An employment agreement is an essential document between the employer and the employee. They set up the fundamental terms and conditions of the employment relationship. Employers need to ensure they get the agreements right.
All employment agreements should be in writing and they must contain all of the following clauses (see s 65 of the Employment Relations Act 2000):
- Names of the employee and the employer concerned
- A description of the work to be performed by the employee
- The location of the place of work
- The hours to be worked
- The wage or salary payable to the employee
- An explanation in plain language of how to resolve any employment relationship dispute, including a reference to the 90 day period for raising personal grievances under section 114.
All employment agreements must be signed before an employee starts work.
Certain legal entitlements (such as public holidays, annual leave and sick leave) do not need to be written into the employment agreement. However, it is useful to include them in the agreement so that employees know what their entitlements are.
Any changes to an employee’s minimum rights should also be included in the agreement. For example, if an employee is entitled to more than the current statutory minimum of 5 sick days.