Employment Categories and Employment Agreements - Employers still don't get it right!
Basic requirements – but some businesses are still not compliant.
It is still surprising how often we discover that employers are still employing people without written employment agreements… For one thing, it is illegal - the Employment Relations Act 2000 (ERA) requirs employers to have a written employment agreement in place for every employee on the payroll. But it is also not good business practice – by not having one in place, employers risk a fine of up to $10,000.
The ERA also requires that employers and employees deal with each other in good faith and a well written employment agreement is a robust starting point - a handy “pre-nup” to refer to if things go wrong in the employment relationship later on.
When employers ask us to check if their employment agreements are up to date, we see many DIY agreements prepared with the (dubious) “help” of the internet. With little knowledge in this area it can be a dangerous thing - we have seen conflicting clauses that leave the employer vulnerable if the employment relationship sours.
Another relatively common area of concern is the various employment categories and employers’ lack of understanding. We are told by some employers that they have casual staff, but since their engagement have worked regularly – and sometimes up to 40 hours a week. Which means they could be permanent employees. For all intents and purposes the employer still considers them to be casuals (around public holiday, sick leave benefits etc ) or when times are tough and hours need to be reduced, they are simply told they are casuals and no longer required.
As a timely reminder the different employee categories are as follows:
A Casual is employed on an on-call and as required basis without any commitment from either party to ongoing employment. This includes staff engaged for one-off situations. They do not have pre-determined hours of work, and work arrangements are made on an hourly, daily or weekly basis depending on the employer’s needs and availability of the worker.
A Part-Time employee is employed usually to work fewer than say 37.5 hours per week. May have regular hours or days of work or be rostered. Or hours and days may vary, but there is a pattern of regularity.
A Full Time employee is employed usually to work say 37.5 hours or more per week.
Over time an employment category can alter without being changed in an employment agreement. It’s important to ensure you are aware of your contractual obligations for each employment category.
A Fixed Term employee is employed for a set period of time or for a special project or purpose until the work is completed, for example, to cover a period of parental leave, or in order to work on a specific short term project or event. Remember, there must be genuine reasons for entering into a fixed term agreement and a fixed term contract can not be used as a trial to test an employee's suitability to the role.
If in doubt you should obtain professional advice. Battersby HR Consulting – Practical, on-call, HR Advice.
Paddy’s just a phone call away – 09 838 6338.