What is an employment agreement?
An employment agreement is a contract between an employer and a worker. It covers things like hours of work, rates of pay and holidays. Every worker must have an employment agreement. It is legally binding, which means if one party doesn’t do what they’ve agreed to, the other party can enforce the agreement through the Employment Relations Authority.
All employment agreements must include certain mandatory clauses and must provide the minimum employment rights for employees. Even if these are not specifically mentioned in your employment agreement they are still legally binding.
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Do I have to have an employment agreement for my job and what should I do if I don’t have a written employment agreement?
Every employee must have a written agreement with their employer. This is a requirement by law. It doesn’t have to be signed, but this is preferable. Your employment agreement is a record of what you and your employer have agreed to in terms of employment conditions and what is expected of you.
Your employer must keep a copy of your agreement, and if you ask for a copy your employer has to provide it. It’s always a good idea to have a copy for yourself in case you have a disagreement with your boss at some stage.
If a labour inspector finds an employer who doesn't have copies of their employees' agreements, they will give the employer 7 days' notice to rectify the issue. If it hasn't been rectified after this period the employer can be fined:
- up to $10,000 if the employer is an individual
- up to $20,000 if the employer is a corporation
So if you don’t have an employment agreement, ask your employer for one. You could offer to create one yourself using the Employment Agreement Builder on the business.govt.nz website and give it to your employer to read and consider. If you can’t agree on the conditions of the employment agreement, your employer must still keep a copy of the draft agreement until the final version has been agreed to.
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What is supposed to be covered in an employment agreement?
These are the things that have to be included in an employment agreement by law:
- the names of the parties (the employer and the employee)
- description of the employee’s duties
- the location of work
- the hours of work – see also below
- pay details - how much the employee will be paid (must be at least the minimum wage) as well as how, and how frequently they will be paid.
- a description of the process for resolving any disputes between the parties, including information about raising a personal grievance
- public holiday entitlements – this must be at least time-and-a-half payment
- how restructuring situations will be handled
There are also a number of minimum conditions that have to be met whether they are included in the agreement or not, e.g. your annual leave entitlement.
Most agreements will have additional clauses to cover your particular employment situation, for example whether your job position will be full time or part time, or whether there is a trial period.
There is an Employment Agreement Builder on the business.govt.nz website to help you create an employment agreement which contains the necessary clauses.
Any employment agreement signed after 31 March 2016 must include the hours, days and times of work if these have been agreed to between employer and employee.
If the employer requires the employee to be available to work above the agreed hours but can’t guarantee that work will be available at those times, then this requirement must be included in the employment agreement, along with compensation rates that apply to those hours if the employee is not asked to work.
An employment agreement can’t include a requirement about employee availability unless it also includes a guaranteed number of hours of work. More about this type of work arrangement is on our Hours of work and wages page.
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Can my employer put me on a fixed-term employment agreement without good reason?
Your employer must have a good reason for employing you for a fixed term.
Sometimes employers and employees agree that the employment will be for a set period of time or until the work is completed. Fixed-term employment agreements should only be used where there are genuine reasons for having a fixed-term arrangement, and the reasons must be set out in writing in the employment agreement.
For example, it might be to cover a period of parental leave, or in order to work on a specific short term project or event. Fixed-term agreements can’t be used as a way of reducing an employee’s legal rights or checking whether someone is suitable for permanent employment.
An employer can’t hire someone on a fixed term agreement where the job is really a permanent one and the employer just wants to avoid having to go through a fair disciplinary or dismissal procedure if there are problems.
With fixed-term agreements, special provisions can apply for annual holidays, sick leave and bereavement leave. If you are concerned that your employer has given you a fixed term employment agreement but does not have a good reason to do so, you can phone Employment New Zealand on 0800 20 90 20 for information and advice.
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Why does my employment agreement say “Contract for service”?
This term is generally used to describe an agreement between a business/employer and an independent contractor. It means that if you sign the contract you will be working as an independent contractor (and therefore not have the protections that an employee has). You can read more about Independent contractors.
As an employer, can I make changes to my workers’ employment agreements without consulting them?
No. An employer can’t change the terms of the employment agreement without agreement from the employee. If your employees are under a collective employment agreement, you would need to negotiate with the union about making changes.
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Can I get free legal advice about my employment agreement?
Your local CAB can link you up with free legal advice in your local community. Some CABs hold legal clinics where you can get free legal advice from a qualified lawyer.
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What are my rights as a casual employee?
A casual employee’s rights are the same as any other employee’s in respect of dismissal, freedom from discrimination or harassment and ensuring they receive the benefits written into their employment agreement.
The main difference for a casual employee is that you only come to work when your boss asks you to, and you agree to come in. For example, you may be employed on an on-call basis, providing cover when illness or unexpected absenteeism requires extra personnel.
If you work a regular pattern of hours each week then you might actually be a part-time worker rather than a casual employee. A part-time worker has regular hours that they work each week.
Casual employees must have a written employment agreement. Each time the employee accepts an offer of work it is treated as a new period of employment. Whether you are entitled to things like overtime will depend on what's in your employment agreement.
Because a casual employee only works from time to time, and not on a regular basis, entitlements to parental leave, sick leave and bereavement leave will be different to that of other types of employees.
For more information see the Ministry of Business, Innovation and Employment's Employment New Zealand website or contact your local Citizens Advice Bureau.
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Is internship a type of employment? What are my rights as an intern?
An internship is where a person (usually a tertiary student) works for an organisation or business for a short period of time - usually for few months) in order to get work experience. The idea is that the intern learns about the job and accumulates experience that makes it easier for them to find a full time job in their industry of interest – it is often an obligatory part of a tertiary course. Some employers pay their interns but many do not.
Internships are not covered by the Employment Relations Act. If you are an intern, your employment rights will depend on whether your working relationship resembles that of an employee or a volunteer. You can read our information about the rights and obligations of a volunteer and in relation to health and safety.
The Employment New Zealand website has some information about determining your employment status when you are an intern.