Fixed and Other Agreements



Fixed and Other Agreements
Fixed-term employment agreements & probation or trial periods. There are extra rules employers and employees need to know for fixed-term agreements and if they agree to an initial probationary or trial period.


a) Fixed-term employment
Sometimes employers and employees agree that employment will be for a set period of time (e.g. for six months) or until a certain event occurs (e.g. until a particular project ends) or until work is completed (e.g. until the fruit is picked).

Employers and employees can agree to fixed-term employment where:

  • There is a genuine reason for doing so (such as seasonal work, project work, temping work, or where the fixed-term employee is filling in for a permanent employee on leave), and
  • The employer advises the employee of those reasons and how or when the employment will end, and does so prior to employing the employee.

In other words, the employer must make these things clear to the employee at the outset.
It is desirable that these things be recorded in writing, either in an employment agreement or in correspondence. We provide you examples of wording that might be included in a letter.

An employer may not employ someone on a fixed-term agreement where the job is really a permanent one and the employer really wants to avoid having to go through a fair disciplinary or dismissal procedure if there are problems.

Special provisions can apply for the provision of annual holidays, sick and bereavement leave to fixed term employees. These are outlined in the holidays section of the Employment Relations Services website (www.ers.dol.govt.nz/holidays_act_2003), or you can phone 0800 800 863 for information.


b) Examples of wording for fixed-term agreements

Example 1

" If you accept the position, please note that it is for a fixed term.
This is because your job will be to prune trees in the west block, and your job will cease when all of the trees are pruned. I estimate that this pruning job will take you and your co-workers two months from start date on Monday 24 November 2003."

Example 2

" If you accept the position, please note that it is for a fixed term.
The reason for this is that you will be covering for an existing employee who has taken four months' leave. That employee will return to work on 26 April 2004, and will need to be brought up-to-date by you in the week ending 7 May 2004. As a consequence, your employment will cease on 7 May 2004."

Example 3

If you accept the position, please note that it is for a fixed term.
The reason for this is that you will be working on a project to develop a web strategy and build a new website. The project plan for developing this strategy and the site build is attached. Note that the project will end on 28 November 2003. At that time, your employment will cease."

c) Probation or trial periods

Employers and employees may agree to an initial probationary or trial period. This must be recorded in writing in the employment agreement. If the employer thinks there are problems, the employer still needs to follow a fair disciplinary or dismissal procedure. The employer cannot merely tell the employee to go at the end of the trial period.

Sometimes an employer may ask job applicants to demonstrate their skills prior to making a decision on whether to employ them. Such arrangements may be permissible where the duration and tasks are limited and designed to give the employer a fair opportunity to assess the skills. Employers may not use such an arrangement to get work done without having to pay for it.