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Employment Agreements, Advice & Dispute  Resolution

Employment and Independent Contractors
Before you hire someone, it is vital to know whether the worker should be hired as an employee or as an independent contractor.  There are substantial risks if you get it wrong! For example, if the worker should have been an employee (but you hired him or her as a contractor) then you may be liable to the Inland Revenue Department for unpaid PAYE.  You may also become liable to the worker for unpaid sick leave, bereavement leave, KiwiSaver and holiday pay if the worker brings a personal grievance against you.  There are several tests the courts use to determine whether a worker is for all intents and purposes, an employee or an independent contractor.  We recommend you seek legal advice before hiring someone, if you are unsure in anyway as to whether the worker is an employee or contractor.
 
Employment Agreements
Employers beware!  In 2011 the penalty for corporate employers not having a written employment agreement in place for their employees was increased to up to $20,000.  As an employer, you need to make sure you have a ‘fit for purpose’ employment agreement i.e. a fixed term, casual or permanent agreement.    A well- drafted employment agreement that records the rights and obligations of both parties is likely to reduce the risk of problems occurring later down the track.
 
Trial Periods
90-day trial periods allow employers to dismiss an employee without that employee being able to raise a personal grievance in respect of that dismissal.  However, there are still hoops to jump through!  The wording of the trial period in the employment agreement must strictly comply with the terms of the Employment Relations Act 2000 and there is a proper process that must be followed when implementing the dismissal.  This includes ensuring the employee signs the employment agreement (with the trial period in it) prior to starting work.  Getting the process wrong, or having the wrong wording in your trial period clause, can mean that the employee is able to bring a personal grievance against you for unjustified dismissal.  We recommend you seek legal advice prior to dismissing an employee pursuant to the trial period.
 
Restraint of Trade, Confidentiality and Intellectual Property Protection
One of the most common ways of losing your valuable confidential information and intellectual property is by your employees taking that information with them when they leave your employment.   Your employment agreement should specifically deal with the issue of intellectual property – i.e. who owns it, who creates it, and what happens to it if the employee leaves.   It may be also be crucial to have a well-drafted restraint of trade clause in the agreement to (a) restrict the employee from taking your other staff and your clients with them when they leave; and (b) restrict the employee from working for a competing business for a particular length of time.   
 
Performance Management Issues
For most businesses, success is only as good as the people you employ.  It can be extremely stressful when someone you are hiring (and paying!) is not contributing to your business. It is becoming increasingly common for employers to take action quickly in these circumstances, and to implement comprehensive processes for managing employee under-performance.  In many cases, these processes are well thought out, implemented properly, and help the employee to improve their performance.  However, in some situations such processes can be too complex and/or not properly implemented – and this can give rise to unnecessary and unwanted employment issues, including personal grievances.  To discuss performance management issues, contact one of our employment specialists.  
 
Restructuring and Redundancy
An employer is entitled to restructure their business or make a position redundant so long as there is a valid commercial reason for doing so.  Employers looking to restructure or embark on a redundancy process should be wary of the procedure they chose to adopt, as the procedure (as well as their reasons) may be scrutinised and may form the basis for a claim of unjustified dismissal.  If you have any queries regarding restructuring or redundancies, contact one of our employment specialists.
 
Personal Grievances and Dispute Resolution
Employment relationship problems can be extremely difficult and stressful for both parties concerned, and can include breaches of employment agreements, breaches of the duty of good faith, issues relating to statutory entitlements, and personal grievances.  The Employment Relations Act 2000 gives all employees the right to pursue a personal grievance if they have any of the following complaints: unjustified dismissal; unjustified disadvantage; discrimination; harassment; duress; and breaches in restructuring protections for special categories of employees.  If you would like more information on personal grievances (including how to raise a personal grievance against your employer, or how to defend a personal grievance) contact one of our employment specialists as soon as possible (there is a time period within which a personal grievance must be raised).

#box-newsNews & Updates hide

Health and Safety Reform Bill 09/07/2014
The Health and Safety Reform Bill was introduced to Parliament on 10 March 2014. The Select Committee’s report is due out on 13 September and... read more more
Big Employment Law Changes to take effect from 1 April 2011 22/03/2011
6 Key Changes The 90 day trial period will be extended to all businesses, not just those with fewer than 20 employees; Changes... read more more
Trial Periods 06/12/2010
The controversial 90 day “trial periods” which the Government introduced in March 2009 are now here to stay. “Trial periods” allow... read more more

#box-resourceResources & Articleshide

Think an employee is stealing? Employers pay $10,000 for not investigating thoroughly!
Think an employee is stealing?  Employers pay $10,000 for not investigating thoroughly! A recent decision by the Employment Relations... read more more
Request for Facebook Login Information - Employers Going too Far?
You may have been astonished to read in the news recently that employers in the USA are asking potential (and sometimes current) employees... read more more
90 Day Trial Period – Further Guidance for Employers
Many employers are still unaware of how 90 day trial periods must be implemented in order for employers to effectively dismiss employees within... read more more