Rural employment agreements – more than just filling in the gaps

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The Employment Relations Act 2000 requires that all employees have a written agreement of employment. 

Failure to provide your employee with a written employment agreement is a breach of the act and can form the basis of a personal grievance in itself.  It is therefore important to get the terms of the employment relationship agreed and right from the start.

There are standard provisions that are required under statute and best practice. However some aspects of the rural environment are unique and require particular provisions within the employment agreement to be clear.

Factors such as seasonality of work, inconsistent hours (peak periods of high intensity followed by slower periods of low intensity), service tenancies, high risk workplaces, animal welfare issues and relatively high rates of work-related injuries all provide a context in which lawyers, for employers and employees, should be consulted. 

Employers must remember that the employee has the right to seek independent advice in relation to the agreement prior to signing it.

Key aspects to take into consideration when preparing a rural employment agreement include:

  • Drug and alcohol policies: this is a high risk area on the farm, particularly around the use of heavy machinery and animals. A policy regarding outcomes for use of drugs and alcohol in the workplace together with appropriate testing provisions should be included in a blanket policy for all employees to consent to and abide by.

  • OSH: it is widely known that employers have a statutory duty to ensure a healthy and safe environment for all employees and visitors at the workplace. This is complicated in the rural environment which involves vast areas with little supervision, heavy and dangerous machinery, long tiring working days, unpredictable animals and even children.
  • ACC and medical incapacity: long term injuries can be detrimental to a business when an employer is unable to replace an injured worker and either has to fill the role themselves or pay a high wage to a casual worker.  Termination for medical incapacity or injury should be provided for.
  • Tenancy: accommodation provided to employees is considered a service tenancy – once employment is terminated so is the tenancy.  However, service tenancies are still governed by the Residential Tenancies Act so the same statutory protections and notice periods apply. Tax law means that accommodation on the farm cannot be provided free as part of an employee’s employment package.  Employers must now charge rent for the farm accommodation.
  • 90-day trial periods: of vital importance in this respect is that the employment agreement containing the trial period provision MUST be signed before the employee even steps onto the workplace.

A word of warning against the laissez faire use of standard agreements.  While agreements such as the standard Federated Farmers precedent provide a very good starting point, remember that is all it is.  A starting point. Such agreements often have clauses providing various options and if not completed properly a can of worms may be what is on the table should the employment relationship run into difficulties.

Concerns or questions over employment relationships generally escalate to disputes where there is either no written agreement at all or the written agreement is unclear, vague or incomplete. Disputes may be able to be avoided if advice as to the preparation, negotiation and implementation of employment agreements is discussed with your lawyer. 

The rural law team at WRMK recognises the nuances of farm employment agreements and can work with you to put in place employment agreements that are effective and reasonable.  If you have any queries or questions give one of the team a call.