Employment Agreement NZ Requirements – What Must Be Included (ERA 2000 s65)

Every employee in New Zealand must have a written employment agreement. This isn’t just good practice – it’s the law under section 65 of the Employment Relations Act 2000 (ERA). Whether you’re hiring your first staff member or reviewing existing contracts, getting the agreement right protects both you and your people.

This guide covers the mandatory content, the difference between collective and individual agreements, and what happens if you don’t have a signed agreement. All references are to the ERA 2000 as at May 2026.

What must be in every employment agreement

Section 65(2) of the ERA 2000 lists the minimum content. Your agreement must clearly state:

• Duties and responsibilities – a description of the work the employee will do. This can be a job title plus a short list of key tasks. Avoid vague phrases like “other duties as required” without context.
• Pay – the rate of wages or salary, how often it’s paid (e.g. weekly, fortnightly, monthly), and the method of payment. If the employee is paid by the hour, state the hourly rate. If salaried, state the annual salary and any conditions around overtime.
• Hours of work – the number of guaranteed hours per week, the days and times work is normally performed, and any flexibility arrangements. For part‑time or casual employees, be clear about minimum engagement and how hours are rostered.
• Trial period clause – if you want to use a trial period (section 67), the agreement must include a clause that states the employee will serve a trial period of up to 90 days, and that during that period the employer may terminate the employment without giving reasons. The clause must be agreed to before the employee starts work. Trial periods are only available for employers with fewer than 20 employees (section 67A).

Collective vs individual agreements

New Zealand has two types of employment agreements:

• Individual employment agreement – a contract between one employer and one employee. This is the most common type. It must contain the minimum content listed above, and can include additional terms agreed by both parties.
• Collective agreement – a contract between one or more employers and a union (on behalf of its members). It covers all union members employed in the work covered by the agreement. Individual employees who are not union members may still be covered by a collective agreement if their job falls within its coverage, but they must be given an individual agreement that incorporates the collective terms.

Under section 61, an employer must not employ someone on an individual agreement if a collective agreement already covers that work, unless the employee is not a union member and the employer has offered the collective agreement terms. In practice, most small businesses use individual agreements.

If you are negotiating a collective agreement, you must act in good faith (section 32) and provide the union with information needed for bargaining. The agreement must be in writing and signed by both parties.

What happens without a signed agreement

If you don’t have a signed employment agreement, the law still applies. The employee is still entitled to minimum rights under the Employment Relations Act, the Holidays Act, the Minimum Wage Act, and other legislation. But the absence of a written agreement creates serious risks:

• Uncertainty about terms – without a written record, disputes can arise over hours, pay, duties, and notice periods. The Employment Relations Authority will look at what was actually agreed, which can be hard to prove.
• Penalties – under section 75, an employer who fails to provide a written agreement can be ordered to pay a penalty of up to $20,000 for an individual, or $40,000 for a company. The Authority can also impose penalties for each employee affected.
• No trial period protection – if you don’t have a signed trial period clause, you cannot rely on the 90‑day trial period provisions. That means any dismissal during the first 90 days could be challenged as unjustified.

If you discover you have employees without a signed agreement, act immediately. Draft a compliant agreement, explain the terms, and ask the employee to sign. If the employee refuses, document your efforts and seek advice from an employment lawyer or the Ministry of Business, Innovation and Employment (MBIE).

For a step‑by‑step tool to create your own compliant employment agreement, visit the ShiftScript portal. It walks you through each required clause and generates a ready‑to‑use document.

Create your employment agreement now at ShiftScript

Additional clauses you may want to include

While not required by section 65, many employers add clauses for:

• Notice periods (minimum one week under section 67B for trial periods, otherwise as agreed)
• Leave entitlements (annual leave, sick leave, public holidays – these are set by law but can be clarified)
• Confidentiality and intellectual property
• Restraint of trade (must be reasonable and specific)
• Disciplinary and dismissal procedures

Any additional clause must not contradict the minimum legal entitlements. For example, you cannot agree to pay less than the minimum wage or provide less than four weeks’ annual leave.

Review and update regularly

Employment law changes. The minimum wage is reviewed annually, and new obligations (like the Fair Pay Agreements Act, if in force) may affect your agreements. Review your employment agreements at least once a year, and whenever you change roles, pay rates, or hours.

If you use a template from a website or a lawyer, make sure it is updated for 2026. Outdated clauses can be unenforceable or even illegal.