Employment Agreements in New Zealand – Why Customisation Matters

An employment agreement is more than a legal formality — it defines the terms of the working relationship, sets expectations, and provides clarity on rights and responsibilities. A well-drafted, customised agreement protects both employers and employees, reduces the risk of disputes, and ensures compliance with New Zealand law.

Legal Requirements for Employment Agreements in NZ

Under the Employment Relations Act 2000, every employee must have a written employment agreement that includes:

The names of the employer and employee.
A clear job description.
Hours of work and any flexibility arrangements.
Pay rate or salary and how it will be paid.
Public holiday, leave, and other entitlements.
A dispute resolution process.

💡 Note: Failing to provide a compliant agreement can lead to penalties from the Labour Inspectorate.

Why Customisation Matters in Employment Contracts

1. Reflects the Actual Role
Avoids vague or generic job descriptions that can lead to disputes over responsibilities.

2. Protects Business Interests
Includes clauses on confidentiality, intellectual property, and post-employment restraints if needed.

3. Clarifies Expectations
Prevents misunderstandings by specifying duties, performance standards, and workplace policies.

4. Ensures Legal Compliance
Keeps terms up-to-date with changes in employment law and industry regulations.

Risks of “Copy and Paste” Agreements

Generic templates often:

Miss key clauses critical to your industry.
Use outdated language that may no longer be enforceable.
Fail to address unique business needs or workplace arrangements.

💡 A poorly written or outdated contract can be challenged and may not hold up in a dispute.

Employment Agreements in New Zealand (FAQs)

Can an employment agreement require an employee to be on-call outside regular hours in NZ?

Yes, but the agreement must clearly state the on-call requirements, any compensation, and ensure compliance with the Employment Relations Act 2000 and the Holidays Act 2003.

Are trial period clauses still valid for all employers in New Zealand?

No. Since 2019, only employers with 19 or fewer employees can use trial period clauses that allow dismissal without a personal grievance claim for unjustified dismissal.

Can restraint of trade clauses in NZ prevent an employee from working for a competitor?

Yes, but only if the clause is reasonable in duration, geography, and scope, and is necessary to protect legitimate business interests such as confidential information or client relationships.

Is it legal to include deductions for training costs in an NZ employment agreement?

Yes, but the deduction clause must be specific, reasonable, and agreed to in writing before the cost is incurred. It must also comply with the Wages Protection Act 1983.

How should employment agreements address remote or hybrid work arrangements?

They should include clear provisions on work location, equipment supply, health and safety compliance at home, communication expectations, and reimbursement for work-from-home expenses.

A small investment in a customised employment agreement can save time, money, and stress in the long run. It also fosters trust by ensuring both parties fully understand their rights and obligations.

At McKenzie Law, we draft and review employment agreements to ensure they are clear, compliant, and customised to your needs.

📞 Contact us today for a consultation.