{"id":1391,"date":"2020-12-16T03:41:09","date_gmt":"2020-12-16T03:41:09","guid":{"rendered":"http:\/\/nz.legalvision.com.au\/?p=1391"},"modified":"2026-04-16T19:22:02","modified_gmt":"2026-04-16T06:22:02","slug":"employment-agreement","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/employment\/employment-agreement\/","title":{"rendered":"Key Terms to Include in Your Employment Agreement in NZ"},"content":{"rendered":"\n<p><span style=\"font-weight: 400\">An employment agreement is a legally required written contract in New Zealand that sets out the terms of the working relationship between you and your employee, including key details such as the role, hours, pay, and how workplace issues will be resolved. It provides clarity for both parties, helps prevent disputes, and ensures your business meets its legal obligations under employment law.\u00a0 This article explains what an employment agreement is, what terms it must include, and why it is essential for your business.<\/span><\/p>\n\n\n    <div class=\"my-7 lg:my-10 border-y-2 border-gray-100 py-7 lg:py-10 flex flex-col sm:flex-row items-start gap-10\">\n                    <img decoding=\"async\" class=\"w-52 mx-auto my-0! rounded\" src=\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/2\/2022\/09\/23172253\/how-to-hire-and-inspire-560x792-1.jpg\" alt=\"Front page of publication\"\n                 loading=\"lazy\" width=\"208\" height=\"298\">\n                <section>\n            <div class=\"text-2xl font-bold\">NZ How to Hire and Inspire<\/div>\n            <div class=\"body-text\">\n                <p>Hiring new employees for your NZ business can be complicated. Let us help you scale up and reach your next milestone faster with this free employer guide.<\/p>\n            <\/div>\n            \n\n<a href=\"https:\/\/go.legalvision.co.nz\/nz-how-to-hire-and-inspire.html\" class=\" block px-5 py-3.5 max-w-fit bg-orange button__hover transition rounded text-white font-bold text-lg no-underline uppercase leading-tight text-center\" target=\"\" rel=\"\">Download Now<\/a>        <\/section>\n    <\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Types of Employment Agreements<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">If the employee is not a union member, they must have an individual employment agreement. Alternatively, if a collective agreement covers the employee, they can also accept additional individual terms by signing a written contract. The main types of employment agreements include:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">permanent full-time or part-time;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">casual; or<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">maximum\/fixed-term.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Terms That You Must Include<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">The law requires you to include certain terms in your employment agreement, including:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">the name of your business and the employee;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">a description of the work to be performed;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">the employee\u2019s place of work;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">agreed hours of work, including the number of hours, start and finish times and the days of the week the employee will work;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">the agreed wage rate or salary (equal or greater to the <\/span><a href=\"https:\/\/www.govt.nz\/browse\/work\/workers-rights\/minimum-wage\/\"><span style=\"font-weight: 400\">minimum wage<\/span><\/a><span style=\"font-weight: 400\">) and how you will pay it;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">the process to resolve employment relationship problems, including that the employee must raise personal grievances within 90 days; and<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">the nature of the employment, such as fixed term, casual, or permanent.<\/span><\/li>\n<\/ul>\n\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular 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These might include:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">the trial or probationary period;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">the notice period;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">how to deal with confidential information;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">managing intellectual property (IP); and<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">a restraint of trade.<\/span><\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Trial Period or Probationary Period<\/span><\/h3>\n\n\n\n<p><span style=\"font-weight: 400\">You will often want to gauge whether the employee you intend to hire has the requisite skills to do the job. A trial period or probationary period can give you a fair opportunity to assess the employee\u2019s skills and abilities. You cannot impose a probationary period after a trial period.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">However, you can only implement a <a href=\"https:\/\/legalvision.co.nz\/employment\/what-is-an-employment-trial-period-in-new-zealand\/\">trial period<\/a> if you have fewer than 20 employees. You should specify the trial period provisions in writing in your employment agreement, outlining:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">a specified amount of days (not exceeding 90 days) that the employee is to serve a trial period;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">your right to dismiss the employee during that period; and<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">that the employee is not entitled to bring a personal grievance or other proceedings in respect of the dismissal if you choose to terminate their employment.<\/span><\/li>\n<\/ul>\n\n\n\n<p>It is also important to note that if you choose to implement a 90-day trial period, the employee must sign the employment agreement prior to commencing work. Otherwise, the 90-day trial period will be invalid.<\/p>\n\n\n\n<div class=\"box box--info box--icon\">\n<p><span style=\"font-weight: 400\">If you have 20 or more employees, you may nevertheless choose to opt for a probationary period. If so, you must include this in the employment agreement.<\/span><\/p>\n<\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Notice Period<\/span><\/h3>\n\n\n\n<p><span style=\"font-weight: 400\">The notice period outlines how many weeks\u2019 or months\u2019 notice the employee must give you if they resign. This period also applies to you, should you wish to terminate the employee.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">You can also include a right to direct the employee not to report for work during their notice period and pay them in lieu.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">If there is no notice period in the employment agreement, you need to give \u2018fair and reasonable\u2019 notice. This depends on the employee\u2019s:&nbsp;<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">length of service;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">type of job; and<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">how long it would take to replace that employee.&nbsp;<\/span><\/li>\n<\/ul>\n\n\n\n<div class=\"box box--info box--icon\">\n<p><span style=\"font-weight: 400\">It is much clearer for both sides if you clarify the notice period in the employment agreement.<\/span><\/p>\n<\/div>\n\n\n\n<p>Additionally, if you include a 90-day trial period, you may want to include a different notice period for termination during this period.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Confidential Information<\/span><\/h3>\n\n\n\n<p><span style=\"font-weight: 400\">Employees often have access to <a href=\"https:\/\/legalvision.co.nz\/commercial-contracts\/what-is-workplace-confidentiality-in-new-zealand\/\">confidential information<\/a> during the course of their employment. Importantly, you will want to ensure that this information is protected. This can include documents such as:&nbsp;<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">client lists;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">business plans; and&nbsp;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">trade secrets.<\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400\">You need to have \u2018confidential information\u2019 clearly defined so it is clear to the employee what you are trying to protect.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400\">I<\/span>ntellectual Property (IP) <\/h3>\n\n\n\n<p><span style=\"font-weight: 400\">The employment agreement needs to clearly outline that any IP developed, improved or created during the course of employment remains your property. Hence, in the event that an employee chooses to keep the IP for themselves, then it may be a breach of their employment agreement as well as the good faith obligations an employee owes to an employer. Nevertheless, you should clearly define what IP your agreement covers <\/span>in the employment contract.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Restraint of Trade<\/span><\/h3>\n\n\n\n<p><span style=\"font-weight: 400\">You can use a <a href=\"https:\/\/legalvision.co.nz\/commercial-contracts\/restraint-of-trade-clause-new-zealand\/\">restraint of trade clause<\/a> to protect your business\u2019 commercially sensitive information, by restricting employee\u2019s business activities when they stop working for you.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">There are two main types of restraint of trade clauses, including:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">non-competition, preventing your former employees from working for a competing business; and<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">non-solicitation, restricting a former employer from soliciting their former clients, colleagues, contacts, etc.<\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400\">To remain legally enforceable, restraint of trade clauses are usually limited by a:&nbsp;<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">geographic area; and&nbsp;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">specific period of time post-employment.<\/span><\/li>\n<\/ul>\n\n\n\n<p>Ultimately, a restraint of trade clause protects your business by preventing former employees from soliciting clients or working for a competitor. Nevertheless, you cannot unreasonably prevent an employee from seeking employment in that particular field.<\/p>\n\n\n\n<div  class=\"box box--icon box--info\">\n    <p dir=\"auto\"><strong>Key Statistics<\/strong><\/p>\n<ol dir=\"auto\">\n<li><strong>5%<\/strong>: 5 per cent of New Zealand employees lack a signed written employment contract, contrary to statutory obligations.<\/li>\n<li><strong>22%<\/strong>: Employment relationship problems lodged with the Employment Relations Authority increased by 22 per cent in 2024.<\/li>\n<li><strong>4.6%<\/strong>: 4.6 per cent of public service employees were on fixed-term contracts in June 2025.<\/li>\n<\/ol>\n<p dir=\"auto\"><strong>Sources<\/strong><\/p>\n<ul dir=\"auto\">\n<li><a href=\"https:\/\/www.employment.govt.nz\/assets\/uploads\/documents\/employment-new-zealand\/2025\/employment-monitor-report-2025.pdf\" target=\"_blank\" rel=\"noopener noreferrer nofollow\">Ministry of Business, Innovation and Employment Employment Monitor 2025<\/a><\/li>\n<li><a href=\"https:\/\/www.era.govt.nz\/assets\/Employment-Relations-Authority-Annual-Report-2024.pdf\" target=\"_blank\" rel=\"noopener noreferrer nofollow\">Employment Relations Authority Annual Report 2024<\/a><\/li>\n<li><a href=\"https:\/\/www.publicservice.govt.nz\/data\/workforce-data\/conditions-of-employment\" target=\"_blank\" rel=\"noopener noreferrer nofollow\">Public Service Commission Workforce Data 2025<\/a><\/li>\n<\/ul>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\">What Happens if I Do Not Provide a Written Employment Agreement? <\/h2>\n\n\n\n<p>Employers must provide employees with a copy of their written employment agreement. If they do not, it may result in a fine of $1000 per employee. Although oral employment agreements are still enforceable, a written agreement is vital to ensure:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>both parties understand the terms of the contract; and <\/li>\n\n\n\n<li>there are no discrepancies if a dispute arises.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Key Takeaways<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">It is essential to have a well-drafted employment agreement in place with your employees. There are some terms that you must include, while others are highly suggested so that both you and your employee are clear on the relationship. It is advisable to include terms such as:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">the names of the parties;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">a description of the work to be performed;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">the place of work and hours of work;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">the wage rate or salary;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">how to resolve employment relationship problems;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">the nature of the employment;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">a defined trial period or probation period;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">the notice period;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">how to handle confidential information;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">intellectual property matters; and<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">a restraint of trade.<\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400\">If you need help drafting or reviewing an employment agreement tailored to your business operations, our experienced&nbsp;<a href=\"https:\/\/legalvision.co.nz\/employment-lawyers-lp\">employment lawyers<\/a>&nbsp;can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on <a href=\"tel:+64800005570\" class=\"AVANSERnumber dynamic-number\">0800 005 570<\/a> or visit our&nbsp;<a href=\"https:\/\/legalvision.co.nz\/membership\/\">membership page<\/a>.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Frequently Asked Questions<\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1606880228344\"><strong class=\"schema-faq-question\"><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong>What should I include in my employment contract?<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong> <p class=\"schema-faq-answer\">Your employment contract should include your employee\u2019s name, a description of the work they will perform, agreed hours of work, their wage rate or salary and the nature of their employment. It is also a good idea to include information on the employee\u2019s trial or probationary period, their notice period, how to deal with confidential information and a restraint of trade clause.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1606880258379\"><strong class=\"schema-faq-question\"><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong>Is an employment agreement the same as a contract?<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong> <p class=\"schema-faq-answer\">Yes, an employment agreement is the same thing as an employment contract. However, these two documents are different from an offer letter, as they create a legally binding relationship between you and the employee.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1606880271477\"><strong class=\"schema-faq-question\"><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong>What is a non-competition agreement in an employment contract?<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong> <p class=\"schema-faq-answer\">A non-competition agreement is a type of restraint of trade clause. It will prevent your employee from working for a competing business if they leave your position of employment.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1606989773267\"><strong class=\"schema-faq-question\"><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong>Why should I have my employees sign an employment agreement?<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong> <p class=\"schema-faq-answer\">You can indeed employ someone without asking them to sign an employment contract. However, you should definitely sign a written agreement with your employee. This will help both of you to understand and clarify the relationship of employment, which will be particularly helpful if any disputes arise.<\/p> <\/div> <\/div>\n","protected":false},"excerpt":{"rendered":"<p>An employment agreement is a legally required written contract in New Zealand that sets out the terms of the working relationship between you and your employee, including key details such as the role, hours, pay, and how workplace issues will be resolved. It provides clarity for both parties, helps prevent disputes, and ensures your business<a href=\"https:\/\/legalvision.co.nz\/employment\/employment-agreement\/\">Continue reading <span class=\"sr-only\">&#8220;Key Terms to Include in Your Employment Agreement in NZ&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13387,"featured_media":121,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"1412,1180,202122,202312,202589,1699","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[5],"tags":[24,25,54,108,109,153],"class_list":["post-1391","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-employment","tag-startup","tag-small-business","tag-medium-business","tag-employment-agreements","tag-employment-contract","tag-employment-lawyer"],"acf":[],"yoast_head":"<!-- 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