Business mentor: Handshakes all round are no good when you are taking on staff

Q: I am looking to hire some staff, do I have to give them a written employment contract or can I just get by with a handshake?

* Gordon Barlow, from the Department of Labour's Workplace Small Business Support Centre, replies.

A: Just as you wouldn't buy a house or an expensive piece of machinery on a handshake, you should get something in writing when taking on staff. You are legally obliged to have a written employment agreement and it will also help your business to run more smoothly and be more productive.

The Department of Labour provides a free employment agreement builder at www.ers.dol.govt.nz/relationships/builder that lets you create an employment agreement just by clicking your mouse. It clearly shows you the clauses that are compulsory, the clauses that reflect minimum conditions, and clauses that can be included voluntarily to suit you and your employee. Small business people have created more than 38,500 employment agreements to date with the employment agreement builder.

The employment agreement is where employer and employee can lay down what they expect from each other - from hours of work and skills required, to holidays and leave arrangements. Having it in writing, with a chance for your staff member to read over it and seek advice, will ensure that both of you are clear on what you have agreed. This includes agreement on how you will resolve any problems you might have in the future.

With unemployment at its lowest point in a decade, we are seeing a tighter labour market. You will be relying more on employees for their labour, skills and knowledge to drive your business. The investment you make in staff may well be the most important one you make. There's no room for misunderstanding or assumptions and you may need to look at new ways to attract and retain good employees.

Workplace Small Business Support (SBS) has been operating in Auckland since mid-October and the service will soon be extended to three other locations.

Workplace SBS can help small to medium-sized businesses with information and assistance on health and safety and employment relations.

* For general information about employment relations and health and safety, contact the Department of Labour on 0800 20 90 20. For information relating specifically to Department of Labour Workplace Small Business Support, contact Gordon Barlow on 09-970 1508