When Do You Become An Employee?

You’ve accepted a new job offer? That’s great. Good for you.

But did you know that even though you might not be starting your new role until a few weeks down the track, you’re already an employee of your new employer?

You might wonder how that can be, when you haven’t lifted a finger for them yet.

The answer lies in how the Employment Relations Act 2000 defines employees based on the distinction between agreeing to do work versus actually doing the work you’ve agreed to perform.

And it has some significant implications that you may need to keep in mind even before you head into the first day of your new job.

PERSON INTENDING TO WORK = EMPLOYEE

The Act defines employees to include a person that is “intending to work” for an employer.

In other words, by law, once you have reached an agreement that you will take up a new job, you are already technically an employee for your new employer.

To make sense of that, we must bear in mind the distinction between doing work and agreeing to do the work.

In short, it is the agreement to do work that creates the relationship of employment.

That makes sense when you stop to think about it. You may not work on the weekends, but you still regard yourself as an employee during that time.

For example, if someone at a weekend social function asks you if you have a job, if you have one you don’t say no becuase you are not working at that very moment. You don’t stop being an employee at Friday 5 pm, only to pick it up again at 8 am on Monday. That is because you have an agreement that you will turn up again on Monday (even though you may not feel like doing so at times).

So the agreement is why the relationship of employment endures.

The same principle holds if you have agreed to be employed but have not yet started work. At the moment you sign that employment agreement, you become an employee of your new employer – even though you haven’t lifted a finger for them yet and they don’t intend to pay you until you do.

WHAT THIS MEANS FOR YOU

A number of consequences flow from the fact that you are employed from the date of your agreement to work.

Mutual obligations

Because you have entered into an employment relationship, you and your new employer owe each other a duty of good faith, even though you haven’t even started to do any work for them.

That means you need to keep open lines of communication with them. For example, if some circumstances in your life change that would materially affect whether you could continue to be employed in the role they have hired you for, or if something happens that may change their perception of you (e.g. you get arrested and charged with fraud), you may need to let them know that.

Ending the relationship

Let’s say you get a better offer elsewhere and you no longer want to take up that new job you have already agreed to. You can resign but you must do so in accordance with the terms of that agreement.

If the agreement says you have to give four weeks’ notice, then you have to give that notice. And if the notice period spills over beyond the commencement date you had previously agreed, then you may have to work for that short period of time until the notice period ends, unless the employer otherwise agrees.

On the employer’s side, they can only dismiss you if they do so fairly and reasonably. That is, they must have good grounds and do so in a fair manner. If you haven’t started work yet, then it will be unlikely that you can be dismissed for misconduct or poor performance (!), but it may be possible for you to be dismissed for redundancy. Also, the employer must give you the appropriate notice in the agreement, just as you are obliged to do.

You can bring a personal grievance

You may not have been paid yet, but if your employer simply changes their mind and says they now don’t want you to work for them anymore without acting fairly or reasonably, then you could raise a personal grievance, alleging that you have been unjustifiably dismissed.

It may seem odd to claim that you have been dismissed from a job you never even started, but you have a right to be treated fairly and reasonably by your new employer from the time you agreed to work for them. So they can be held to account for dismissing you from a job you never started.

CONCLUSION

From the time you sign your employment agreement, you are legally an employee of your new employer. That means you are bound by certain obligations, both in the agreement and under the Act.

The same goes for employers. It does not matter that you haven’t lifted a finger. You are already an employee before you start work, so they must treat you like one.