The Ten Things You Must Include in an Employment Agreement

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Getting a new team member on board is exciting! An employment agreement is crucial for a great start to a long and healthy working relationship.  Every employee must have a written employment agreement. Failure to provide this may even result in a fine. But what do you need to include?

Here are the 10 things that must be included in an employment agreement:

  1. The names of the employer and the employee
  2. A description of the work to be performed
  3. An indication of the place of work
  4. The agreed hours or an indication of the hours that the employee will work, this includes agreement on any or all of the following: the number of hours, the start and finish times or the days of the week the employee will work.
  5. The wage rate or salary payable (must be equal or greater than the relevant minimum wage) and how it will be paid (if the employee won’t be paid in cash, this should be in the employment agreement or must be agreed in writing somewhere else.)
  6. A plain explanation of how to help resolve employment relationship problems including advice that personal grievances must be raised within 90 days
  7. A statement that the employee will get (at least) time-and-a-half payment for working on a public holiday
  8. For relevant employees, an employment protection provision to apply if the employer’s business is sold or transferred, or if the employee’s work is contracted out
  9. Any other matters agreed on, such as trial periods
  10. The nature of the employment if the employment is fixed-term

Some things (like 4 weeks’ annual holidays) do not need to be in the employment agreement but the employer must still provide them by law. It is advisable to have the time of the breaks in the employment contract. If an employee and employer agree to better terms and conditions than minimum rights contained in the Act, these should be recorded in the employment agreement.

An employment agreement can contain any other terms and conditions that the employee and employer have agreed to, for example, the notice period required for resignation and termination, a trial period provision, an availability provision, whether the employee can be made to work on a public holiday, or an annual closedown.

You may choose to include workplace policies and procedures or other documents. This will help if any questions or issues arise further down the track.

Important: If you are an employer with 19 or fewer employees and you want to employ a new employee on a trial period for the first 90 calendar days for their employment, be sure to have this included in the agreement and signed prior to the employee commencing any work on site.

Check out Employment New Zealand’s handy online tool:

https://eab.business.govt.nz/employmentagreementbuilder/startscreen/

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