25 Sep 2014

Over the last few weeks I’ve been dealing with a grim and potential no-win situation for everyone involved – the company, the employee who is facing redundancy, and myself as the consultant trying to sort things out. And this is all because the company did not attend to one of the basics – in this case, an employment agreement.

Company X cannot financially sustain an employee, and is therefore exploring redundancy. But, the employee does not have a current, signed employment agreement with Company X and therefore has no redundancy clause. In New Zealand, lack of an employment agreement means reversion to standard agreements. The real problem here is that redundancy clauses vary from providing no redundancy payout to providing considerable payouts. Coupled with that, the employer is likely to be liable for a fine of between $10k and $20k for not providing the employee with an employment agreement.

So, the outcome is likely to put the employer out of business, and I’m unlikely to get paid – all due to the lack of an employment agreement …