Fishing Share Agreement contract template
The Federation has worked with Associate Troy Stade and the team at Dawson & Associates to produce a share fishing agreement contract template that meets the new Employment Relations Act updates. This template is designed to help ensure Federation members, whether they are owner-operators or crew, meet that threshold and reduce the risk of misclassification.
What has changed?
Recent amendments to the Employment Relations Act (the Act) have introduced a new “Gateway Test” for determining whether a worker is engaged as an independent specified contractor or as an employee. Broadly speaking, contractors are more independent workers who are engaged for a specific purpose and are responsible for their own tax liability, do not accrue leave entitlements, and are more broadly outside of the control of the operator.
Employees are more integrated into the operation of the business, are entitled to annual and sickness leave, and are subject to significantly more protections under the Act. The Gateway Test is intended to clarify the distinction between a specified contractor and an employee by setting out contractual criteria that must be met for a worker to be classified as a specified contractor.
The Gateway Test is a shift away from the previous common law approach, which relied on a broader assessment of the relationship between operator and worker. Accordingly, these changes are positive in that they provide a black and white framework for operators, while simultaneously increasing the risk that existing contractors may fall short of the new definition.
What are the Gateway Tests?
Agreement in writing: Is the contract in writing, and does it explicitly say the worker is an independent contractor?
Freedom to work for others: Can the worker work for other parties, so long as it is not while they are actively working for the primary operator?
No exclusivity of hours: Is the worker able to work whatever hours they like?
Refusal to work additional hours without penalty: The contract cannot be cancelled because the worker declined to accept an additional offer of work.
Independent advice: Has the worker had opportunity to obtain independent legal and/or financial advice, before signing the agreement?
Who is affected?
The changes are particularly relevant to the commercial fishing industry, where crew are commonly engaged on a share fisher or contractor basis. Vessel owners, permit holders, operators and crew (whether or not engaged under a contractor agreement) should be aware of these changes and the associated requirements. While existing contracts may meet the common law test for contractor status, vessel owners and operators engaging new crew should ensure that their arrangements align with the new framework. These changes are intended to provide greater certainty, but they also place a greater emphasis on ensuring that contractor arrangements are properly documented and are applied consistently in practice.
What does this mean for share fishing arrangements?
Having a contract in place that meets the Gateway Test is one thing, having a practical operation that demonstrates contractor status is another. For the commercial fishing sector, the Gateway Test reinforces the importance of ensuring that crew contracts pass the various tests, but equally important is that the day-to-day operation of the arrangement reflects a genuine contractor relationship.
Features commonly associated with contractor status, such as the ability to work for others, an appropriate level of independence, responsibility for personal tax obligations and clearly documented contractual terms, are likely to become increasingly important. Operators engaging new crew should ensure their agreements accurately reflect how the parties work together in practice. A written agreement remains the key requirement, but the conduct of the parties throughout the fishing season must remain consistent with a genuine contractor arrangement if contractor status is to be maintained.
Questions?
If you have questions about your existing contracts, need assistance in drafting new contracts, have a dispute with your crew, or have questions about the recent amendment and the changes to the definition of contractor, please contact Peter Dawson by email at peter@maritimelaw.co.nz; phone +64 27 229 9624 or Troy Stade (pictured) by email at troy@maritimelaw.co.nz; phone +64 27 368 6730. maritimelaw.co.nz
Note: This is of a general nature and is not intended as legal advice. It is important that you seek legal advice that is specific to your circumstances.