Employment agreement guide

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Nature and Term of the Agreement

3.1 Type of Agreement
Including a description of the type of agreement is voluntary, but is recommended to ensure that both parties understand the arrangement into which they are entering. Some minimum legal provisions differ according to the type of the agreement. Clarity provides a protection for both employers and employees if disputes over entitlements arise during the term of employment.

An agreement's nature may be defined as:
  • permanent, where an employee is employed for an indefinite duration;
  • fixed term, where an employee is employed for a specific time period; or
  • casual, where an employee is only expected to work from time to time.

    • Before a fixed term agreement can be agreed on there must be a genuine business reason for the fixed term, such as the temporary absense of an existing employee or a specified project to be undertaken.

    Individual Agreement of Ongoing and Indefinite Duration

    This Employment Agreement is an individual employment agreement entered into under the Employment Relations Act 2000. The employment shall commence on [insert date] and shall continue until either party terminates the agreement in accordance with the terms of this agreement. The clauses in this agreement may be varied or updated by agreement between the parties at any time.

    Fixed Term Individual Employment Agreement

    This Employment Agreement is an individual employment agreement entered into under the Employment Relations Act 2000. The parties agree that this is a fixed term employment agreement. This agreement will commence on [insert start date or event], and will end on [insert end date or event]. The Employer has genuine reasons based on reasonable grounds for specifying that the employment agreement is to end at this time, namely [insert reason for fixed term agreement]. The parties also confirm that the Employee has been advised by the Employer when discussing this agreement, the reasons for the employment ending in this way.

    Casual Individual Employment Agreement (Intermittent)

    This Employment Agreement is an individual employment agreement entered into under the Employment Relations Act 2000. The parties to this agreement agree that the nature of the relationship is a casual "as required" employment relationship. The Employer agrees to provide reasonable notice to the Employee regarding when they will be requested to perform duties and the Employee agrees to take reasonable steps to be available for work during [specify time]. The duration of this casual agreement is as follows:

    (i)     This casual agreement shall continue in force until such time as it is terminated by either party pursuant to the termination clause in this agreement.

    Casual Individual Employment Agreement (Fixed Period)

    This Employment Agreement is an individual employment agreement entered into under the Employment Relations Act 2000. The parties to this agreement agree that the nature of the relationship is a casual "as required" employment relationship. The Employer agrees to provide reasonable notice to the Employee regarding when they will be requested to perform duties and the Employee agrees to take reasonable steps to be available for work during [specify time]. The duration of this casual agreement is as follows:

    (i)     The Employer and the Employee are entering into the casual agreement for a fixed period. This period shall start on [insert start date or event] and shall end on [insert end date or event]. The reason for the fixed period is [insert reason for the fixed period].
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    3.2 Probation
    Probation or trial periods can be included in agreements with the agreement of both parties.

    They should be read in conjunction with a type of agreement clause that identifies the nature of the relationship at the end of the probation or trial period. The period of the probation should be relevant to the type of employment and the skill level of the employee. For information on establishing or managing the employment relationship during the trial go to our fact sheet.

    The sample clause below also refers to a termination clause. If this clause appears in your agreement, remember that it should also include a clause regarding termination.

    Probation

    A probation period will apply for the first [insert duration] of employment to assess and confirm suitability for the position. The employer will provide guidance, feedback and any necessary support to the employee. Both parties will promptly discuss any difficulties that arise, and the employer will appropriately warn the employee if he or she is contemplating termination. Any termination must comply with the termination clause in this agreement. This probation period does not limit the legal rights and obligations of the employer or the employee, and both parties must deal with each other in good faith.
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    3.3 Trial Period

    Trial Periods

    A trial period will apply for a period of [NOT EXCEEDING 90 CALENDAR DAYS] employment to assess and confirm suitability for the position. Parties may only agree to a trial period if:

    (i)   The employer employs fewer than 20 employees at the beginning of the day the employment agreement is entered into; and
    (ii)   The employee has not previously been employed by the employer.

    During the trial period the employer may terminate the employment relationship, and the employee may not pursue a personal grievance on the grounds of unjustified dismissal. The employee may pursue a personal grievance on grounds as specified in sections 103(1)b-g of the Employment Relations Act 2000 (such as: unjustified disadvantage; discrimination; sexual harassment; racial harassment; duress with respect to union membership; and the employer not complying with Part 6A of the Employment Relations Act 2000).

    Any notice, as specified in the employment agreement, must be given within the trial period, even if the actual dismissal does not become effective until after the trial period ends. This trial period does not limit the legal rights and obligations of the employer or the employee (including access to mediation services), except as specified in section 67A(5) of the Employment Relations Act 2000.

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