2016-Jun 17: Fixed Term Employment Agreements

Visa Pak 264 - Advice for staff about fixed term employment agreements and when they are acceptable.

Visa Paks

17 June 2016

A fixed term agreement is an employment agreement that is offered for a specific period of time. The Employment Relations Act 2000 allows employers to offer fixed term agreements if there are genuine reasons based on reasonable grounds to offer a fixed term.
 
 The reason for the fixed term should be explained at the start of employment and put in the written agreement. The employment agreement must set out how the employment will end and why the employment is for a fixed term. For example, a job may be for a certain period of time (e.g. for six months to cover a person who is on leave for that period) or until something happens (e.g. when the project ends) or until work is completed (e.g. until the fruit is picked). Employees on fixed term employment have the same rights as other employees, except that their jobs will finish at the end of the fixed term.

It is important to note that a fixed term agreement cannot be used for a trial period (also called a probationary period) in order to establish the suitability of an employee for permanent employment or if intention is to limit an employee’s rights under employment legislation. An employee should not be offered a fixed-term arrangement when the job is really a permanent one.

In Immigration New Zealand (INZ)’s view, an employee being on a temporary visa is not by itself reasonable grounds for a fixed term employment, where the only reason for offering employment of a fixed term nature (as opposed to a permanent employee) is because the employee needs to retain a visa from INZ to continue performing the work.
 
This being the case, when considering an application for an employment based work visa, INZ may not accept a fixed term employment agreement where the only reason provided for the fixed term is because the employee may be applying for, or holding, a temporary visa.

Action

Please discuss with your team(s) and ensure that staff are aware of the above when assessing applications with fixed term agreements.

Any applicants holding an offer of fixed term employment where the stated reason is due to the length of visa (usually 12 months), or any other reason that does not comply with the above should be sent a PPI letter.