Ensure employee agreements match intentions

Recent case law has highlighted the importance of maintaining employment agreements that accurately reflect the nature of the employment relationship and the hours worked by the employee. Supplying and retaining a signed copy of a comprehensive employment agreement for every employee is a legal requirement in New Zealand, and one that could protect you in the case of an employment dispute.

Fixed term agreements:

If you have employees on fixed term employment agreements, you will need to include in these a specific end date, or event, as well as genuine reasons (based on reasonable grounds) regarding why their role is fixed term only.

An example could be, “The position is fixed term to cover painting three apartment buildings. The reason that the employee is only required for this specific project it that there is insufficient work once this project is completed to justify continuing employment. The employment agreement will terminate in three months or earlier on completion of work” (supplied by Business.govt.nz).

A recent Employment Court case, Turner v Talley’s Group Ltd, highlighted the fact that if you don’t supply a genuine reason, such as the one above, and a clear end date, then your employee could be deemed permanent. The seasonal worker who was the plaintiff in this case was held to be permanent due to the absence in her employee agreement of any fixed term provision that complied with the provisions of the Employment Relations Act 2000.

Casual employment agreements:

Casual employees are those who genuinely work only on an intermittent or irregular basis. Irrespective of what the employment agreement stipulates, if an employee begins working on a regular basis, then they could become a part-time employee.

This was highlighted in the case Kate Fisher v Carrie O’Brien that went before the Employment Relations Authority (ERA). In this case the plaintiff was employed on a casual basis without any employment agreement. However, the ERA found that while she had started out as a casual employee, she had started to work more and more regular hours, transforming her into a part-time employee. This meant she could challenge her dismissal as unjustified.

Key HR Takeaway:

• Ensure that your intentions regarding a particular employee are carefully documented in their employee agreement.
• If you intend to hire someone on a fixed-term basis, make sure to include both genuine reasons for this and an end date in the employment agreement.
• Review the employment agreement from time to time to ensure that it still accurately reflects the reality of the current employment situation.