Having a properly drafted employment agreement is not only required by the law but is highly recommended by our firm. This article explains employment agreements in a little bit more detail and some of the pitfalls to be wary of.
by Owen Paulsen
The Importance of Employment Agreements
While most employers seem to be aware of their obligation under the Employment Relations Act 2000 (the “Act”) to provide their employees with a written employment agreement, some employers are still neglecting to do so. Not only is this a breach of the employer’s statutory obligations, but it also greatly increases the risk of employment relationship problems and employee performance issues occurring.
What we see even more frequently however is employment agreements that have been drafted by the employer themselves or have been provided to them by third parties. These agreements sometimes do not comply with the requirements outlined in the Act. More significantly, even where these agreements do comply with the Act, they frequently leave key areas unclear or fail to protect the employer’s interests adequately.
While we understand employers’ desire to minimise expenditure during the set-up phase of their businesses, it is crucial to consider the ultimate cost of not investing in comprehensive employment agreements and policies and procedures. This is because agreements that are non-compliant or fail to address certain situations often contribute to the occurrence of employment relationship problems. These problems often culminate in personal grievances being raised which can be time consuming and expensive to resolve. More often, the resolution of personal grievances will require mediation, and/or litigation, and even where the employer is successful it is likely to have incurred legal fees, stress and decreased productivity.
Our employment team is more than happy to discuss the particular needs of your business and to assist with the tailoring of an employment agreement to best meet those needs. Likewise, we can assist with the implementation of policies and procedures to minimise risk and maximise efficiency and thus contribute to the success of your business.
