How long is a fixed term agreement?

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Fixed term - how long?

How long is a fixed term?

Drafting a fixed term employment agreement is like piecing together a complicated puzzle – and it’s not uncommon for employers to miss an important piece. This is because the Employment Relations Act 2000 sets out specific conditions that must be included in the employment agreement. For example one of the most important conditions a fixed term employment agreement can only be offered to a prospective employee if there are genuine reasons and reasonable grounds for the fixed term. Many employers simply nominate a date upon which the fixed term will end without actually turning their mind to whether there a genuine reasons and reasonable grounds for the fixed term. An older but certainly interesting case, is the Employment Relations Authority’s determination in – New Zealand Educational Institute v Board of Trustees Read Beach Primary school (AA 437/05). Teacher aides were employed by the school to work with children with special needs. The Authority accepted there were genuine reasons for the fixed term agreements because the school received external funding for the positions and the funding was tied to individual children. However, the Authority did not accept that there were reasonable grounds because the roll was stable and there was a waiting list. In short, the employer could have managed issues relating to fluctuating funding and the roll by varying hours or perhaps – if necessary – making a position redundant. So if you are thinking of offering a prospective employee a fixed term employment agreement – don’t forget the most important piece – ensure there are genuine reasons and reasonable grounds for offering a fixed term offer of employment.

Our specialist employment team are available to help with getting your fixed term employment agreements right – contact our employment team here.

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Kylie Hudson
Solicitor

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