1. Who is an employee and who is not?

It is important to be clear about whether your employment relationship is an "employment relationship" or some other form of relationship. This is because the law for employer-employee relationships is different from the law for other types of relationships.

An employee is:

Anyone who has agreed to be employed, under a contract of service, to work for some form of payment. This can include wages, salary, commission and piece rates.

This includes:

• homeworkers
• people who have been offered and accepted a job
• fixed-term and seasonal employees
• casual and part-time employees
• probationary and trial employees. 

An employee is not:

• a self-employed or independent contractor
• a sharemilker or a real estate agent whose agreement says they are an independent contractor
• a volunteer who does not receive a reward for working. 

If in your industry you regularly call people by a different title, e.g. temporary rather than fixed-term, it still does not change their status as an employee.

2. Can I offer a fixed-term agreement to a new employee?

Yes, as long as you have a genuine reason to offer a fixed term . You must explain this to the employee at the outset and set out, in the employment agreement, how the employment will end and why. A fixed-term agreement cannot be used simply to make it easier to get rid of someone without using normal disciplinary procedures.

3. Can I offer a new employee a trial or probationary period?

You must make this clear to the employee in their written employment agreement. During the trial period you must actively 'coach' the employee so that they can reasonably know your performance expectations and receive adequate training to try to meet them. Also, if the trial is not successful, you are still required to go through proper performance management and exit/termination procedures. 

4. Can I still engage contractors?

Yes, as long as it is a genuine contracting relationship and the contractor is happy to accept the contract. If the contractor accepts the contract but later considers that the relationship is in fact an employment relationship they should discuss the matter with you, and it would be advisable to seek advice at that stage. If they remain unhappy with the contract relationship it is possible for them to ask the Employment Relations Authority to determine whether they are a genuine contractor or an employee. The Authority is able to look at the real nature of the relationship and may rule on its status. How you set the pay and conditions of employees depends on the circumstances in the workplace and the wishes of yourself and your employees.

5. How do I manage employment agreements when employing new employees?

An employer and an employee have an "employment relationship". This is sometimes called a contract of service. The Employment Relations Act 2000 sets out most of the rules for forming an employment relationship, through an employment agreement. The rules differ depending on the circumstances.

You and your employees have the choice of entering into: 

• Collective Agreements - which are negotiated in good faith between an employer/employers and a registered union/unions on behalf of their members in the workplace. You may negotiate separate extra items with employees who are part of the collective agreement, as long as they are not inconsistent with (i.e. less favourable than) the agreement. 
• Individual Employment Agreements - that are negotiated between the employer and individual employees, where good faith principles should also apply. 

You must not discourage employees from being covered by a collective agreement.

All agreements must be in writing and must not include wage and leave provisions less favourable than the minimum wage and leave provisions covered later in this text. 

6. What must I do when bargaining with individual employees?

Whenever you are forming or varying and individual employment agreement or negotiating additional terms to a collective agreement (in one or other of the situations set out below) you must bargain with the employee in good faith. This involves:

• giving the employee a copy of the proposed agreement or proposed variation or additional terms;
• informing the employee of their right to seek advice and giving them a reasonable opportunity to do so;
• considering and responding to issues that the employee raises.

In following this process you should put yourself in a position to assure yourself that the employee understands the terms of the employment agreement. Particular care should be taken if the employee is young or in emotional distress. Care should also be taken if the employee has a mental, educational or communication disability. Should it later be found that an agreement was unfairly imposed, it can be cancelled or varied by the Employment Relations Authority.