Sound contracts underpin successful employment bond

By Chris Lewis, Federated Farmers Dairy Industry Chairperson

In my role as a Federated Farmers advocate for over 10 years, and especially in the last six as Deputy and Chair of the Dairy Industry section, I’ve been rung many, many times by employers and employees about contracts.

Recently, there has been a run of enquiries from people who don’t have a Federated Farmers contract in place. This isn’t a sales pitch, it’s intended as an educational piece on why you should use them.

Firstly, don’t be one of those plonkers who don’t have any sort of employment agreement at all.  The Ministry for Business, Innovation and Employment’s 2017/18 National Survey of Employers showed 12% of employers across all sectors did not have a written agreement with one of more employees.  There are now substantial spot fines for this, and besides it’s just incredibly bad for the employer/employee relationship not to have a joint understanding of agreed conditions on pay, holidays, work hours and all the rest of it written down and signed off.

The common comments I get from employers for not using Federated Farmers’ contracts revolve around the $90 cost, that they “favour the employee too much”, there’s too much detail to fill in, “our consultant prefers to use his”, we don’t like such and such clauses … the list could go on.

I’ve always thought with some of the alternative brands of contract out there that seem to be at the root of all sorts of issues that we end up dealing with, it must be costly for those clients who use them, if the employee is getting our advice or legal advice.

I don’t mind what contract you opt for, it’s got to be fair for both parties and use the correct legal clauses. We don’t leave them out - even the ones some don’t like - because it’s the law!

At Feds, we believe in fairness, openness and correctly filled out contracts that keep both sides safe and enhance a good working relationship. If you get it correct at the start, you will find the contract remains in the drawer for the entirety of the relationship.

Both sides must do their due diligence, and I mean more than the reference checks of each other.

Check the costs of taking the position, taking into account aspects such as the supply of meat and milk, lines company costs that can vary region by region, and you may have to pay for staff and cowshed expenses if you are going self-employed.

If you are going self-employed, check on DairyNZ’s website for  DairyBASE.  It has the averages of costs for dairy farmers and sharemilkers in difference regions.  It’s one of their better resources and it’s free. Budget templates and other resources can also be found there.  It’s better than a Google search or social media because it gets updated every year with real figures.

Feds members can also access our remuneration survey reports to benchmark salaries and for fair bargaining purposes.

The Federated Farmers contracts also go through a lengthy process before updates are added. For example, our sharemilkers negotiate changes with our sharemilker farm owner representatives. It’s like a mini union discussion, but with more common sense and no teachers’ strike to brass half the country off.

Once changes are negotiated, they go to our lawyers who send back tweaks to be agreed on. Sometimes more negotiations need to happen because the lawyers say no to the suggestions from the two groups, then more options get sent back. All this back and forth takes time, which can be  frustrating, but we have to get it right.

Based on feedback, we are updating our Variable Order contracts and proposing more changes to our contract milking contracts to get them fairer. Watch this space – we’re nearly finished (if we get the sign off from everyone!).

Feds has also just released our new digital contracts, which means less paperwork and they can be stored in the cloud somewhere.

I’ve used them in a trial; they will be a game changer.  Some members have been requesting them for ages and we’re nearly there. Thanks for your patience.

There is a wealth of information out there that I didn’t have when I first went farming, so do your research before signing.  But don’t forget the people element: the first 5 seconds is where people connect or don’t.  A strong handshake, eye to eye contact and good casual conversation can make all the difference to a sound, long relationship.