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Employment Contracts: Written vs Verbal

Employment Contracts Every time an employee enters into a work agreement, a contract is set in place. Even if you haven’t signed anything yourself, it might surprise you to know that a discussion and a shake of the hand could be as legally binding as a signed document. Whether it has been written or verbalised, any contract needs to be based on the following criteria: Offer Acceptance of the offer Agreement of all terms Intention to be legally bound A transaction – something is exchanged (eg, services for money) So, what are the key differences between verbal and written contracts, and which should you be using in your business? Verbal Agreements Also known as Handshake Contracts, verbal agreements are often used by small business owners because they are convenient. Many small business owners want their staff to trust them, and as such, they feel that a documented contract is unnecessary (or too formal). What many small business owners don’t realise is that these verbal contracts are legally binding and if a dispute arises, it may cause a plethora of legal issues. Written Contracts In New Zealand it is a legal requirement that every employee is covered by a collective agreement or has a written individual employment agreement. These documents ensure that employees know what to expect, what their obligations are, and protects both the employer and employee. If a dispute does arise then both employer and employee can refer to the applicable agreement Written contracts frame the relationship between employer and employee which help to keep the framework of the business intact and shapes how the employee fits into the business itself. There are certain requirements that all employment agreements must contain, including: The employer and employee’s names Position / role Place of work Any guaranteed hours of work Type of Pay Rate of pay Public Holidays Restructuring Resolving employment relationship problems Employment agreements can also set out additional rights and obligations of the parties over and above the minimum requirements. Examples of such optional clauses are those pertaining to intellectual property and copyright, bonus schemes and additional benefits such as the use of a company phone or motor vehicle. If an employer wishes to change an aspect of an employee’s employment agreement, for example, an employee’s hours of work, the employer will need to have a genuine business reason and go through a consultation process with the employee. What should small business owners do? Verbal contracts might be easier and less time consuming, but they don’t come without problems and they can be extremely difficult to prove. They also do not meet your legal record keeping obligations as an employer.  If you do not have a written contract in place, not only will you be liable for a penalty, but you will be required to provide evidence to support your version of the truth. You not only need to prove that the agreement exists, but also the actual terms agreed to. In the case of a verbal agreement, this could include any emails or text messages that have been exchanged, pay slips, and so on. In the case of a dispute, failure to have a signed written agreement in place can make proceedings in the Authority or Court complex and messy. Having it all on paper provides proof of the agreement if a problem should ever arise. You can easily outline the terms of the employment and any expectations of the employee relationship. Ways a written contract can help small business owners A written contract is one of the most proactive steps Kiwi business owners can take to ensure their staff know what is expected of them. Without a doubt, during the course of employment, there will be a question of the hours to work, agreed allowances or wages. Written contracts provide all of this from the outset so there is no confusion. Legally, it allows business owners a safety net, providing them a point of reference that they can refer back to if they ever need to double check the specifics of an agreement. This means they can easily resolve any queries or disagreements about rights, duties and promises made by either party. Essentially, a written agreement allows a small business owner to protect themselves and their business. Get support with Peninsula Peninsula has worked with Kiwi business owners, supporting them in employment relations and workplace health and safety. Our team provides help and answers to matters of contracts, employment, and employee management. If you’re feeling confused and want some advice, get in touch with the Peninsula team on 0800 675 700. This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

Guide

Personal Grievance

What is a personal grievance? The Employment Relations Act 2000 (the Act} gives all employees the right to pursue a personal grievance if they have any of the following complaints: Unjustifiable dismissal. Unjustifiable action which disadvantages the employee. Discrimination by their employer. Sexual harassment. Racial harassment. Duress over membership of a union or other employee organisation. Unfair treatment: for refusing to work in certain circumstances. due to being affected by family violence. after making a protected disclosure of information. Non-compliance with the provisions relating to protected employees in relation to restructuring. Health and safety concerns. Disadvantaged due to the employment agreement not meeting legal requirements for: agreed hours of work. availability provisions. reasonable notice and compensation for shift cancellations. secondary employment provisions. The employer has, in relation to the employee, engaged in adverse conduct for a remuneration disclosure reason. Breach of protected employment provisions in relation to Reserve Forces service / training or attending jury service. Being compelled as a shop employee to work on Easter Sunday or treated adversely for refusing to do so. How is a personal grievance raised? For a personal grievance in respect of sexual harassment, the employee must present that grievance within a 12-month period of the event giving rise to the grievance. For any other type of personal grievance, the employee must present that grievance within 90 days of the event giving rise to the grievance. The employee should clearly state what their complaint is and the reasons why they believe they have a personal grievance. If the employee has been given notice of dismissal during a trial period, a personal grievance may not be raised for unjustified dismissal unless the trial period is not valid. Keep in mind, however, that an employee on a trial period may still raise a personal grievance in respect of an unjustified disadvantage or discrimination. Raising a personal grievance claim after the employee notification period If the employer agrees, the employee can raise a personal grievance after the relevant time limit of either 90 days or 12 months. If the employer does not agree, the employee can ask the Employment Relations Authority to decide if they can still raise a personal grievance. The employee can only do this if they can prove the delay was due to exceptional circumstances. What is the process? In all cases, the parties should seek to first resolve the matter themselves. Both the employee and the employer may wish to seek advice on how to deal with the specifics of the case. If a problem cannot be resolved, parties can voluntarily attend mediation, either through government mediation services or through independent mediators. If this does not resolve the problem, employers or employees can lodge a claim with the Employment Relations Authority for a determination. If either party is dissatisfied with the determination of the Employment Relations Authority, the issue can be appealed to the Employment Court. What are some potential remedies? The Employment Relations Authority may provide the following remedies to employees who are successful in their personal grievance claim: Reinstatement Reimbursement of lost wages Compensation for humiliation, loss of dignity and injury to feelings Compensation for loss of a monetary or non-monetary benefit Representative costs In addition, the employer may be subject to penalties for breaching employment laws. Managing employment relations with Peninsula Managing a personal grievance can be complicated and taxing for employers. Peninsula has worked with thousands of businesses and employers in New Zealand, supporting them in employment relations and workplace health and safety. For expert advice, contact the Peninsula team today. This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

Guide

Agency and Temporary Staff

Temporary staff (also known as fixed-term employees) are hired on a full or part-time basis. Temporary staff are often hired to work until a specific date or event occurs. Under New Zealand employment laws, fixed-term employees are entitled to the same rights as permanent employees. This means they are entitled to at least a minimum working wage, holiday and leave entitlements, and training for the temporary job they are being hired for. Employers must also maintain records of their written employment agreement and wages, time at work, holiday and leave records. What are Employment Agencies? Many small businesses choose to recruit their own staff, but employment agencies can recruit for specific roles on behalf of an employer. Agencies that specialise in temporary employment often have a number of contractors and temporary workers available for hire at short notice. Hiring staff is a time consuming process for employers as each individual usually requires at least one interview, a skill test and reference checks. Employment agencies can be useful for employers who need temporary staff and do not have the time or resources to do their own recruitment. Reasons for Temporary Work Different companies in different industries have specific reasons for wanting to hire temporary staff. The three most common reasons to hire temporary staff is: To complete a certain project within a specific time During peak seasons and holiday events To replace another employee on holiday or leave Some industries have peak periods where demand for work is particularly high. For example, retail stores get very busy in the months leading up to Christmas, and fruit picking farms can only provide substantial work during certain seasons. If a company is working on a project, they may need temporary staff with skills or qualifications that other team members don’t have. Therefore, the employee will be hired for only the time they are needed to complete the project. Regardless of the position being offered, employers can only offer temporary jobs for genuine reasons based on reasonable grounds. And the employee must be told why they are being hired on a temporary basis. Fixed-Term Employment Agreements A written employment agreement sets out the terms and conditions of the work relationship. Fixed-term employment agreements should outline the following: When or how the employment agreement will end The key reason for hiring the employee on a fixed term If a fixed-term agreement does not specify why the employee is doing a temporary job, the law may consider the employee to be a permanent employee. Training Temporary employees are covered by the same work health and safety laws as permanent staff. Therefore, employers are obligated to provide a safe working environment, equipment and machinery for temporary staff. If an employee needs to learn how to perform a certain task, they should be given supervised training and access to learning materials. Dismissal Sometimes, an employer may need to dismiss an employee before the end of their specified date of completion. This can happen if the employee has been involved in serious misconduct, breaching their employee agreement, or their behaviour is a health and safety risk to the company. To dismiss a fixed-term employee, you must follow the same regulations and procedures as a permanent employee. This means the dismissal has to be done for a good reason, and the process itself must be fair and reasonable. Depending on the circumstances of the dismissal, you may need to provide a notice period for the employee. Wondering how to manage temporary staff? Trying to figure out leave entitlements for fixed-term employees? Peninsula works with Kiwi business owners and employers, offering tailored HR advice and documents including employment contracts. Call us on 0800215036 to find out how we can help you. This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

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