Fixed-Term Employment Agreement (New Zealand)
Employment Relations Act 2000 (ERA) s66 — Fixed-Term with Genuine Reason Requirement
This Fixed-Term Employment Agreement (the “Agreement”) is made under the Employment Relations Act 2000 (ERA) between:
[Employer Name] (NZBN: [Employer NZBN]), of [Employer Address], [Employer City], [Employer Region] [Employer Postcode] (the “Employer”); and
[Employee Name], of [Employee Address], [Employee City], [Employee Region] (the “Employee”).
Together referred to as the “Parties”.
1. GOOD FAITH
1.1 The Parties acknowledge and agree that they owe each other the duty of good faith as set out in section 4 of the Employment Relations Act 2000. This duty applies to all aspects of the fixed-term employment relationship, including any process that may affect the continuation of the Employee’s employment.
2. FIXED TERM AND COMMENCEMENT
2.1 The Employee is engaged on a fixed-term basis commencing on [Start Date] and ending on [End Date] (the “Fixed Term”), unless terminated earlier in accordance with the terms of this Agreement.
2.2 Employment under this Agreement automatically ceases on [End Date] without the need for either party to give notice of termination. No notice of termination is required at the expiry of the Fixed Term.
2.3 This Agreement is an Individual Employment Agreement for the purposes of Part 6 of the Employment Relations Act 2000.
3. GENUINE REASON FOR FIXED TERM
3.1 As required by section 66(2)(b) of the Employment Relations Act 2000, the genuine reason based on reasonable grounds why this employment is for a fixed term is as follows:
[Genuine Reason]
3.2 The Employer represents that the reason stated above is genuine and based on reasonable grounds. The Employee acknowledges that the fixed-term arrangement has been explained and agreed to before commencement of work, in accordance with section 66(1) of the ERA.
3.3 If the genuine reason stated above does not in fact justify a fixed-term arrangement, the Employee may not be an employee for a fixed term and the employment may be treated as permanent, in accordance with section 66(4) of the ERA.
4. POSITION, DUTIES AND PLACE OF WORK
4.1 The Employee is engaged in the position of [Job Title] for the duration of the Fixed Term.
4.2 The Employee’s primary place of work is [Place Of Work]. The Employer may, on reasonable notice, require the Employee to perform work at other locations.
4.3 The Employee’s key duties and responsibilities during the Fixed Term include:
[Duties Summary]
4.4 The Employer may, from time to time and in good faith, reasonably vary the Employee’s duties provided such variation does not amount to a fundamental change to the nature of the role.
5. HOURS OF WORK
5.1 The Employee’s ordinary hours of work are [Hours Per Week].
5.2 The Employee’s usual working pattern is [Working Days].
5.3 The Employee may be required to work reasonable additional hours beyond the ordinary hours specified above. Rest breaks and meal breaks will be provided in accordance with the Employment Relations Act 2000.
6. REMUNERATION
6.1 The Employer will pay the Employee [Salary] per annum (gross, before tax), payable [Pay Frequency] by direct credit in arrears.
6.2 This salary meets or exceeds the adult minimum wage under the Minimum Wage Act 1983 and the Minimum Wage Order in force at the date of this Agreement.
6.3 The Employer will deduct PAYE income tax and any other required statutory deductions (including KiwiSaver contributions and student loan repayments, where applicable) from the Employee’s gross remuneration in accordance with the Income Tax Act 2007 and related legislation.
6.4 The Employer will provide the Employee with a payslip for each pay period.
7. KIWISAVER
7.1 If the Employee is a member of KiwiSaver, the Employer will make compulsory employer contributions at the rate of [KiwiSaver Rate] of the Employee’s gross salary, in accordance with the KiwiSaver Act 2006.
7.2 The minimum employer contribution rate is 3% of the Employee’s gross salary. Employee contributions will be deducted from gross pay at the rate elected by the Employee (3%, 4%, 6%, 8%, or 10%).
7.3 New employees aged 18 to 64 who are NZ citizens or permanent residents will be automatically enrolled in KiwiSaver in accordance with the KiwiSaver Act 2006, unless the Employee is already a member or opts out within the prescribed period.
8. LEAVE ENTITLEMENTS
8.1 The Employee is entitled to all statutory leave entitlements during the Fixed Term on the same basis as a permanent employee, accruing progressively from the commencement date. These include:
- Annual Leave: 4 weeks of paid annual leave per year after 12 months of continuous employment, accruing progressively (section 16, Holidays Act 2003). Unused annual leave is paid out on termination or expiry of the Fixed Term.
- Sick Leave: 10 days of paid sick leave per year after 6 months of continuous employment (section 65, Holidays Act 2003).
- Bereavement Leave: 3 days for close family members, 1 day for others (sections 69–70, Holidays Act 2003).
- Public Holidays: Paid day off on each of the 11 public holidays and applicable regional anniversary day where the day would otherwise be a working day (section 44, Holidays Act 2003).
- Family Violence Leave: 10 days per year from the first day of employment (sections 72A–72H, Holidays Act 2003).
- Parental Leave: Entitlements under the Parental Leave and Employment Protection Act 1987, subject to qualifying periods.
8.2 On expiry of the Fixed Term (or earlier termination), the Employer will pay out any accrued and untaken annual leave at the Employee’s base rate of pay, calculated in accordance with the Holidays Act 2003.
9. ACCIDENT COMPENSATION (ACC)
9.1 The Employee’s entitlements in respect of personal injury are governed by the Accident Compensation Act 2001 (ACC Act). Under the ACC scheme, the Employee is covered for personal injury by accident, regardless of fault, and cannot bring proceedings against the Employer in respect of any personal injury covered by the ACC scheme.
10. EARLY TERMINATION
10.1 Notwithstanding the Fixed Term, this Agreement may be terminated before [End Date] in the following circumstances:
- By either party providing [Early Termination Notice Period] written notice of early termination, or payment in lieu of notice.
- By the Employer without notice in the event of serious misconduct by the Employee, following a fair and reasonable process consistent with the good faith obligations in section 4 of the ERA.
- By mutual written agreement of the Parties.
10.2 Except in the case of termination for serious misconduct, the Employer’s liability on early termination is limited to payment of the Employee’s salary, KiwiSaver contributions, and accrued entitlements up to the date of termination, plus the applicable notice period. The Employer is not liable for the balance of salary that would have been earned for the remainder of the Fixed Term.
10.3 Upon any early termination or expiry of the Fixed Term, the Employer will pay the Employee all accrued salary, KiwiSaver contributions, and annual leave entitlements to the date of termination or expiry.
11. EMPLOYMENT RELATIONSHIP PROBLEMS
11.1 If the Employee has a problem with their employment, they are encouraged to raise the matter with the Employer in the first instance for informal resolution.
11.2 If the matter cannot be resolved informally, mediation services are available free of charge through the Ministry of Business, Innovation and Employment (MBIE). Either party may also apply to the Employment Relations Authority for a determination.
11.3 Personal Grievance: The Employee must raise a personal grievance within 90 days of the date on which the action alleged to amount to a personal grievance occurred, as required by section 114 of the ERA.
12. GENERAL PROVISIONS
12.1 Policies and Procedures: The Employee must comply with all reasonable workplace policies, procedures, and codes of conduct of the Employer in force from time to time during the Fixed Term.
12.2 Health and Safety: The Employer is a PCBU under the Health and Safety at Work Act 2015 and has a primary duty to ensure the health and safety of workers. The Employee must take reasonable care for their own health and safety and comply with all reasonable health and safety instructions.
12.3 Confidentiality: The Employee must not disclose any confidential information of the Employer to any third party without the Employer’s consent, during or after the Fixed Term.
12.4 Privacy: The Employer will handle the Employee’s personal information in accordance with the Privacy Act 2020 and the Information Privacy Principles.
12.5 Variation: Any variation to this Agreement must be in writing and signed by both Parties, as required by section 65(2)(b) of the ERA.
12.6 Entire Agreement: This Agreement constitutes the entire agreement between the Parties with respect to the fixed-term employment relationship and supersedes all prior representations and agreements.
12.7 Governing Law: This Agreement is governed by the laws of New Zealand, including the Employment Relations Act 2000, the Holidays Act 2003, the Health and Safety at Work Act 2015, the KiwiSaver Act 2006, and the Accident Compensation Act 2001. The Parties submit to the jurisdiction of the Employment Relations Authority and the courts of New Zealand sitting in [Governing Region].
IN WITNESS WHEREOF, the Parties have executed this Fixed-Term Employment Agreement on the date last signed below.
SIGNED for and on behalf of the EMPLOYER:
Employer: [Employer Name]
NZBN: [Employer NZBN]
Address: [Employer Address], [Employer City], [Employer Region] [Employer Postcode]
SIGNED by the EMPLOYEE:
Employee: [Employee Name]
Address: [Employee Address], [Employee City], [Employee Region]
Employer
________________
Signature
Employee
________________
Signature
What Is a Fixed-Term Employment Agreement (New Zealand)?
A Fixed-Term Employment Agreement in New Zealand sets out the duties, hours, pay, leave, and termination terms between employer and employee, consistent with the minimum entitlements guaranteed by the Employment Relations Act 2000. It defines duties, remuneration, working hours, leave, and termination procedures binding employer and employee.
The legal framework for fixed-term employment in New Zealand is established primarily by section 66 of the Employment Relations Act 2000. The critical feature that distinguishes New Zealand's approach from other jurisdictions is the mandatory genuine reason requirement. Under section 66(2)(b) of the ERA, a fixed-term employment agreement must state the genuine reason, based on reasonable grounds, why the employment is for a fixed term. This is not merely a established standards recommendation — it is a mandatory statutory requirement. A fixed-term agreement that does not state a genuine reason, or that states a reason that is not actually genuine, is not a valid fixed-term agreement, and the employment may be treated as permanent employment under section 66(4) of the ERA.
The genuine reason requirement reflects the ERA's broader framework based on the principle of good faith. Section 4 of the ERA imposes a duty of good faith on all parties to an employment relationship, requiring them to be active and constructive, responsive, communicative, and not deceptive or misleading. An employer who uses a fixed-term agreement as a device to avoid providing job security — without a genuine operational reason for the fixed term — is acting inconsistently with the good faith obligations.
Fixed-term employees in New Zealand are entitled to the same statutory leave entitlements as permanent employees, accruing progressively from commencement. They are also entitled to KiwiSaver employer contributions under the KiwiSaver Act 2006, ACC coverage under the Accident Compensation Act 2001, and the protection of the personal grievance process under the ERA. On expiry, accrued but untaken annual leave must be paid out.
When Do You Need a Fixed-Term Employment Agreement (New Zealand)?
A Fixed-Term Employment Agreement is needed whenever an employer in New Zealand intends to engage an employee for a defined period with a natural end date — rather than on an ongoing permanent basis — and a genuine reason exists for the fixed-term arrangement. Common circumstances in which a fixed-term agreement is appropriate include the following.
Temporary replacement: Where an employee is on parental leave, long-term sick leave, or other approved extended leave, and the employer needs to engage a replacement for the duration of that leave. The absence of the permanent employee provides the genuine reason for the fixed term under section 66 of the ERA.
Project-based engagements: Where the employer is undertaking a specific project — such as a research grant, a technology implementation, or a building construction — and requires staff only for the duration of that project. The completion of the project provides the genuine reason for the fixed term.
Externally funded roles: Where a position is funded by a government grant, research grant, or other external funding source that has a defined end date. The limitation on external funding provides the genuine reason for the fixed term.
Seasonal work: Where the nature of the business involves genuine seasonal demand peaks — such as in tourism, agriculture, or events — that create a defined period of increased staffing need. Employers should note that using fixed-term agreements for the same seasonal roles year after year may be scrutinised for compliance with the genuine reason requirement.
A written fixed-term agreement is also needed to properly document the early termination provisions, the genuine reason for the fixed term, and the employee's entitlement to have accrued annual leave paid out on expiry. All of these matters are required or recommended under the ERA and the Holidays Act 2003.
What to Include in Your Fixed-Term Employment Agreement (New Zealand)
A legally compliant Fixed-Term Employment Agreement for New Zealand must address the following key elements.
The genuine reason clause is the most distinctive and important provision in a New Zealand fixed-term employment agreement. It must clearly and accurately state the genuine reason, based on reasonable grounds, why the employment is for a fixed term. The reason must be specific — vague statements such as 'to assess the employee's suitability for permanent employment' are not genuine reasons under section 66 of the ERA and may invalidate the fixed-term arrangement. Specific reasons tied to a project, a temporary replacement, a funding period, or a seasonal demand are appropriate.
The fixed term clause must clearly state the start date and end date of the employment, or describe the event or contingency that will cause the employment to end (such as the return from leave of the employee being replaced). Section 66(2)(a) of the ERA requires the agreement to state how and when the fixed term ends.
The genuine reason acknowledgement clause should confirm that the employee was informed of the fixed-term status and the genuine reason before agreeing to the terms, as required by section 66(1) of the ERA. This is important evidence if the arrangement is later challenged.
The early termination clause is critical. Without a clear early termination provision, an employer who ends a fixed-term agreement before the expiry date may be liable for the full remaining salary for the fixed term. The clause should specify the notice period required and confirm the employer's liability is limited to the notice period and accrued entitlements.
The leave entitlements section must address the payout of accrued annual leave on expiry, as required by the Holidays Act 2003. The KiwiSaver and ACC provisions must confirm the employee's entitlements during the fixed term. The good faith and personal grievance clauses must be included as required by section 65(2)(a)(vi) of the ERA. The forms-legal.com Fixed-Term Employment Agreement (New Zealand) provides a ready-to-use template that meets New Zealand legal requirements.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Fixed-Term Employment Agreement (New Zealand) (New Zealand) [Legal document template]. Forms Legal. https://forms-legal.com/new-zealand/employment/contracts/employment-agreement-fixed-term-new-zealand
"Fixed-Term Employment Agreement (New Zealand) (New Zealand)." Forms Legal, 2026, https://forms-legal.com/new-zealand/employment/contracts/employment-agreement-fixed-term-new-zealand.
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author = {{Forms Legal}},
title = {Fixed-Term Employment Agreement (New Zealand) (New Zealand)},
year = {2026},
howpublished = {\url{https://forms-legal.com/new-zealand/employment/contracts/employment-agreement-fixed-term-new-zealand}},
note = {Free legal document template. Based on Employment Relations Act 2000}
}
Frequently Asked Questions
Under section 66 of the Employment Relations Act 2000, an employer may only offer a fixed-term employment agreement if there is a genuine reason based on reasonable grounds why the employment should be for a fixed term. This requirement distinguishes New Zealand from Australia, which has a 2-year maximum term rule under the Fair Work Act 2009 but does not require a specific genuine reason in most cases. In New Zealand, the genuine reason must be stated in the employment agreement. Recognised genuine reasons include: covering the temporary absence of another employee who is on parental leave, sick leave, or other approved leave; completing a specific project or task that has a defined end date; performing work that is related to externally funded activities where the funding is for a limited period; or meeting seasonal demand in an industry with genuine seasonal variation. A desire to 'test out' a new employee or avoid providing job security is not a recognised genuine reason and may cause the Employment Relations Authority to treat the arrangement as permanent employment.
Under section 66(4) of the Employment Relations Act 2000, if an employment agreement purports to be a fixed-term agreement but does not state a genuine reason based on reasonable grounds why the employment is for a fixed term, the employee is not an employee for a fixed term — they are a permanent employee. This means the employer cannot simply let the employment end at the purported end date. To end the employment, the employer would need to follow a proper termination process, which includes substantive justification (a genuine reason to dismiss that would satisfy a fair and reasonable employer) and a procedurally fair process, consistent with the good faith obligations in section 4 of the ERA. The consequence of getting this wrong can be significant: the employee could raise a personal grievance for unjustified dismissal, which may result in reinstatement, compensation, or both.
Yes. Fixed-term employees in New Zealand are entitled to the same statutory leave entitlements as permanent employees under the Holidays Act 2003, accruing progressively from the commencement date. These include: 4 weeks of paid annual leave after 12 months of continuous employment (section 16); 10 days of paid sick leave per year after 6 months of continuous employment (section 65); bereavement leave of 3 days for close family members and 1 day for others (sections 69-70); public holidays on days that would otherwise be working days (section 44), including the 11 national public holidays and any applicable regional anniversary day; 10 days of paid family violence leave per year from the first day of employment (sections 72A-72H); and parental leave under the Parental Leave and Employment Protection Act 1987. On expiry of the fixed term, any accrued but untaken annual leave must be paid out at the employee's base rate of pay. The employee also retains access to the KiwiSaver scheme and ACC coverage throughout the fixed term.
Yes, but the employer must follow a fair and reasonable process consistent with the good faith obligations in section 4 of the Employment Relations Act 2000. An employer who ends a fixed-term agreement before the stated end date without a valid reason and without following a proper process risks a personal grievance claim from the employee. A well-drafted fixed-term agreement should include an early termination clause that specifies the notice period required for early termination (other than for serious misconduct) and confirms the employer's liability is limited to the notice period and accrued entitlements, not the balance of the fixed term. Without an early termination clause, the employer may be liable to pay the employee's salary for the entire remaining period of the fixed term. For serious misconduct, dismissal without notice is possible but must follow a procedurally fair process — the employer must advise the employee of the concerns, allow the employee to respond, and genuinely consider the response before making a decision.
No. Unlike Australia, which introduced a 2-year maximum term restriction under section 333E of the Fair Work Act 2009 in December 2023, New Zealand has no statutory maximum duration for fixed-term employment agreements under the Employment Relations Act 2000. However, the genuine reason requirement in section 66 of the ERA indirectly limits the use of successive or extended fixed-term agreements. If an employer repeatedly renews a fixed-term contract for the same role without a new genuine reason for each term, the Employment Relations Authority may find that the genuine reason requirement is not met, and treat the employment as permanent. Employers who wish to use extended fixed-term contracts or successive fixed terms should require that a fresh genuine reason exists for each new term, and should seek legal advice if uncertain about compliance.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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