The Covid-19 pandemic has brought into sharp focus the importance of having well-considered, written and signed employment agreements.
Unlike other relationships, an employment relationship is a blend of good-faith obligation and written agreement. Having a properly constructed suite of employment agreements and policies is essential for businesses to manoeuvre through this peculiar time in our history.
Businesses without employment agreements are liable to penalties awarded under the Employment Relations Act 2000 - up to $10,000 for individuals and $20,000 for companies.
When it comes to what goes into employment agreements, one size does not fit all. While there are mandatory clauses that must be included, there are others that bring efficiency to the employment relationship, or are relevant to the nature of the role and industry.
As a starting point, employment agreements should include:
• The names of the parties
• description of the work to be performed
• hours and days of work
• any specific rules within employment
• provisions relating to redundancy and restructuring notice periods
• public and annual holidays entitlements
• sick leave and bereavement leave entitlements
• workplace policy details
• remuneration details
• resolution of employment relationship problems, including advice that personal grievances must be raised within 90 days.
For more senior roles, clauses regarding restraints of trade, non–solicitation and confidentiality should also be included.
Employment agreements need to be regularly reviewed. Before you present any new employee with an agreement, check if your agreement template is current.
For instance, the rules around the 90-day trial period have changed on at least three occasions – unless the employment agreement has the correct version, you may not be able to rely upon the clause.
With the kind of 20/20 vision only available in hindsight, we are now seeing many employers introduce a force majeure clause or something similar into their employment agreements, to protect their business in the event of further pandemics, unforeseeable events or even an act of God.
But be warned, the devil is in the detail in these clauses. You should closely examine the language and scope of the clause to ensure it fits within the context of your particular workplace.
A boilerplate-type force majeure clause will not work effectively and will not respond to the nuances of your workplace or industry.
It's also worth noting that while the current pandemic is likely to be classed as a force majeure event, if pandemics occur regularly in future the courts could well determine that pandemics are foreseeable, and therefore not a force majeure event.
• David Grindle is director in charge of the Employment Law team at WRMK Lawyers. He has practised in this area of the law for 17 years.