Fixed term employment agreements can be a legitimate and useful tool for New Zealand employers when there is a genuine, or temporary business need. Common examples include
project-based work, seasonal demand, or providing cover for parental leave.

However, fixed term agreements are strictly regulated. Section 66 of the Employment Relations Act 2000 (‘the Act’) sets clear requirements. If these are not met, a fixed term employment agreement may be treated as permanent employment, exposing employers to arrears claims for failing to manage holiday pay obligations correctly, personal grievance claims, financial remedies, and penalties.