Starting an employment relationship involves the basic principles of contract law: an offer and acceptance of employment. While this might seem straightforward, there are essential legal nuances that employers need to be aware of, especially concerning trial periods and personal grievances.
Understanding the Definition of an Employee
Under the Employment Relations Act 2000 (ERA), an employee is defined as anyone who is intending to work. This includes individuals who have been offered and have accepted employment.
Offer and Acceptance
An employment offer can take various forms, such as a phone call, email, or a written employment agreement. The crucial aspect is that the offer must be clear and include essential terms such as hours of work, location, remuneration, the position, and its duties.
Employers must provide a copy of the intended agreement to the employee, advise them to seek independent advice, allow time for this, and respond to any issues raised by the employee. Although not explicitly stated, this process implies that the offer should be in writing. Failure to follow this process does not invalidate the offer or agreement but does breach the ERA, potentially resulting in a penalty.
All terms need not be finalised for an employment contract to be formed, but the applicant must confirm their acceptance. This acceptance can be given verbally, by email, or by signing the employment agreement. If the offer specifies that acceptance must be in writing, it must be written to be effective. Offers can expire or be revoked if not accepted promptly, but once accepted, the offer cannot be withdrawn, and the applicant becomes an employee. The only exception to this is conditional offers, which explicitly imply that a condition must be met (such as granting a work visa or satisfactory background checks).
Personal Grievances
Once an individual accepts an employment offer, they are entitled to access the statutory personal grievance procedure. Even if the employee has not started working, they must be treated as an employee. For instance, an employer cannot withdraw the offer after acceptance without risking an unjustified dismissal claim.
Trial Periods
Employers can place new employees, who have not previously been employed by them, on a trial period of up to 90 days from the start of employment. During this period, the employee cannot bring a personal grievance for dismissal. However, the trial period must be included in the written employment agreement and agreed upon before employment begins.
An offer made verbally or via email without a written trial period means the employee cannot be subsequently placed on one. Employment begins upon acceptance of the offer, making it crucial that the trial period is included in the initial written agreement.
Best Practices for Employers
To avoid legal pitfalls:
- Ensure Written Offers: Always provide a written employment agreement that includes all essential terms and a compliant trial period if applicable.
- Avoid Verbal Offers: Do not make verbal offers that can be accepted, as this can complicate the inclusion of trial periods.
- Sign Before Starting: Ensure that the employment agreement is reviewed, agreed upon, and signed before the employee commences work.
By following these guidelines, employers can establish clear and legally compliant employment relationships from the outset.
