Employment contract advice for employees in New Zealand

Receiving a job offer is an exciting step, but before you accept, it’s essential to review your employment contract carefully. This document sets out your rights, responsibilities, and obligations in your new role. The details may look straightforward, but the fine print can significantly affect your pay, leave, and future opportunities.

This guide provides practical employment contract tips tailored for employees in New Zealand. With the right knowledge, you’ll feel confident that your agreement is both fair and legally compliant.

What are employment contracts?

An employment contract is a legally binding written employment agreement between an employer and an employee. It outlines your job description, salary payable, hours, leave entitlements, and workplace expectations.

By law, every employee must have a written agreement. These sit within the wider framework of employment legislation, which sets out minimum rights such as public holidays, rest breaks, and protection against discrimination.

There are two main types of employment agreements in New Zealand.

Individual employment agreement: negotiated between one employee and their employer.
Collective employment agreement: negotiated by a union on behalf of employees

Important note: Your contract cannot provide for less than the legal minimum standards. Any terms that reduce rights to things like annual leave, wage rate, or sick leave are unenforceable — but they can include extra benefits that improve on the minimum

Types of employment contracts in New Zealand

Understanding the types of employment contracts is critical, as each offers different rights and obligations.

Permanent employment contracts are ongoing, with full or part-time hours. Includes all leave entitlements.
Casual employment contracts typically do not guarantee hours, and shifts are offered as needed. Employees must still receive at least the minimum wage and holiday pay.
Fixed-term employment contracts are set for a defined period, project, or season. To be valid, there must be a genuine reason (e.g. parental leave cover). A fixed term must include an expected end date or event.
New employment contracts for existing employees are sometimes issued when job scope changes. This must be negotiated in good faith.

It’s also important to understand the difference between an employee and someone in other jobs, such as contractors. A contractor runs their own business and isn’t entitled to employee benefits like paid leave.

Red flag: If a potential employer offers you contract work but expects you to follow the same rules as an employee, this could be sham contracting and may lead to employment relationship problems.

Employment contract review checklist

Before signing, run through this employment contract checklist to make sure nothing is missing.

Position and duties: Does the title and description match what was discussed? Ensure it reflects the actual role you anticipate performing.
Remuneration: Check that the wage rate or salary is stated clearly, and whether benefits are paid separately or included.
Agreed hours: Confirm expected hours, overtime, and whether unpaid meal breaks are included.
Leave: Annual leave, sick leave, parental leave, and public holidays must meet minimum standards.
Trial period: These are only valid in businesses with fewer than 20 employees and must be stated in writing.
Probation period: Separate from a trial period, probation must be supported by a fair process.
Termination & notice: What’s the required notice period for both you and the employer?
Confidentiality & Intellectual Property (IP): Contracts usually require you to keep business information private and state that any work you create on the job belongs to the organisation.
Restraint of trade clause: May limit you from working in other jobs or starting a similar business after leaving. Any restraint of trade must be reasonable in scope, location, and duration.
Employment protection provision: Protects employees in case the business is sold or restructured.

How to negotiate your employment contract

Many employees don’t realise they can negotiate. But negotiating employment contracts is normal and shows you understand your value.

Areas you can negotiate include:

Salary and benefits: Use the Hays Salary Guide for market benchmarks.
Job scope and title: If the role is broader than the job description, request a higher title or salary.
Flexibility: Prefer hybrid work? Ask for a clause that protects flexible start/finish times or remote work options.
Additional terms: Training budgets, wellness leave, or professional memberships can sometimes be added to top up salary expectations.

Here’s a sample script:

“Thank you for the job offer. I’m very interested in the role. I’ve reviewed the contract and would like to discuss the salary package. Based on market data and my experience in [specific skill], I was hoping for [desired figure]. Is there flexibility on this?”

Top tip: When discussing salary expectations, explain your reasoning clearly and professionally. If the employer isn’t able to adjust pay, think about other options you could negotiate, like an extra week of annual leave or funding for professional development. The aim is to find a fair outcome that works for both you and the employer.

Can an employer change a signed contract?

Once signed, an individual agreement or collective employment agreement cannot be changed unless both parties agree. A new individual agreement or variation must be recorded in writing.

If an employer tries to change employment contract terms — such as agreed hours or location — without your consent, this may breach the legal requirement for good faith. Disputes may be taken to the Employment Relations Authority.

Important note: Any new agreement must be entered into voluntarily. If an employer pressures you to sign under duress, that could amount to unfair bargaining.

Hays is here to help

Reviewing a contract or starting a new role? Talk to a recruiter for tailored employment contract tips for employees.

FAQs

Can a contract stop me from working in other jobs?

Yes, but only in certain circumstances. A contract might include a restraint of trade clause, which can restrict you from working for competitors or starting a similar business after you leave.

For it to be enforceable, the restraint must be reasonable in scope, time, and location, and it must genuinely protect the employer’s business interests (like client lists or trade secrets). If it goes too far, the Employment Relations Authority or a court may not uphold it.

What is the 30-day union rule in NZ?

Under the Employment Relations Act, if a workplace has a collective employment agreement negotiated by a union, any new employees who join the business must initially be employed on the same terms and conditions as that collective agreement for their first 30 days. After this, they can either:

Join the union and remain on the collective agreement, or
Negotiate an individual employment agreement with the employer.

This rule is designed to prevent new hires from being offered less favourable conditions than union members.

What’s the difference between contingent and contract work?

Contingent vs contract work can be confusing, but the key difference is how you’re hired and the level of security you receive.

Contract work: You’re employed on a fixed-term employment contract (for example, six months or the length of a project). You are still an employee, which means you’re entitled to rights like holiday pay, sick leave, and public holidays.
Contingent work: A broader category that covers casual, agency, or project-based roles. You might be an employee or an independent contractor, depending on the arrangement. Contingent roles offer more flexibility but usually less certainty.

In short: contract work = fixed-term employee with full rights, while contingent work = flexible, short-term roles that may not always carry the same benefits.