The importance of a written employment agreement

A frequent problem I see when dealing with personal grievances is the lack of a written employment agreement.

Under s 65(1)(a) of the ERA 2000 an individual employment agreement must be in writing. If an employer has failed to provide a written employment agreement, the court may resolve any disputed claim under an employment agreement in favour of the employee. Claims for a personal grievance alleging breach of an unwritten employment agreement are often made with an application for penalty for breach of the statute.   In Park v Brand Works Ltd the employer was ordered to pay a penalty of $2,500 (payable entirely to the employee) for failing to provide a written employment agreement.  The maximum fine is $10,000.

An employer is also required to retain either a signed copy of an employee’s individual employment agreement or the current terms and conditions that make up the employee’s individual terms and conditions of employment. A failure to do so may result in a penalty being imposed by the Authority.

Paperwork is very important – It can have serious financial consequences. Even if you are employing a “friend” ensure you get the paperwork done.  It will drastically reduce your exposure to a claim if things go wrong.