Changing Employment Contracts in NZ: What You Need to Know
Employment contracts form the foundation of the relationship between employers and employees. They outline the terms and conditions of employment, and can cover everything from pay rates to hours of work, notice periods, and leave entitlements. However, over time, circumstances may change, and the terms of an employment contract may no longer be suitable for both parties.
In New Zealand, employers and employees can change employment contracts in various ways. However, it`s important to follow the right processes to ensure compliance with employment law and avoid any legal disputes. Here`s what you need to know:
Consent from both parties
Changing the terms of an employment contract requires consent from both the employer and the employee. Any changes must be mutually agreed upon, and the employee must be given sufficient time to consider the proposal. Employers should provide the employee with a written variation to the existing employment agreement outlining the proposed changes and their implications.
Consideration
For any changes to be legally binding, there must be `consideration` from both parties. In other words, both the employer and the employee must receive some benefit in exchange for agreeing to the changes. This could include increased pay, additional benefits, or a change in working conditions. If there is no consideration, the changes may be unenforceable.
Record keeping
Employers should keep a record of any changes made to an employment contract. This includes the original employment agreement, any variations or amendments, and any written consent or agreement between the parties. These records should be kept for at least six years and be made available to employees if requested.
Collective agreements
If an employee is covered by a collective agreement, any changes to their employment contract must be made through the collective bargaining process. The employer must negotiate with the employee`s union to agree on any changes, and the employee`s consent is still required for the variation to be legally binding.
Redundancy
If an employer is proposing changes to an employment contract that may result in redundancy for the employee, specific rules apply. The employer must follow a fair and reasonable consultation process, including providing affected employees with all the relevant information and giving them an opportunity to provide feedback. The employer must also consider alternative options before making any redundancies.
Final thoughts
Changing employment contracts in New Zealand is possible, but it`s important to follow the right processes. Employers should communicate any proposed changes clearly and transparently and obtain consent from employees. If you`re unsure about the requirements for varying an employment contract, seek legal advice to ensure compliance with employment law.