resolving breaches of employment agreements

If employers or employees believe that their employment agreement has not been kept to, or has been changed without their agreement, they should first clarify the problem and talk to the other party to try to solve it.

If it is a collective agreement, they must ensure that all the union and employer parties to the agreement know about the problem.

They may also contact the Department of Labour for information or advice. Often mediation [http://www.ers.govt.nz/relationships/mediation.html] will be the best way to resolve a problem that the parties cannot fix themselves.

If these options do not work, more formal steps are available:

• When there is a disagreement about what an agreement means, or how it should be applied or operated, the parties can approach the Employment Relations Authority [http://www.ers.govt.nz/relationships/authority] to decide for them.
• If there is no disagreement about what the agreement says, one party can ask the Employment Relations Authority [http://www.ers.govt.nz/relationships/authority] to order the other party to keep to the agreement.
• If one party believes the other party has breached the agreement, that party can ask the Employment Relations Authority [http://www.ers.govt.nz/relationships/authority] to deal with the breach.

When enforcing an employment agreement, any party has the right to use a representative [http://www.ers.govt.nz/relationships/first_steps_print.html#rep], such as a union, an employers' organisation or a lawyer.

Please note that from 1 March 2009, employers who employ 19 or fewer employees are able to agree to trial periods with new employees. During a trial period an employee cannot pursue a personal grievance for unjustified dismissal through the Employment Relations Authority. The employee may pursue a personal grievance where issues such as discrimination or harrasment arise.

For more information see our factsheet on trial periods [http://www.ers.govt.nz/relationships/trialperiod.html].

Remedies for breaches of employment agreements

The Employment Relations Authority can:

• order the payment of money owed to an employee under the terms of an employment agreement
• order the other party to comply with any part of an employment agreement in the future (a compliance order)
• order the other party to pay damages for a breach of the agreement
• impose a penalty (like a fine) on an employer or employee who has breached an employment agreement by not doing what the agreement says. The Act sets down a maximum penalty of $5,000 in the case of an individual and $10,000 in the case of a company or other corporation. The money is paid into the Crown's Bank Account, not to the individual, unless the Authority orders it.