Are You Starting a New Job? Understanding and Negotiating Your Employment Agreement

For most people, their job is a significant part of their life – therefore before signing a new Employment Agreement, you should ensure you are fully aware of what is and isn’t included, and how this could impact on you.

The benefit of getting a lawyer to look over a proposed employment agreement is to check that any terms and conditions verbally promised or agreed to are reflected in the agreement, whether there are any onerous or out of the ordinary obligations on you and assist you in negotiating amendments to the proposed agreement.
In our experience what is verbally offered is often not reflected in the employment agreement – for example items such as car parks, health insurance or bonus schemes. It is important that any key terms are recorded with enough specificity so that the agreement can be relied on at a later date if needed for enforcement purposes. Negotiating terms and conditions prior to starting a new job is far more straightforward than attempting to resolve a disagreement over your entitlements after being in a job for a number of months.

Given the recent law change we are seeing more and more agreements that have a 90 day trial period included. It is important that employees are aware of this clause and its possible consequences. Other terms and conditions that we can advise on are any terms which are particularly onerous for an employee or provide for out of the ordinary obligations. For example, restraints of trade preventing an employee from working with competitors, within a particular industry, geography or with specific customers or suppliers following resignation.

Whilst not front of mind when an employee first starts a role, restraints can be onerous and impact on an employee’s ability to find paid work within their desired industry. Your negotiating power is a lot stronger prior to the commencement of the relationship as compared to trying to the end of the relationship when you have or are looking to resign.

The common perception that restraints are not enforceable is incorrect. There is now a significant body of case law in which restraints are upheld by the Employment Relations Authority and Court. Furthermore, employers will fight to have restraints enforced. Therefore it is important that you understand and are comfortable with the scope and impact of any restraint before signing your proposed employment agreement.

Something else we have noticed given that a number of New Zealand companies are now owned by Australian entities, is that employment agreements prepared by companies with Australian ownership often either do not reflect the statutory minimum required in New Zealand law or include terms and conditions that are specific to the Australian working and/or legal environment. Depending on the nature of these, they may need to be amended prior to signing an agreement.

Finally, under employment legislation an employer is required to allow an employee to seek independent advice about an intended agreement and consider any issues that the employee raises in light of this. As well as pointing out key terms and conditions that you should attempt to renegotiate a skilled Employment Lawyer can also provide you with advice on how to go about negotiating with your prospective employer.

Ensure you know what you are agreeing to before you sign – contact Employment Law expert Elizabeth Briggs by phone on 837 6889 or email elizabeth.briggs@smithpartners.co.nz

Employment Law – recent Hobbit amendment

Following the news that Warner Bros. Studios were considering pulling the Hobbit movie from production in New Zealand over fears about industrial action, the Government announced a new amendment to the Employment Relations Act 2000.

Alongside granting the filmmakers a $13 million marketing subsidy and $20 million dollar tax break, the government has amended laws around the distinction between independent contractors and employees.

GST Increase and Your Business

From 1 October 2010, the National Government increased GST (Goods and Services Tax) in New Zealand from 12.5% to 15% on all products.

By now, most businesses should have implemented the change and need to ensure all processes account for the new GST.

Buying a business

Buying an existing business is an important financial decision and should not be rushed. With assistance from your accountant and lawyer, you should carefully consider all aspects of the business purchase. Some of these considerations are listed below.

The sale and purchase agreement

A written agreement is recommended to prevent future confusion or disputes.
When you buy a business, you can use a standard business sale and purchase agreement (available from the Auckland District Law Society), write one yourself, or instruct your lawyer to write one.

Corporate Insolvency

Unfortunately, corporate insolvency or financial stress is fairly common in the business world, but being aware of the process and your rights and obligations can help ease the process.

When a business fails, the company either:

• goes into receivership
• enters a compromise with its creditors
• is put into liquidation.

Understanding Property Law

There are many aspects to property law that you may wish to consider. As with other aspects of law, this is one area where planning in advance can reap benefits:

Trusts

A trust is a written agreement between you and people you trust (the trustees). You appoint trustees to look after your assets and/or other personal affairs. The trustees hold the assets you have transferred into your trust on behalf of the beneficiaries.

Buying or selling a property?

Sale and purchase agreement is always used whenever you purchase or sell a house in New Zealand.

The most common ways people buy or sell houses are by auction, tender, negotiation, or fixed price. Sales can be made privately or with the assistance of a real estate agent.