Your rights: Contract renewal clauses

By RICK HARGREAVES of Phillips Fox

My husband has an individual employment agreement with an annual renewal clause.

Before the renewal, he mentioned to his immediate manager that this was due in October. After several reminders during October, November and December, he referred the matter to the managing director in late December.

In January, my husband received an email with his agreement attached from the managing director. There were several changes made and we responded by email that night with comments and additional changes and requested a meeting to discuss the matter.

While the major points were agreed at a meeting in February, some minor issues still needed to be settled.

In frustration with the lack of progress (there was none), I called in to see the managing director in mid March. Again, we were "put off" because of other priorities. We followed up by email and further excuses followed.

What are our options? Can this been considered a lack of good faith?

The first issue to address is why does your husband's agreement have a renewal clause?

A renewal clause may be appropriate in a collective employment agreement or a genuine fixed-term individual agreement but there is no reason to renew the terms of a permanent position on an annual basis.

The terms and conditions of a permanent position continue until the parties agree to vary them or until the employment relationship ends.

If an employer wants to offer a permanent employee different terms and conditions the usual practice is to present the employee with a proposed new agreement or a variation document.

The employer should invite the employee to consider the new terms and conditions. The employee is not under any obligation to agree to the new terms and conditions.

Your husband has agreed to the "major points" of the new agreement. Hopefully these are beneficial to him and are not an attempt by the employer to reduce your husband's conditions of employment.

If your husband has been unfairly coerced into accepting reduced terms and conditions of employment then the employer will have acted in bad faith and your husband may have a disadvantage case.

The drawn-out process you describe could be considered a lack of good faith.

If your husband wishes to conclude a new agreement his best option is to formally set out the outstanding terms and conditions he would like to discuss and insist on a meeting with the managing director.

If the managing director continues to put off discussions your husband's options are either to raise a disadvantage grievance or to write to the managing director stating that because negotiations have broken down he will be returning to his original terms and conditions under the old agreement.

I have worked in the same position for 12 years, and have not had a wage rise for almost seven years.

While I was on holiday, my boss' wife (who job shares with me) had a rise of $3.50 an hour (giving her $18 an hour, I get $14.50 an hour). I have been told by Employment Relations Service that companies are no longer required to give wage rises, and find this hard to take, as the cost of living has risen in the past seven years.

I will need to negotiate with my employer, but even when we were given our employment contracts we were told that these were the conditions, and that we had no say. As I am not happy with my employment contract, is it possible to have someone review it?


Kudos to you for the long service you have given your employer. Your disappointment in missing out on a pay rise when your job-share colleague received one is understandable.

But the Employment Relations Service is correct, general pay increases are a thing of the past.

When you were employed 12 years ago "take it or leave it" employment contract offers were common under the Employment Contracts Act 1991.

The Employment Relationships Act 2000 has changed this aspect of employment and now the parties to an employment agreement usually consult over the terms and conditions before the employee starts work.

Any employment advocate will review your employment contract for a fee. Alternatively, you could take your employment contract to your local community advice centre and ask the legal adviser to look over it.

A review of your employment contract is unlikely to solve your problems, so you should try to negotiate better wages with your employer if that is possible. The way to do this is to put forward a reasonable business case for the proposed wage increase.

If your negotiations are not successful you may have to consider a change in employment.

Employment Relations

Employment Relations Service

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