment agreement must be provided to the prospective employee at the time of offering them the job, providing a reasonable opportunity to get independent advice on the agreement. Any points of difference can then be negotiated before the final agreement is signed.
The agreement must include:
If the agreement is silent on any particular entitlement, the minimums according to the law will apply.
The employer must retain the signed agreement with a copy to the employee on request. He must also retain an “intended agreement” even if the employee has not signed it.
Trial Periods of up to 90 days can be offered to prospective new employees (but not to persons who have previously been employed). They must be agreed in writing and negotiated in good faith. An employer can dismiss an employee before the end of this period without exposure to an unjustified dismissal claim. However as all the other terms of the agreement apply, the principle of fairness and any provisions regarding giving notice would have to be adhered to.
Minimum Entitlements are provided by legislation and can not be contracted out of, but more generous entitlements can be provided in the agreement. The minimums are:
“..there are numerous requirements for an employer to consider.”
Other Obligations include providing a safe work environment, keeping complete and accurate employment records, and deducting and accounting for PAYE and Kiwisaver.
As can be seen from above, there are numerous requirements for an employer to consider. Most accountants provide employment advice to help employers interpret these requirements. The requirements and other useful information can be found on the NZ at Work website http://employment.govt.nz/er/
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