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November 2004

Employers fined for failing to have written employment agreements

Pursuant to the Employment Relations Act, all individual employment agreements must be in writing. The Act also specifies the minimum contents of those agreements. Under the Act, the Employment Relations Authority (ERA) may impose a penalty for any breach of the Act. Since the introduction of the Act, there have been decisions of the ERA imposing penalties upon employers who fail to have written employment agreements with their employees.

In 2001, an employer was fined $250 for failing to have a written employment agreement. In 2002, the fine in a similar case increased to $500. In a recent decision of the ERA, the penalty had increased to $750. In one of those cases, the employee was unsuccessful in their personal grievance claim but nonetheless the ERA held that the failure to provide a written agreement had prejudiced the employee and the penalty was imposed.

It can be seen that employers are now expected to be aware of their obligations under the Act and the fines for failing to comply with this basic obligation are clearly increasing. All employers must ensure that they have written employment agreements with their employees. Do not hesitate to contact us for assistance in drafting appropriate agreements and hence avoid the risk of being fined.