Danny Gelb
Employment Law Advocacy

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Employment Fixed Term Agreements

We are regularly asked questions such as: 

 

My employer keeps 'rolling over' my employment agreement on a 6 month fixed term. I am scared that, if I put one foot out of place, they will not renew my employment agreement and I will be out of a job. Can they do this?

 

Many fixed term agreements are not valid. Under Section 66 of the Employment Relations Act 2000, the employer must have a specific reason for a fixed term contract.  An example of a valid, specific reason would be if your employer won a tender to sell ice creams at Mission Bay from 1 December through to 28 February and they wanted to employ you for that three month fixed term period.

 

The employer must:

  1. Have genuine reasons, based on reasonable grounds, for specifying that the employment of the employee is to end in this way.
  2. Advise the employee of when or how his or her employment will end and the reasons for his or her employment ending in this way.

 

With regards to item 1 above, these reasons must not:

  1. exclude or limit the rights of the employee under the Act
  2. be used to establish the suitability of the employee for permanent employment
  3. exclude or limit the rights of an employee under the Holidays Act 2003.

 

For a fixed term employment agreement to be valid (i.e. the employer can rely upon it for the termination of the employee's employment at the expiry of the fixed term) the employment agreement must specify in writing: 

  1. the way in which the employment will end
  2. the reasons for ending the employment in that way.

 

Should a fixed term employment agreement be determined as not valid because it does not comply with what I have just stated, then it is considered a normal, permanent full time agreement. You have, therefore, the same protection as all other employees under New Zealand legislation. The only difference is that the employer can't use the fixed term part of the agreement as a defence against a personal grievance raised by an employee for an unjust termination.

 

Very few of the fixed term agreements that we see are valid. If you have any doubt call us on 0800 HELP ME (0800 435 763) or email us.

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