Employment arrangements

Welcome to the July newsletter.

We are delighted to welcome Bonnie Mitchell to the HealthyPractice team.  Bonnie joined us on 20 June and is looking forward to answering your calls and emails.  Bonnie comes to us with a strong background in all areas of human resources and will be developing her website content management skills.

This month we are looking at the different types of employment arrangements. It is a legislative requirement that all employees have a written employment agreement and there are certain clauses that must be included in it. Our sample templates are regularly updated in line with legislation changes and precedents set by case law – we recommend you download a fresh version every time you complete a new agreement.

For general medical practice, if your practice is party to the PHC MECA, your union members are covered by the terms of the collective agreements. If you are uncertain what type of contract your staff should be on, please contact us for advice at business@mas.co.nz

Permanent employees

This is the most common arrangement and includes both full time and part-time employees. These employees will work for you until they resign, retire or their employment is ended following a disciplinary or restructure/redundancy process, as outlined in their employment agreement.

If you have fewer than 20 staff, and you haven’t employed this person before, you can include a 90-day trial period.  This should be negotiated with the intended employee, there must be a clause in the employment agreement and the trial period should also be detailed in the letter of offer.  The notice period in the 90-day trial period can be shorter than the notice period in the termination clauses.

They receive all the benefits of the Holidays Act – a minimum of four weeks annual leave after 12 months continuous employment, and ten days sick leave/year, bereavement leave, domestic leave after 6 months continuous employment.

Casual employees

A casual employee is one you call on an as needed basis to cover leave or if you require some short-term cover.  There is no intention that this will be an ongoing employment relationship.  You should use a casual employment agreement for these employees.

Because each day they work is a separate engagement, holiday pay needs to be paid with their pay, for the days they work and does not accrue as it does for other employees.

There are some occasions when a casual employee might be entitled to sick leave, under the Holidays Act 2003, all employees (including part-time and casuals) are entitled to 10 days’ paid sick leave each year if they have either:

• worked continuously for 6 months, or
• over a period of 6 months worked 10 hours per week on average, and at least 1 hour each week or 40 hours each month during that period.

The pattern of work or how the offer of work is worded will determine whether they would be entitled to any public holidays that fall within the period they are employed.

You should watch the pattern of work to make sure that what was originally a casual appointment hasn’t morphed into a permanent part-time role.

Fixed term employees

These employees come to work for you for a fixed period for a particular reason.  There must be a genuine reason for using a fixed term.

Examples of genuine reasons are:

• A particular project, e.g. installation of a new IT system; updating records/review of administrative processes.
• Instituting change, e.g. a restructuring process.
• Absences of full-time employees, e.g. covering for a long illness, parental leave, extended leave.

Genuine reasons do not include:

• A desire on your part to see if the employee is the right person/has the right skills for the job;
• To get around the requirements of the law in relation to termination of employment.

Before you enter into a fixed term agreement you must, as well as needing genuine reasons (see above), you must advise the employee of when or how their employment will end and the reasons for this.

The fixed term may end in one of three ways:

• The close of a specified date or period (self-explanatory);
• On the occurrence of a specified event, for instance when your employee returns from parental leave;
• At the conclusion of a specified project, for instance when your new IT system is installed.

If you are using a fixed term agreement to cover parental leave, ensure that the notice period within the IEA matches the requirements under the Parental Leave and Employment Act 1987 which allows employees to return to work with 21 days’ notice under certain circumstances.