23 August 2004

Media Release

Most Small Businesses Don¡¦t Have Written Employment Contracts

Nearly 30% of all businesses don¡¦t have written employment contracts for staff, but for SMEs the number rises to 65%.

This emerged among key findings of more than 350 responses to an Auckland Chamber of Commerce survey on a number of issues.

One of the questions asked businesses to say whether they had written employment contracts in place for all staff.

The survey found that 70% of all businesses who responded had written employment contracts. However, a breakdown on the basis of firm size revealed that of the 30% of businesses without contracts the smaller the firm the less likely it is to have written employment contracts:
„h 65% of firms employing between 1-5 staff are without written contracts.

Reasons given for not having a written contract included:
- Staff were all part-time;
- Use only subcontractors;
- Staff are partner (¡§wife¡¨ in another example) and personal friends;
- Employees are also shareholders
- Works fine without written contracts;
- ¡§We have experienced no difficulties in this area¡¨;
- We act in good faith;
- Still getting around to it.

Commenting, Chamber CEO Michael Barnett said the survey had been undertaken to provide feedback to Government on a key employment contracts issue.

¡§Clearly there is a difference of attitude about the need for employment contracts between SMEs and larger businesses. It suggests business groups and Government¡¦s education programmes on the advisability of employment contracts need to be differentiated between small and bigger businesses.¡¨

ENDS