Business owners who do not have an allowance for force majeure in employment agreements moving forward would be wise to consider this now.

Contents

• Force majeure is not straightforward – there are strict and precise rulings around the use of this clause.
• Force majeure must render business operations not possible to continue.

Force majeure allows employers to be excused from contractual obligations to employees (or any other contracted party) due to enforced ceasing of business due to pre-specified external forces.

Effectively, force majeure enables employers to be excused from contractual obligations to an employee under certain conditions where they are prevented from following certain usual business practices due to significant circumstances beyond their control preventing business operations.

Force majeure is not straightforward – there are strict and precise rulings around the use of this clause.

In wording a force majeure clause to include temporary business closure due to coronavirus or any other communicable disease, one must have specifically included pandemic, epidemic or outbreak of disease in the force majeure clause. It is worth noting that an epidemic – while serious in its own right is not the same as a pandemic.

Importantly, Force Majeure covers specifically what the parties agree on – so the clause must be very specifically and carefully worded. There is no overriding governance or independent doctrine on the intention of the force majeure clause and any legal challenge will rest solely on the working of the clause in question.

Force majeure must render business operations not possible to continue.

The one thing that is clear however is that the event or situation enabling enactment of the Force Majeure clause must be significant and must render business operation or operations by impacted employees either physically or legally impossible.

The other factor that is clear is that the nature of the force must be out of the control of the business owner – and not possible to work around in any way.
It is also worth noting that where business operations are made very difficult due to employee restrictions, this is not the same as being rendered impossible. Force Majeure may only be put in place where business operations are physically or legally not possible.

In summary, force majeure is a specialised area of HR where employers really need to seek specialist advice to ensure the Employment Agreement is written to include specific situations, and must be very clear about the fact that the specified situation must be unavoidable, be out of the control of the business owner and must prevent business continuance.

Traditionally, Force Majeure would have included Acts of War (which would include terrorism, but there is no harm in specifically including terrorism), a change of law or government required restriction of trade and ‘acts of God’ – which would include all natural disasters, but not necessarily include business closure due to communicable diseases.

Indeed, where Coronavirus is the cause of business closure – and the closure meaning that the business is not able to trade in any capacity, a force majeure clause must specifically state that cease of trade due to a pandemic is covered.

In the case of a pandemic being the ‘external force’, the clause should go into further detail in the instance of an employee being prevented to work due to quarantine requirements – even though business operations may be able to continue in some way.

In its own right, this example must be a mandated requirement. The following of recommended advice from health experts in quarantining, for example, would not suffice.

So – force majeure, while straightforward in principle in enabling an employer to be excused from obligations to employees, is not at all straightforward in implementation. The clause must be broad enough to cover most possible situations, yet specific enough to state the exact situation and action agreed and allowable.
Finally (and importantly), a force majeure clause must be both reasonable and not be off putting to a potential employee.

Please contact us for assistance in this area. Our team of HR experts will be happy to discuss this with you.

Why you should invest time in position descriptions and induction

Contents

• Position Descriptions and Employee Induction – The true value of a well written position description is often misunderstood
• The Induction
• How often should you review your documents and processes?

Position Descriptions and Employee Induction – The true value of a well written position description is often misunderstood

HR documentation and HR processes are both critical to the quality of people you bring to your team, and the early months of the year traditionally have more staff movement than other months in the year. January and February are an excellent time to review HR processes for the calendar and financial year ahead.

This month we are focussing on position descriptions and induction processes – both key documents for recruiting and on-boarding new team members. The true value of a well written position description is often misunderstood.

The position title and description are two critical factors in terms of attracting the right candidates for interviewing, but also have an ongoing purpose throughout the employment lifecycle, so it pays to spend some time getting them right from the outset.

The position title should be as clear and concise as possible in conveying the purpose of the role, as this is the first signal to job seekers of the opportunity for them with your business.

The position description (often referred to as a PD) is the list of tasks the person will undertake in their role daily, and will include details on level of responsibility undertaken. Having the PD up to date and current is extremely important in attracting the candidate with the most relevant skill base – but is also a critical outgoing message to all candidates of your professionalism and business operating standards.

When defining, or refining what a position entails, do so with the input of HR, line management and employees in a similar function. Research shows clearly that the most accurate specifications are produced with the involvement of several different business areas.

Having detailed up to date titles and position descriptions for all positions within your organisation plus annual checks on them as a standard process ensures you are focussed on ensuring all of your staff members are clear on what you want them to achieve.

Having up to date PDs has the useful side benefit of being ready to go with your advertising when you’re ready to hire a new employee. Taking the time to create an accurate position description can be invaluable to the ongoing attraction, hiring, performance and retention of employees.

Once you have advertised and successfully appointed the incoming employee, the next and most important process for that employee’s future tenure with your business is to commence a formal induction process.

The Induction

The employee induction should be fully planned, and should commence from day one. Many businesses consider induction to be showing the new recruit where the kitchen and toilet are and where their work place is and leave them to it. This is not a good start for your employee – and it leaves you well exposed in terms of who he or she may buddy up.

Every new recruit should have an induction buddy assigned. It will make the new employee feel cared for, and provide a go-to person to answer initial questions – without necessarily needing to involve your time.

The Induction document should list all tasks and areas broken down from the Position Description.

The induction process – while it may vary across different areas of seniority, will ensure correct training is delivered and that your standards are understood from the very start. A well-planned induction enables new employees to become fully operational quickly and should be a key step in the recruitment process. It sets the tone for all new recruits and promotes a positive first impression of the business and the people.

Your new employee’s impression of the organisation will be made on how well they have been treated on their first day at the office. It is very important that someone is responsible for the induction of the new employee on their first day, and ideally remains as induction buddy for their first 90 days of employment. This approach means that new employees can settle in and start contributing effectively to the organisation as soon possible.

The following are what we consider mandatory inclusions for every team member’s induction

• Details of their role and responsibilities
• All aspects of the employment relationship, levels of quality, performance, expected behaviour and conduct in the workplace, also any KPI’s or targets they may be expected to reach
• Health & Safety must be explained showing where first aid kits are, who the first aid officer is, where the emergency exits are and what the evacuation processes are
• The policies and procedures of the organisation
• An explanation of the organisational culture
• An overview of the organisational chart and structure
• A list of key staff within the organisation and their contact details such as email and phone

At the completion of induction, the new employee and their buddy should sign off each of the points to ensure that all areas of the induction have been completed and the new employee should be able to get started in their role with a reasonable understanding of the business and the policies etc.

How often should you review your documents and processes?

Organisations are constantly evolving, so for position descriptions to reflect changing requirements they should be reviewed at least annually, and amended as appropriate. Some businesses have us review their position descriptions quarterly to ensure they are current. Remember that the PD is your tool to communicate expectations and set the line in the sand for performance, so if it is out of date it is not helpful in moving your business forward.

Correct position titles, position descriptions and induction processes are the key to achieving performance expectations and are absolutely critical at performance review time, or if you are considering promotion.

If you need help in creating these documents or processes, please contact us. It is extremely important that the creation of, refining and reviewing of position descriptions is done thoroughly and completely!

Contact us for help with your HR and accreditation documentation.

Every employee needs a written and signed Individual Employment Agreement. It’s been a legal requirement for employers to do this since July 2011, and if you don’t comply you could face fines of up to $20,000.

Is there a benefit to Employment Agreements other than avoiding fines?

Contents

• What are the minimum requirements of an Individual Employment Agreement?
• Who needs an Employment Agreement?
• How to implement the Employment Agreement
• What if an employee’s role changes?
• Summary

It’s actually in your favour, as an employer, to have Employment Agreements in place.

It’s not just so you don’t get fined – it can help you with employee negotiations if relationships turn sour.

There are clauses in the Agreement that are there to protect the business owner and the employee. The more detailed the Agreement, the better, in particular in the clauses that protect the business if the relationship falters.

What are the minimum requirements of an Individual Employment Agreement?

The minimum requirements of an Individual Employment Agreement are as follows:

• Employer’s name.
• Employee’s name.
• Position.
• Duties – as set out in the Position Description.
• Place of work.
• Working hours.
• Types of pay and frequency of pay.
• Public Holidays.
• Rights in contracting out situations.
• Restructuring due to transfer.
• Negotiations with new employer.
• No transfer or employment.
• Resolving employment relationship problems.

You should treat this list as the absolute minimum, because one size does not fit all when it comes to Employment Agreements.

You would need different clauses for a factory worker versus a sales rep, or someone responsible for creating Intellectual Property for the business.

For that reason, you need to customise Employment Agreements for every role as much as possible. This protects you and your business, and gives you more legal rights.

Who needs an Employment Agreement?

Every employee needs an Employment Agreement, whether they’re full time, part time or fixed term. It’s also worth having an Agreement with contractors. Although a Contractor’s Agreement is very different to an Employment Agreement, it’s worth having to ensure every party knows where they stand.

How to implement the Employment Agreement

The Employment Agreement must be signed before the employee starts in their new role. It needs to be signed by both the employee and the employer. Ideally, this would happen before the new employee’s first day in the business.

This is sometimes difficult, particularly if there are any questions or negotiations. But if it’s planned in advance, it’s an opportunity to sit down and discuss and negotiate the Employment Agreement. That way everything is clear before the new employee starts work.

If you don’t have the Employment Agreement in place prior to the employee’s official start date, it will jeopardise the 90-day trial period. So if you were to end a relationship under the 90-day trial period, the trial period would not be valid, and you may end up with an undesirable employee. Read more about 90-day trial periods.

Remember to give the employee a signed copy of the Employment Agreement, as well as a Position Description. (The Position Description is also a legal requirement).

What if an employee’s role changes? 

If you are staying in the same relationship (i.e. employer and employee), you simply need to agree to the new changes and sign off from an effective date. You must create a letter negotiating the contract and have it signed and attach it to the Employment Agreement on the employee’s file.

If you are changing the structure completely, you need to end one Agreement to start another. In doing this, you must follow correct recruitment processes to ensure both parties are in agreement and have adequate time to seek independent legal advice and to consider the new proposal. If you do go down this route, be sure to have a very clear paper trail in place.

Summary

• It’s a legal requirement for every employee to have an Employment Agreement (as well as a Position Description).
• This applies to full-time employees, part-time employees, casual employees and fixed-term employees.
• You could be fined up to $20,000 if you fail to meet this requirement.
• A one-size-fits-all approach does not work: you need different clauses for different roles.
• The employee and employer both need to sign the agreement – and before the employee’s first workday.
• There are specific procedures to follow if an employee’s role changes.

Next step:

Do you need help with Employment Agreements?

If you’d like Employment Agreements that look after your business interests, we can help you.

You can choose to work with us in a number of ways, to suit your needs and your budget:

• Modular services let you choose specific services, depending on your needs.
• End-to-end recruitment takes care of recruiting a new employee from start to finish.
• Monthly retainers let us take care of all your HR and recruitment needs.

Not sure which option is best for you? Contact our friendly team today to discuss your needs.

An Employment Agreement isn’t just necessary by law – it protects your business interests.