Employment agreements, who needs ‘em?
Employment agreements are one of those topics that immediately makes most people switch off and play their internal background music (sub in your own listening but not really filler here!). This would be understandable, if it weren’t so…well… important. Bear with me – it might save you hassle in the future!
Employment agreements can be negotiated by a union (collective agreements or CA’s) on behalf of employees, or they can be individually negotiated (Individual Employment Agreements or IEAS). They represent legally binding and enforceable rights and responsibilities for employees and employers. This blog really speaks to work environments without a collective agreement as this is where the majority of issues with employment agreements occur.
It is a legal requirement to have a written employment agreement, for every type of employment- i.e. casual, fixed term, temporary, permanent etc. This agreement must adhere, at least, to minimum standards of employment as set out in law. It’s surprising how little this is actually known across Aotearoa. Perhaps though this speaks to the lack of availability of education which supports people to understand and assert their legal and political rights.
It could be easy to assume that where no written employment agreement exists (or the agreement itself breaches minimums required in law) it must be because the employer is bad. This may be the case in some instances of course, but I have been surprised lately by the number of objectively good employers who are in breach. By good I mean businesses who consider themselves (and are considered by their employees) to be modern, fair and just environments. The majority of these employers are in breach because they don’t consider it necessary - for a range of reasons - to have an agreement (or a compliant one).
Some of the arguments I have heard on this are:
A written agreement limits flexibility
We are a good employer, with no issues, so we don’t need one
Our agreement doesn’t need to meet that particular minimum employment standard as we have better than minimum standards for another part of the agreement
Its too hard and complicated to do one
Putting aside the fact that employers are breaking the law by not providing a legally compliant employment agreement and could be fined I want to explore the other arguments.
A written agreement limits flexibility
A good employment agreement can reflect any decisions about flexibility that are agreed between an employer and employee, as long as it is not offering something less than what is required by law. You can negotiate, for example, flexible arrangements around start and finish times, hours of work (including variable hours), location of work, pay rates, sick and annual leave to name only a few. Some key risks with not having a written agreement in this situation are:
the employer and employee having different understandings of what was agreed
the agreement being changed by one party and there being no record of what was agreed to refer back to.
We are a good employer with no issues
It’s great if you have a good workplace culture and all is going well! On the other hand, an employment agreement should not be viewed as document only for disasters or bad times. An employment agreement is a written commitment to the mutual, agreed rights and responsibilities of the employer and employee. As such an IEA can be steeped in the values and kaupapa of your organisation and be part of reflecting your commitments to each other. To have this clearly articulated protects both parties and can be a useful demonstration of your organisations’ culture when recruiting new employees.
Our agreement doesn’t need to meet that particular minimum employment standard
Its important here to recognise that employment rights are human rights. Like all human rights, one cannot be traded off against another. Minimum standards of employment are a framework that knit together to form a safety net for our working environments. If one stitch is dropped the fabric of the whole framework is weakened.
It’s fantastic if you want to and can offer more than the minimum conditions to your employees. However, this cannot be at the expense of minimum standards in other areas. It is important to also remember that an employee cannot contract out of their minimum entitlements. For example, if an employer has agreed with an employee to reduce sick leave to 5 days per year (5 days less than statutory minimum) as they provide 5 weeks annual leave (1 week over statutory minimum) the employer is still legally obliged to provide 10 days sick leave.
Its too hard and complicated
Putting together a legal employment agreement does not need to be hard. In fact there are some awesome tools to help you build one quickly and easily like this one from Employment New Zealand . There is also lots of great advice and information on their main webpage here that you can read at your leisure for free.
If you want support to review and or recommend improvements your IEAS (and supporting workplace policies) I have expertise and experience that can help - get in touch with me at amy.ross@workethics.nz for a free initial half hour chat to see how I can assist.