In the past weeks, we have noticed an increase in people issues that have been more complex or costly to resolve because the employment agreement lacked protections or was simply not compliant.
The employment agreement is what sets the basis for your employment relationships and is a legal contract. As your business and operations develop over time, and as legislation changes, the terms and conditions of agreements could be affected. As with amending the contents of your insurance policies or updating wills, employment agreements also require maintenance.
When to check your current agreements or templates:
- Changes to a person’s role or individual terms – with the most common changes being job titles, substantive changes to duties, location of work, hours of work and pay and benefits.
- Changes in legislation - which impact on the terms and conditions of any or all of your employees, for example the recent change to extend timescales for raising claims of sexual harassment, and 90-day trial periods being made available to all employers.
- Periodic best practice reviews - regardless of specific changes in individual terms or legislation, it’s wise to periodically review your templates at least every 2-3 years as case law and enhancement in employment practices also continue to develop.
If updates are required
If changes are required or could be beneficial, the next question will be to decide if you will make changes for new offers only or if updates are needed for current employees too. If changes are needed the options are:
- Varying existing Terms and Conditions: This is an amendment to specific terms and conditions of employment. It involves both parties agreeing to the specified changes. All other terms and conditions would remain unchanged.
- Updating Terms and Conditions: This is an issue of a new employment agreement that will replace all previous terms and conditions.
Making changes to terms of employment can be unsettling so being able to explain what is changing and why is key. If the changes being made are about how employment terms operate in practice, then this can be done in a less formal way like email. This is a good option for situations such as moving a work-from-home day from Monday to Friday. In this case, there is no change to place of work, hours of work or days of work, just the application of how those hours are worked in practice.
Additional considerations
Once terms and conditions are agreed and aligned with current legislation and best practice, the last hurdle is looking at how you use them operationally. The most common areas to consider are:
- Updating holiday and leave entitlements: Ensuring your payroll person is making the necessary changes. If days and/or hours of work have changed, this normally requires a manual adjustment in payroll software. Liabilities for any errors is currently 6 years and the onus is on the employer to make sure entitlements and payments are correct.
- Updating payroll, user permissions/IT systems, structure charts, phone lists, websites and email signatures for any changes in job titles and reporting lines.
- Making sure your new starter was given a copy of the employment agreement with enough time for them to get advice, and that you received it from your new starter signed before employment commenced if you are including a statutory 90-day trial period as a term of the offer. How that trial period provision is then applied if needed has another set of checks, so it is recommended that advice is sought when relying on this provision to help mitigate claims of unjustified action or disadvantage.
Ultimately your employment agreement is a legal contract that underpins your employment relationship. If you want to check the currency of your templates or if you need help with updating current agreements, email the Grow HR team.