New Zealand: Legal dos and donts when hiring a new employee

Last Updated: 20 October 2017
Article by Charlene Sell

Employees can significantly influence your business's prospects. The right employee can help your business grow and prosper, but the wrong employee can detrimentally impact the financial and reputational fortunes of your business. As a result, it is well worthwhile investing time and energy into fine-tuning your hiring practices to increase the chances of finding an employee that is the best fit for your business.

In this article, we provide some tips to help you through the recruitment process – from advertising the role, to offering employment to your top candidate.

Advertising the role

Before formally advertising the role, it is useful to map out a description of the tasks that the employee will perform, the experience, qualifications, skills and personal attributes that you are seeking, hours and place of work (including flexible working arrangements, where relevant), remuneration, and any training that may be provided. This will give you a clear understanding of the type of applicants that you are looking for and prepare you to answer questions that the applicants may have at the interview stage.

The advertisement for the role must not be misleading or contain any discriminatory language. If an applicant is not offered the role, and suspects that they have been discriminated against, they may make a complaint to the Human Rights Commission on the basis of prohibited discrimination under the Human Rights Act 1993. For example, the use of words such as "senior" or "mature" may be, in some circumstances, discriminatory on the basis of age. "Experienced" or "responsible" would be more appropriate words to use in these circumstances.

Applications and interviews

As with advertising the role, it is crucial that application forms and questions asked in interviews with applicants do not indicate potential discrimination. For example:

  • You must not enquire generally about the applicant's medical history. It is, however, acceptable to ask an applicant, after explaining the requirements of the role, if they have any health conditions that might prevent them from carrying out that role.
  • You should not ask an applicant whether they have, or plan to have, children. If the role would require the applicant to travel or work overtime regularly, you should simply ask if the applicant can meet those requirements.
  • You should not ask for an applicant's date of birth or age.

Ensure that all emails and interview notes are kept professional. If an applicant makes a complaint on the basis of discrimination then these documents may need to be disclosed.

Pre-employment checks

Some roles legally require certain pre-employment checks to be undertaken, such as police vetting where an employee is working with children.

You will need a legitimate reason for carrying out each pre-employment check and the applicant must give their consent. Pre-employment checks may include:

  1. Reference check: if you want to contact a person that the applicant has not listed as a referee, you must first obtain the applicant's consent. Always ask the referee if they wish to speak to you in confidence. If the applicant makes a request under the Privacy Act 1993 for you to provide them with their personal information, you will need to supply them with information provided by referees unless the referees have required that it be kept confidential.
  2. Criminal history check: undertaken by the Police, will not show any convictions that are covered by the Criminal Records (Clean Slate) Act 2004. Applicants can withhold information about past offending if the conviction was handed down at least seven years in the past and the applicant has never received a custodial sentence.
  3. Drug and alcohol testing: whether this is appropriate will depend on whether the applicant is applying for a safety-sensitive role, such as construction work or passenger transportation.
  4. Entitlement to work in New Zealand: you may ask applicants for evidence of their entitlement to work in New Zealand, e.g. passport, residency visa or work permit. Under the Immigration Act 2009, it is an offence to allow a person to work for you if they are not entitled to work in New Zealand.
  5. Credit check. Requiring the applicant to undergo a credit check will only be appropriate if there is a significant financial element to the role, such as handling accounts or payments.

It is now common for employers to undertake a Google search when considering potential candidates. This is perfectly legal so long as the information is publicly available. Employers must not ask applicants to reveal their social media passwords or ask them to "befriend" the employer so that they can look at the applicant's Facebook profile.

Offer of employment

Once you've gone through the application process and think you've found the right person for the role, the next step is to make the applicant a formal offer of employment.

When scoping the role, you will have already identified whether it is permanent, fixed-term or casual. There can be subtle differences between each of these categories of employment:

  1. Permanent: a permanent employee will continue to work for you indefinitely, either on a full-time or part-time basis. Their employment will end either when the employee resigns, or where you dismiss the employee for genuine reasons, such as redundancy or serious misconduct.
  2. Fixed-term: a fixed-term employee will work for you for a limited duration. Their employment will end on a specified date, on the occurrence of a specified event, or at the conclusion of a specified project. There needs to be a genuine reason for the fixed-term nature of the role recorded in the employment agreement. Fixed-term employment is not appropriate if you simply wish to test an employee in the role. Instead, the employee should be employed on a permanent basis and a 90 day trial period clause included in their employment agreement.
  3. Casual: it can sometimes be difficult to differentiate between a part-time permanent employee and a casual employee. Part-timers work for a few hours a day or a few days a week on an ongoing basis. Casual employees, on the other hand, do not have a regular work pattern or an expectation of ongoing employment. Casual employees can be deemed to be permanent if their work pattern becomes regular. Casual employees may include seasonal fruit pickers and relief teachers (amongst others).

Regardless of the nature of employment, all employees must have written employment agreements.

You should provide the successful applicant with a copy of the proposed employment agreement when you make the formal offer of employment. At the same time you need to let them know that they are entitled to seek independent advice about the employment agreement and give them a reasonable time to seek that advice. It wouldn't be considered reasonable to provide the employment agreement to the applicant a few days before they were due to start work. If the employee has any questions or proposes changes to the employment agreement, you have a legal obligation to consider and respond to them.

Many employers now include 90 day trial period clauses in their employment agreements. This is a useful mechanism because it allows the employer to dismiss an employee who isn't working out during the trial period, without the risk of the employee bringing a personal grievance in relation to the dismissal. However, the employer can only rely on a 90 day trial period clause if the employee has not previously been employed by the employer, and the employee signs their employment agreement before they do any work.

How we can help

We can provide you with advice on any legal issues relating to the recruitment process. This may range from privacy concerns during the process, to preparing and advising on employment agreements.

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Employment agreements - are you compliant?

Is your 90 day trial period correctly worded?

Every business needs employment agreements for staff

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Charlene Sell
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