|
There may come a time in the term of an employment agreement where the parties intentions are no longer reflected and it is necessary to vary one or more of the terms.
In the first instance the parties to the agreement must consider whether a separate variation agreement is required or whether the changes can be achieved through the original agreement. An employment agreement may provide for certain matters to be varied in given situations and provide mechanisms by which this may be achieved, for example, by one party providing written notice to the other, to which the other then agrees, or not. In general, if a number of variations are to be made, or the term to be varied is a key one (for example, hours of work), it is advisable to create a new agreement to reflect the agreed variations.
If a separate variation agreement is required, it is important to follow the procedures in the original agreement, if there are any. Most agreements explicitly require the variation to be in writing and to be agreed upon and signed by all the parties. Even if the written agreement does not explicitly include this, the Employment Relations Act 2000 effectively requires that such variations be put in writing with the opportunity for an employee to take independent advice on the proposed variation. Preferably any variation should be signed by all the parties.
The following are guidelines as to provisions that might be included in a variation agreement. These guidelines are for varying Individual Employment Agreements, as the mechanisms for varying Collective Agreements should be set out in the original collective agreement, and people should refer to these. The following guidelines are not legal advice.
What may be included in a variation?
Reference to parties and original agreement – Although these should be clear, to reduce uncertainty it is advisable to state the names of the parties, with reference to the beginning and end dates of the original agreement.
Eg This is an amendment to the employment agreement between [enter employer's name] ('the Employer') and [enter employee's name] ('the Employee') dated [enter date of original agreement].
Duration of variation - It is important to state the date on which the variation begins and the date or event on which it ends. A variation may continue for the full term of the original agreement or may be for a specific period or piece of work only.
Eg This variation takes effect from [enter variation start date] and ceases to be in force on [enter variation end date]. After [enter variation end date], the original agreement [enter original agreement name] resumes force.
Inconsistencies – It should be clear which document (the original agreement or the variation) prevails; should any inconsistencies between the two occur.
Eg This variation replaces any terms in the original agreement that are inconsistent with or contradict this variation.
Terms and Conditions – The variation must be clear as to which terms and conditions are being amended, deleted, or added to the original agreement, and whether these changes are limited to a particular workplace or task.
Eg The Employee and Employer agree the following:
1 "The [enter name of original agreement] is varied by deleting clause [enter number of clause] and replacing it with the following clause: "[wording of clause to be inserted including clause number]"".
2 "The [enter name of original agreement] is varied by amending clause [enter number of clause] to state: “For the period [enter dates of variation], remuneration of [enter remuneration] shall be paid by [enter the employer] to [enter the employee/s]”.
3 "This variation is limited to [enter particular task] and will apply for the duration of the undertaking of [enter particular task].”
4 “This variation is limited to work undertaken at [enter particular workplace site]. Work undertaken at all other sites remains covered by the [enter name of original agreement].”
It is also advisable to make clear that the terms and conditions of the original agreement which have not been varied remain active and continue to apply for the balance of the original agreement.
Eg All terms of employment contained in the [enter original agreement] agreement, which have not been varied by this agreement, remain active and continue to apply for the balance of that agreement
Independent Advice - It is best practice to advise employees of their entitlement to seek independent advice about any amendment, and a reasonable opportunity to seek that advice. It is good to include a clause in the variation outlining this opportunity.
Eg You (the employee) should seek independent advice before accepting this variation. If you have questions with regard to the terms and conditions included in the variation please feel free to discuss your questions with [enter name of employer].
Good Faith - The Employment Relations Act 2000 has “good faith” as its central principle. This means that employers, employees and unions must deal with one another honestly and openly. You might like to include a clause expressing that the employer will act in good faith in accordance with the legislation.
Eg At all times [enter the employer] will act in good faith in accordance with existing New Zealand legislation.
Signature of the parties – It is advisable to include the signatures of the employer and the employee/s.
Date of variation – It is good practice to identify the date on which the parties have signed the variation.
back to top
This page was last
updated on:
24-Sep-2009
and is current.
|
