E-sign technology and NZ employment law

Jason Ennor, Co-founder and CEO at MyHR
By Jason Ennor, Co-founder and CEO at MyHR

New Zealand employers are required to have signed employment agreements for all of their employees, no matter when they started or whether they are full-time, part-time or casual. Getting them signed is the key.

Most businesses are aware of this requirement under the Employment Relations Act 2000, but some employers still take the risk of not ensuring they have employment agreements in writing.

In 2011, a penalty was introduced that meant employers could get a $20,000 fine if they were unable to produce signed agreements for all employees,. But for a number of years, the penalty was rarely used.

Since then, businesses have been regularly fined for failing to produce signed employment agreements when requested to do so by the Ministry of Business Innovation and Employment (MBIE).

I am sure we can expect this to continue, but there is absolutely no reason why any employer, of any size, anywhere in New Zealand should not have all their employees on signed agreements. It is such a simple process and has been made much easier by technology.

Online signature technology

In the 20 years since the introduction of the Employment Relations Act, the scale and pace of tech developments has been astounding and rapid. Among these developments has been the creation of online signature technology, which was followed by legislation to accommodate electronic transactions, including signing documents online.

Both the technology and its supporting law have been around for some years now, but uptake of use of this technology in the employment relationship has been slow in NZ.

Use of online signature technology speeds up the process at all stages, it makes things easier, it saves money and is more secure and robust than the old-school paper based process.

The process is simple:

  • The employer reviews and signs the agreement online;
  • It is auto-emailed to the employee with instructions;
  • The employee reviews and signs the agreement online;
  • It is auto-emailed to the employee as a pdf, with both signatures;
  • It is auto-uploaded to the employer’s online account and stored inside the newly created file for that employee.
  • Throughout the process alerts keep everything ticking along, such as: alerts if the employee refuses to sign or reminders to the employer as day one approaches.

This easy process is underpinned by security and technology that ensures the transaction steps are traceable and secure:

  • All signatures are tagged with a security code, which is linked to the IP addresses of the respective parties and the time they signed the agreement.
  • The employee can only access the document via a personalised link and by entering a unique code, sent to their personal email.
  • Once complete, each page of the document is marked with a unique identifier creating a closed, un-editable “envelope” which defines the formal agreement reached between both parties.

Easy and secure. Employment is established on a solid foundation. All parties are clear on the terms and obligations and they’re ready for a productive, successful relationship.

Not to mention the immediate elimination of the risk of a $20,000 fine (as well as whatever other penalties and costs for damages might be awarded).

MyHR has offered e-sign technology since 2015. It is currently being actively used by hundreds of NZ businesses, who collectively employ over 15,000 Kiwis.