Time to review employment agreements


Last week my colleague, Sean Maskill, wrote that the recent employment law changes (banning zero hour contracts and creating new rules for employers that require their employees to be available to do work - known availability provisions) do nothing more than increase the costs for farmers and other businesses, and simply provides “a list of ingredients without providing the recipe”.    

Here is the other side of the fence. 

Firstly, the recent amendments do not necessarily increase costs for farmers.  Most farm employment agreements are generally for a stated number of hours, and the employee is remunerated a stated salary for working those hours. 

In these circumstances, the farmers and their farm staff can discuss and agree what reasonable compensation (if any) will be.  Where farm staff are remunerated for their agreed work hours by way of salary, they may agree with their employer that their remuneration includes compensation for making themselves available for work under an availability provision. 

This can be recorded in the employment agreement so there can be no debate about whatwas agreed.  The employer does not then pay any more for requiring a farm worker to be available to work extra hours.

With regard to the changes providing “a list of ingredients without the recipe”, employment relationships arise in a diverse range of circumstances. It would be impracticable to be explicit about what reasonable grounds might be in every case.  Some guidance about reasonable grounds and reasonable compensation has been built into the legislation, including (amongst other things) the nature of the work to be performed, the number of hours for which the employee is required to be available, and the nature of any restrictions resulting from having to be available. 

Farmer employers and their farm staff may agree in their employment agreement what the reasonable grounds and reasonable compensation may be, having regard to the relevant circumstances. Further guidance will become available as cases are tested in the employment courts.

What all of this means is that farmer employers should take this opportunity to review their new and existing employment agreements, and ensure that they are clear that there is agreement all round about reasonable compensation and reasonable grounds for any availability provision in the employment agreement.  That way there will be no hidden surprises for both the farmer employer and the employee farm staff, and the good news is (at least for existing agreements agreed before 1 April 2016) farmers have until 1 April 2017 to ensure their agreements are up to date.  

The content of this document is necessarily general and readers should seek specific advice on particular matters and not rely solely on this document. 

If you would like more information on any of the topics in this document, please contact your usual Auld Brewer Mazengarb & McEwen adviser. 

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Philip McCarthy