- you need to have genuine reasons based on reasonable grounds for specifying that employment is to be for a fixed term; and
- you must advise an employee of when or how the employment will end and the reason for the employment ending in that way before entering into an employment agreement.
A recent Employment Court decision has clarified that it is very important that an employer follow all the requirements in the Act or it will be found that an employee has been unjustifiably dismissed.
You need to ensure that your employment agreement not only sets out a genuine reason for the fixed term i.e. at the commencement of the employment and that that genuine reason is communicated clearly to the employee.
The safest way to ensure that is to make sure that your employment agreement sets out clearly why the employment is for a fixed term, the length of the employment and what will bring the employment agreement to an end.
In Clark v Norske Skog Tasman Limited Judge Colgin found that the employer had genuine reasons for taking an employee on for a fixed term.
However the Court found that the employer had not advised the employee why the agreement was for a fixed term in an adequate way.
The result was that the employee was reinstated, despite his position already being filled. The Judge left it to the parties to sort out the question of lost remuneration and also indicated that Mr Clark would be entitled to a modest award for non economic consequences.
This case underlines, yet again, the importance of having a written employment agreement that meets all the requirements of the Employment Relations Act 2000.
January 2004
Mary-Jane Thomas is head of Preston Russell's employment law team. Contact her by clicking here
