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Employer caught out by oral employment agreement
All individual employment agreements must be in writing. The Court of Appeal has recently held that this does not mean that individual employment agreements that are not in writing are not valid. Terms of the employment agreement that are agreed by the parties but not reduced to writing can still be enforced.
However, proving that the terms of an agreement have been agreed between the parties may be very difficult. The best way to avoid these problems and to comply with the law is to put the agreement in writing and have it signed by both parties.
All agreements must specify:
- The names of the employee and employer.
- Where the work is to be performed.
- The hours of work.
- The employee’s pay.
- The services available to resolve disputes.
- The 90 day time limit for personal grievances.
- The clause specifying time and a half and a day in lieu where an employee has to work on a public holiday.
- The clause dealing with negotiations with a new employer if the business is restructured or sold
If you leave these clauses out you will get whatever the Employment Relations Authority decides is reasonable (which is likely to be different to what you would have agreed to) and potentially a penalty and damages for breaching the Act.
There are many other matters which you may want to cover in an agreement such as confidentiality, holidays, sick leave, obtaining independent advice and the power to suspend pending a disciplinary investigation.
If you leave those matters out of the agreement then they cannot be enforced by the employer but an employee will still get their minimum requirements under the law as to holidays and sick leave.
A signed copy of the employment agreement must be given to the employee and a copy kept by the employer on their file. In addition the employer must also keep on file a copy of every draft agreement given to the employee to consider.