It provides both the employee and the employer with some legal protection around their rights and responsibilities. Employment agreements outline what you expect from your employee and what they will get in return.
- The employment agreement is the key part of "making an offer" so is usually discussed with and presented to the successful applicant within a week of interviewing them.
- There are some essential items to include on an employment agreement and the more detail you include the better as it means there is no room for confusion. Learn more about what to include here.
- This is a legal document and you need to get it right, so use a template and fill in the details specific to your situation or use a farm people management consultant. The Ministry of Business, Innovation and Employment website has a free employment agreement builder and Federated Farmers sells farm specific employment agreements.
- Before any employee starts work they need a signed written employment agreement in place, ideally they should have 10 days to review it.
- Ensure you and your employee each have a signed copy of the employment agreement.
- Record any changes to terms and conditions that you and your employee agree on and make sure you record these as a variation to the employment agreement and put it on file.
- Maintain up-to-date employee files.
Quick Questions & Answers
What are the different types of employment agreement?
There are two main types of employment agreements (or contracts):
- Collective. This is negotiated with the union and applies to union members who meet the coverage clause.
- Individual. This is negotiated directly with the employee.
Within these two broad categories, there are three kinds of employment arrangement.
1. Permanent. The employment is ongoing and there is no end date. This includes:
- full time employment with regular hours,
- part time employment with regular hours,
- seasonal or set rosters.
2. Fixed term. The employee is employed for a specific period of time for a genuine reason e.g. to complete a particular project or to cover an employee on parental leave. Note that the dairy “season” of 1 June to 31 May measures a financial and production year. It does not mean dairy work is seasonal. Using this as a reason for a fixed term agreement is not appropriate.
Casual. The employee works from time-to-time, on an ‘as required’ basis. The employment should be genuinely casual. If a regular pattern of work develops, a new employment agreement should be issued which better reflects the real nature of the employment relationship.
How do I create an employment agreement?
Employment agreement templates are available from a number of sources, including:
Employers may wish to create their own employment agreement. It’s generally easier to start with a basic template then add and change clauses as appropriate. Please seek advice from a Farm People Management Consultant on the wording and content.
Do I have to renew a fixed term employee's contract at the end of the season?
If the fixed term employment is genuine, then you don’t have to renew the employee’s contract, even if the original reason for the fixed term has changed.
For instance, say you employed a fixed term employee to cover a staff member away on parental leave. At the end of the parental leave, the original employee decides not to return to work. You do not have to automatically offer the fixed term employee the permanent role.
However, an employment agreement can only be fixed term if it’s for a genuine reason e.g. to assist during the busy calving period or to cover another staff member on leave. The dairy “season” of 1 June to 31 May measures a financial and production year - it does not mean dairy work is seasonal. Using this as a reason for a fixed term agreement is not appropriate.
If the reason for the fixed term is not genuine, it’s likely you cannot enforce the end date specified in the employment agreement. By default the employment becomes permanent and the employee can reasonably expect to work next season.