Skip to main content

Disclaimer: Educational purposes only. Not legal advice. Consult a qualified NZ legal practitioner for your specific circumstances.

SimplifiedLaw.co.nz
employment

Can an employer force you to sign an agreement?

Key Takeaway

In New Zealand, employers cannot lawfully force an employee to sign an agreement. Employment agreements require genuine consent, facilitated by the legal obligation of good faith and the employee's right to seek independent advice before signing. Agreements signed under duress may be challenged.

Can an Employer Force You to Sign an Agreement in New Zealand?

New Zealand employment law is founded on the principle that employment relationships are based on mutual agreement and good faith. While employers propose employment agreements, they cannot lawfully compel an employee to sign an agreement against their will. An agreement entered into under duress or without genuine consent may not be legally binding.

The Principle of Good Faith

The Employment Relations Act 2000 (ERA) establishes the fundamental requirement for all parties in an employment relationship to deal with each other in good faith [Source: Employment Relations Act 2000, s 4]. This obligation applies at all stages of the employment relationship, including during bargaining for an employment agreement. Good faith involves:

  • Being active and constructive in establishing and maintaining a productive relationship.
  • Being responsive and communicative.
  • Not misleading or deceiving each other.
  • Providing information that is relevant to the bargaining process [Source: Employment Relations Act 2000, s 4].

This overarching principle means that any attempt by an employer to force an employee to sign an agreement would likely be considered a breach of the good faith obligation, as it undermines genuine consent and fair dealing.

Individual Employment Agreements (IEAs)

An individual employment agreement (IEA) is a contract between an employer and a single employee that sets out the terms and conditions of their employment [Source: Employment Relations Act 2000, s 55]. All IEAs must be in writing [Source: Employment Relations Act 2000, s 62]. For an IEA to be valid and legally enforceable, it must be genuinely agreed to by both parties.

Right to Independent Advice

A critical safeguard against employers forcing agreements is the requirement for employers to advise employees of their right to seek independent advice. Before an employee signs an individual employment agreement, or any variation to an existing agreement, the employer must:

  • Advise the employee of their right to seek independent advice about the terms and conditions of the agreement.
  • Give the employee a reasonable opportunity to seek that advice [Source: Employment Relations Act 2000, s 63B].

If an employer fails to meet these obligations, the employment agreement may be unenforceable or subject to challenge. This right ensures that employees can make an informed decision without undue pressure.

Collective Employment Agreements (CEAs)

A collective employment agreement (CEA) is a written contract made between one or more employers and one or more unions, covering terms and conditions of employment for a group of employees [Source: Employment Relations Act 2000, s 58]. Similar to IEAs, the formation of CEAs also requires genuine agreement between the bargaining parties, underpinned by good faith bargaining obligations [Source: Employment Relations Act 2000, Part 6].

Challenging an Agreement Signed Under Pressure

If an employee believes they were pressured or forced to sign an employment agreement, they may be able to raise a personal grievance. A personal grievance is a claim by an employee that they have been disadvantaged in their employment [Source: Employment Relations Act 2000, s 103]. Examples of circumstances that could give rise to a personal grievance include:

  • Unjustifiable disadvantage: If an employee was pressured into signing an agreement that put them in a worse position without genuine consent [Source: Employment Relations Act 2000, s 103(1)(b)].
  • Unjustifiable dismissal: If an employee was dismissed for refusing to sign an agreement that was presented under duress or without reasonable opportunity for review and advice [Source: Employment Relations Act 2000, s 103(1)(a)].

To challenge an agreement, an employee must generally raise a personal grievance within 90 days of the action occurring or coming to their attention [Source: Employment Relations Act 2000, s 115].

Conclusion

New Zealand employment law does not permit an employer to force an employee to sign an employment agreement. The legal framework, particularly the principles of good faith and the statutory right to seek independent advice, requires genuine consent for all employment agreements. Employees who feel they have been pressured to sign an agreement have avenues for recourse, including raising a personal grievance.

When to Seek Independent Legal Advice

An employee who believes they have been pressured or forced to sign an employment agreement should seek independent legal advice. They may contact a union representative (if they are a member), a lawyer specialising in employment law, or their local Community Law Centres for free advice. Seeking timely advice is important, especially when considering the 90-day time limit for raising a personal grievance.

Key Resources