What Should I Look for When Reviewing a New Zealand Employment Agreement?

When you are reviewing an employment agreement for employees it can often be overwhelming. As a legal contract, employment agreements can contain a large number of different clauses and wordy language. This means it can be tough to know what to look for. This article will set out a few things you should look out for in an employment agreement.

What Is The Type of Employment?

It is important to identify what kind of employment your business is offering. Most employment agreements will be for permanent employment, either full-time or part-time. However, there are other kinds of employment to be aware of and to check for.

If the contract is for a fixed-term agreement, you should be able to see the reason for the fixed-term and the date or point at which the fixed-term is over. This is particularly important to note as the employee’s employment will cease altogether on that date.

Alternatively, the contract could set out a casual employment agreement. This should be quite obvious, as the agreement:

• will not set out regular hours;
• should specify the nature of the casual arrangement;
• how the employee will be offered work; and
• that they do not have to accept those offers.

All types of employment will give the employee a set of employment rights. However, it can be an issue if the employee is expecting a permanent position, but are not offered that. This is important to clarify before signing.

What Are The Expectations In Terms of Hours?

The employment agreement should set out the hours the employee agrees to work, or at least indicate what a typical working week will look like. This is particularly important for part-time employees, who need to check that the number of hours they are being offered is the same number that they thought they were agreeing to.

You may also want to check the start and finish times for the employee’s role and the days they will be expected to work.

Is There A Trial Period or Probationary Period?

One thing that you will want to be aware of as an employer is whether the employee will be under a trial period or a probationary period in their first few months in the new job. Ideally, this would already have been discussed with the employee at the point they receive an employment agreement. No matter what, if a trial or probationary period will apply, it must be in the employment agreement, so it is important to check for.

A legitimate trial period would give you as the employer the ability to dismiss the employee without cause within a certain period of time up to three months.

For example, this means terminating someone’s employment without a process around poor performance or any misconduct.

Is There A Restraint of Trade?

You should also check whether the employee will be under a restraint of trade in their new role. There are two kinds of restraints of trade to be aware of:

• non-competition clauses, which would prevent the employee from working in the same field as your business, and
• non-solicitation clauses, where the employee would be allowed to take another job in the same or similar industry as your business but they would be restricted from contacting your business’ clients

Key Takeaways

There are a few key things to look for when reviewing a possible employment agreement. You should check the fundamentals of the agreement, like what kind of employment arrangement it is (permanent, fixed-term or casual) and the hours of work. You should also check things which may affect the employee’s role and post-role obligations, like whether there is a trial period, and any restraints of trade. If you need further assistance with reviewing an employment agreement, contact LegalVision’s employment lawyers on 0800 005 570, or complete the form on this page.

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