New Zealand Engineering 1999 July

Law

Overseas Employment Contracts - A Timely Warning

Check list

An unusual development during the past two years has been the number of members employed on overseas employment contracts who have found the need to request the Institution’s advice or assistance to help them resolve a problem that they have experienced in the application or interpretation of their contract.

I mention unusual, because in previous years it was extremely rare to receive any request for advice or assistance from those of our members who were working overseas. Indeed, in former years, the feedback that the Institution received from members working overseas generally confirmed that taking up an overseas assignment had many advantages, not only for the financial rewards to be earned, but, in particular, for the opportunity to gain further practical and technical experience working on some major projects.

However, it should be emphasised that the majority of the problems that some of our members have experienced working on overseas projects are mainly confined to the Asian area. There are many reasons why these members are now experiencing problems with their contracts, not least the collapse of what at one time were known as the "Tiger" economies which has affected not just the Asian countries themselves, but has also impacted on the economies of many non-Asian countries, including New Zealand.

With a few exceptions, where members working overseas have been employed by New Zealand companies, and, in particular, where the New Zealand company continues to remain throughout the term of an overseas contract the principal employer, those members do not normally experience any problem concerning the application of their employment contract.

However, we are most concerned to learn of the trauma and distress that some of our members working on overseas projects have experienced. In particular, when without any prior warning, a project is abandoned, and as a consequence our member’s employment is summarily terminated. Some members have informed us of their contract being terminated, having worked only two or three months of a two or more years contract! In almost every case that has been referred to the Institution, the employer has refused to pay the members concerned any compensation for the balance of the unexpired period of their contracts, leaving them with no alternative but to resort to legal proceedings - an action which may be a relatively simple matter to commence here in New Zealand, but, unfortunately, can often result in complex protracted litigation if one needs to commence proceedings in a foreign country.

We are aware of cases where members have sold up their home and possessions, and have taken their family with them on what they believed was to be a long-term project in a foreign country, only to find themselves in a situation where the project is abandoned after a few months, and then faced with no alternative but to return to New Zealand and try to re-establish themselves.

Check list

For those members who may be considering working overseas, we would strongly advise that BEFORE make any commitment to confirm your acceptance of an overseas assignment, that you should first consult the following brief Check list which may be helpful to you as a guide to minimise any future problems:

1. Check out the viability of the company that you are considering taking up a position with - how long has it been established and does it have a good ‘track record’?

2. Are you being employed by an overseas or a New Zealand company?

If a New Zealand based company, what guarantees are you given for your future long-term employment security, particularly at the conclusion of the project?

3. Are the "terms and conditions" of the proposed employment contract clear and unambiguous?

How many days of the week are you required to work, and what are the normal hours of work?

What provisions are included in the contract for holidays, annual and sick leave accommodation, transport and travel expenses etc?

In the event of a dispute or difference arising, what remedies are included in the contract for protecting your interests?

4. Find out as much as possible about the country that you are going to. If possible talk to other New Zealanders who may have lived or worked in that foreign country.

5. If you intend to take your family with you, are you confident that they also will be able to adjust to life in a foreign country away from close family and friends?

6. Check on the country’s political and economic stability. In particular, taxes both national and local, also the cost of living - do a comparison check of a wide range of consumer goods and services here in New Zealand and in the country that you are going to.

7. Health: Is medical insurance cover included in the contract? What is the availability of medical services in the event that you or members of your family take sick or sustain an injury?

Does the location that you will be living and working in have available clean running water and power?

8. Education Services: If you are taking your family with you, are there pre-schools, schools, and universities reasonably accessible in the location where you will be living?

9. Are you fully informed about the local culture and customs, in particular, its religious traditions and community social life?

10. In the event of a serious crisis arising within your family back in New Zealand,necessitating your immediate return to New Zealand, does the contract include the ability for you to return at reasonably short notice or even terminate (without penalty) your employment contract?

11. What happens to you in the event of the project collapsing before its expiry date? Do the terms of your employment contract include reimbursing you for the removal and return transport costs back to New Zealand for you and your family? In particular, does your contract include any provision to compensate you for the balance of the unexpired period of the contract?

Finally, before signing your acceptance of an overseas employment contract, it is absolutely essential that you have the terms of the proposed contract checked out by some competent independent person. Always keep in mind, that what may, on first reading, appear as somewhat innocuous provisions, may subsequently cause you some difficulties should a problem arise!

Ken Tuxford is the Employment Contracts Advisor for IPENZ

Any member requiring confidential free advice or assistance with any problem relating to the contract of employment, should not hesitate to contact the Institution’s Employment Contracts Service.