Employment Relationships



What are the Legal Rules?
The Employment Relations Act 2000 sets out most of the rules for forming an employment relationship, through an employment agreement. The rules differ depending on the circumstances.

Set out below are the rules for the following situations:

  1. There is NO relevant collective agreement.
  2. There IS a relevant collective agreement and the new employee IS a member of the union that negotiated it.
  3. There IS a relevant collective agreement and the new employee IS NOT a union member.


1. When there is NO relevant collective agreement
Here, the employer and the employee negotiate an individual employment agreement which sets out the employee's terms and conditions of employment. This agreement must not have anything in it that is less than what is required by legislation.  Agreement MUST be in writing and the prospective employee has a right to seek independent advice.

An employer must, when offering a person a job:

  • Give the person a copy of the intended individual employment agreement.
  • Advise the person that he or she is entitled to seek independent advice about the intended agreement.
  • Give the person a reasonable opportunity to get that advice.

Under the Employment Relations Act 2000, where there is no collective agreement the individual employment agreement must be in writing and must include:

  • The names of the employer and the employee (to make clear who are the parties to the agreement).
  • A description of the work (to make clear what the employee is actually expected to do).
  • An indication of where the employee is to work.
  • An indication of arrangements relating to working hours.
  • Wage rates or salary.
  • A plain language explanation of services is available to help sort out employment relationship problems.


Fair bargaining.
The employer and employee must bargain in a fair way. The Employment Relations Authority may order compensation or cancel or vary an individual employment agreement in any of the following situations:

  • One of the parties was unable to understand what they were agreeing to by reason of diminished capacity due (for example) to age, sickness, mental or educational disability, a disability relating to communication, or emotional distress.
  • One of the parties relied on the other's knowledge or skill.
  • One party unfairly pressured the other.
  • The employer did not allow the employee the opportunity to seek independent advice.

Final agreement must be in writing.
When the employee accepts the employer's offer, the individual employment agreement must be in writing and contain at least the required terms and conditions of employment. Also, see how to build an individual employment agreement.


2. When there IS a relevant collective agreement and the new employee IS a member of the union that negotiated it.
When there is a collective agreement negotiated by the employee's union covering the work, the employee's minimum terms and conditions of employment must be those set out in the collective agreement. The employer and the employee may agree to other terms that are additional to, or better than, the collective agreement so long as those other terms can comfortably sit alongside those in the collective agreement.


3. When there IS a relevant collective agreement and the new employee is NOT a union member.
Individual employment agreement based on the collective agreement When the employee is not a union member but there is a collective agreement covering the work, the employer and the employee have an individual employment agreement based on the collective agreement.

Details are as follows:

  • For the first 30 days, the employee's individual employment agreement consists of the terms and conditions of employment in the collective agreement. The employer and the employee may also agree to other terms that are additional to, or better than, the collective agreement so long as those other terms can comfortably sit alongside those in the collective agreement.

  • After that 30-day period, the employee's terms and conditions of employment can be varied by agreement. In other words, after (but not before) the end of the 30 days, the employer and employee can agree to vary (upwards or downwards) the terms taken from the collective agreement. The original individual employment agreement cannot provide for the terms and conditions of employment to change automatically at the end of the 30-day period.