Christ­mas bonus for leavers your choice

Matamata Chronicle - - Out&about - JOHN BROS­NAN

When staff leave make sure you take the time to check the terms and con­di­tions of their em­ploy­ment. Their em­ploy­ment agree­ment should have the de­tails re­lat­ing to res­ig­na­tions, no­tice pe­ri­ods and con­nected to what is re­quired to be paid out as their fi­nal pay.

Con­sid­er­a­tions for in­clu­sion in their fi­nal pay are; hol­i­day pay, al­lowances, re­im­burse­ments to the em­ployer and any house rental pay­ments (rental ar­rears or ad­vance pay­ments re­ceived).

You should also carry out a property in­spec­tion and seek sign off by both the em­ployee and you as the owner.

If not doc­u­mented, any per­ceived prior prom­ise from the em­ployer by the em­ployee for a bonus or a beast for Christ­mas, can be, and of­ten is, a dif­fi­cult is­sue to re­solve.

Be well pre­pared, fair but con­cise, as to what the out­come will be.

The now ex-em­ployee may claim there was a prom­ise of a bonus of $500 or a beast for Christ­mas and now that they are leav­ing they want this pro rata in their fi­nal pay.

The em­ployer on the other hand, be­lieves that any prom­ise of­fered was made with the un­der­stand­ing that the em­ployee would still be work­ing for them, and re­lated to the sea­son be­ing on track and pos­si­bly only if pro­duc­tion was above tar­get.

Th­ese ar­gu­ments can eas­ily es­ca­late and head quickly to­wards me­di­a­tion as the only means to re­solv­ing the is­sue. This gob­bles up time and money and usu­ally th­ese costs ex­ceed the value of what was orig­i­nally be­ing dis­puted.

To avoid this sit­u­a­tion, dis­cuss any bonus of­fer­ings prior to em­ploy­ing some­one and en­sure you as the em­ployer, record the agreed terms and con­di­tions in the em­ploy­ment agree­ment, which the em­ployee then signs.

If you want a for­mal bonus in the agree­ment you can link it to the pro­duc­tion of XYZ kg/ms with the bonus be­ing paid at the end of the sea­son and sub­ject to the em­ployee still be­ing em­ployed at this time.

Other mea­sures could be an­i­mal con­di­tion scores, empty rates and pas­ture cover and man­age­ment.

This could mit­i­gate the risk for the con­di­tions of the bonus be­ing met, at the ex­pense of health and well­be­ing of the farm.

I pre­fer to keep bonuses sep­a­rate from the em­ploy­ment pack­age, be­liev­ing bonuses are ex­tras not some­thing to take for granted, they are earned not sim­ply ex­pected. And that is what the good em­ployer wants a bonus to be, some­thing recog­nis­ing ex­tra work.

It can be a one off, some ex­tra cash over Christ­mas as a bonus to say thanks for the good sea­son’s work. It could be paid two years run­ning if the re­sults and on farm per­for­mance war­rant it. But it is the em­ployer’s choice, not a de­mand or ex­pec­ta­tion.

John Bros­nan is a hu­man re­la­tions ad­viser at Coop­erAitken Ac­coun­tants, Mor­rinsville, Mata­mata and Thames, DDI 07 889 8838 or email john@coop­eraitken.co.nz.

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