As part of the recent suite of amendments to the Employment Relations Act 2000, from 1 July 2011 employers must keep a signed copy of the employment agreement or the current terms and conditions of employment for all employees (including casuals and fixed-term employees). Employers must retain the "intended agreement" even if the employee has not signed it or agreed to any of the terms and conditions specified. However, an unsigned employment agreement will not comprise an employee's terms and conditions.

The requirement to retain a signed copy of the employment agreement applies to all employees regardless of when they were employed, that is, irrespective of whether the individual terms and conditions of employment were provided or agreed to, before or after 1 July 2011. It also applies to any subsequent variations to an employee's terms and conditions.

Right to request a copy

An employee has the right to request a copy of their individual employment agreement or terms and conditions and their employer must, as soon as reasonably practicable, provide the employee with a copy.

From 1 July 2011 penalties will apply

Employers in breach of employment agreement requirements may be liable to a penalty imposed by the Employment Relations Authority if proceedings are brought by a Labour Inspector. However, before an action can be brought, a Labour Inspector must give the employer written notice of the breach and seven working days to remedy the breach.

The maximum penalties for failure to comply with any aspect of the legislation increased on 1 April 2011 to $10,000 for individuals and $20,000 for companies.

Compulsory clauses

Individual employment agreements must contain certain provisions by law, for example, salary or wage details, the employee's position and duties, where and when the work is to be performed, and an Employee Protection Provision (EPP).

90 day trial or probationary periods

If a 90 day trial period or a probationary period has been agreed to, details of the arrangement must also be in the written employment agreement and the agreement must be signed before the employment begins, otherwise the trial or probationary period will not be enforceable.

Next steps

While most employers do retain copies of their employees' signed employment agreements, now is the time to review your employee files. If there isn't a copy of a signed employment agreement on file, then employers need to ensure that a copy is arranged.

It is good practice to put a copy of the employment agreement in the employee's personal file, as employees have the right to access it under the Employment Relations Act 2000 and the Privacy Act 1993.

Employers who have collective agreements in place will need to consider how they will deal with individuals who do not join the union at the expiry of the 30 days.

If you require any further information about employment agreement requirements (including any of the compulsory provisions), please do not hesitate to contact us.

Employers who have collective agreements in place will need to consider how they will deal with individuals who do not join the union at the expiry of the 30 days.