# Permanent or fixed-term employment Official source: https://www.employment.govt.nz/starting-employment/types-of-worker/permanent-or-fixed-term Scanned: 2026-06-07T03:31:31.402Z Use this as a current official guidance reference, not as a substitute for legal advice. ## Page Text Home Starting employment Types of worker Permanent or fixed-term employment Types of worker Starting employment Rights and responsibilities Types of worker Understanding types of workers Employee or contractor? Permanent or fixed-term employment Casual employment Apprentices and trainees Triangular employment situations Volunteers, internships and studentships Screen industry workers Hiring Employment agreements Everyone Permanent or fixed-term employment Learn about permanent and fixed-term employees and what entitlements they receive. Permanent employees Permanent employees: have ongoing employment which does not have an end date — the employment relationship will only end when either the employer or employee terminates it, for example, if the employee resigns can be part-time or full-time have all employment rights and responsibilities. Most employees in New Zealand are permanent. Every permanent employee must have an employment agreement. A written document setting out the terms and conditions of employment agreed by the employer and employee (also known as a ‘contract of service’). It can include other contractual documents and agreements made by the employer and employee. Every employee must have a written employment agreement. Employee rights and responsibilities Permanent employment is not the same as full-time employment ‘Permanent’ means the employee has guaranteed work and their job does not have an end date. A person can have permanent full-time employment or permanent part-time employment. Working full-time or part-time refers to the number of hours they work each week (part-time is generally less than 30 hours a week). To learn about the difference between full-time and part-time hours, visit: Understanding different types of worker Permanent part-time or casual An employee who is permanent part-time is not the same as a casual employee. A permanent part-time employee generally works less than about 30 hours a week and has regular and guaranteed hours or days of work. Casual employees work when it suits them and their employer, and there is no guarantee or expectation of regular or ongoing employment. To learn more about casual employment, visit: Casual employment Changing from permanent to casual Employees may want to change the way they work, for example, if they start tertiary study or return to work after parental leave and need to fit work around other commitments. If a permanent employee wants to change their work arrangements, they should first consider asking their employer if they can: put flexible working arrangements in place, or change their permanent hours of work. These options mean they can continue working as a permanent employee instead of becoming casual. Requesting flexible working arrangements However, employees can change from being permanent to casual if they agree to this with their employer. If an employer and employee agree for the employee to change from permanent to casual, the employer must make sure that any annual holiday and alternative holiday entitlements are dealt with properly. One way to do this is for the employee to sign a casual employment agreement and then resign from their permanent employment. Any annual holidays Paid time away from work for rest and recreation. and alternative holidays they’re owed are paid out in their final pay from their permanent employment. The employer must make sure any changes to employment are made in writing and agreed to by the employee. Final pay Creating an employment agreement Fixed-term employees Fixed-term employees: have temporary employment which will end on a specific date or when a particular event happens — for example, when a project is completed or a secondment ends can be full-time or part-time are not the same as contractors (a contractor is not an employee). They have the same employment rights and responsibilities as permanent employees for the time they’re employed, except they can get their annual holidays as pay-as-you-go if the fixed term is for less than 12 months. Employee or contractor? Employee rights and responsibilities Genuine reason for the fixed term There must be a genuine reason based on reasonable grounds for fixed-term employment. This means there must be a real, sensible reason for hiring someone for a fixed amount of time. The reason must be to do with the work, not the employee’s personal situation. For example, it’s not a genuine reason to hire someone on a fixed term because they can only work for a limited period of time. The employer must tell the employee what the reason for the fixed term is. The reason must be recorded in the employment agreement. If the reason is not genuine or based on reasonable grounds, it may not be enforceable. This means the employer may not be able to rely on it to end the employment. If they do, the employee may be able to claim unjustified dismissal. Covering a permanent employee’s parental leave. Doing seasonal work like fruit-picking. Managing a one-off project. The employee is on a temporary visa. The work is ongoing, like a project manager who moves from one project to the next in the same organisation. Poor work performance. The employer thinks there might not be enough work for the employee to do in the future. Fixed-terms and trials Employers must not use fixed-term employment instead of a trial or probationary period to test if an employee is right for the job. If this is the reason for the fixed-term employment, then this is not a genuine reason and the fixed term is not enforceable. If an employer wants to dismiss an employee on a fixed-term agreement before it’s supposed to end, they must follow a formal dismissal process. Dismissal A fixed-term agreement can include a: probationary period, or trial period if the employee has not worked for the employer before. If the employee later becomes permanent or is given another fixed-term agreement, their employer cannot then use a trial period. This is because the employee has already worked for the employer. They could use a probationary period if the employee is starting a new role. Trials periods Probationary periods Employment agreement for fixed-term employees Fixed-term employees must have an employment agreement. The agreement must say: how the employment will end, for example, on a specific date, and the reason for ending the employment that way, for example, because a project has ended. You can use our Employment Agreement Builder to create an employment agreement. Employment Agreement Builder (external link) Annual holidays for fixed-term employees All employees are entitled to 4 weeks of paid annual holidays each year after 12 months of continuous employment. Annual holidays Employees on fixed-term agreements of less than 12 months can get their annual holiday entitlement on a pay-as-you-go basis if they agree to this in their employment agreement. This means they can agree to have: 8% of their gross earnings added to their pay each pay period (a pay period is how often someone is paid, for example, every 2 weeks), or 8% of their gross earnings paid out at the end of the fixed term. Employers must only use pay-as-you-go if the employee genuinely qualifies for it. There are also other rules about paying pay-as-you-go. Find out more: Pay-as-you-go annual holiday pay Ending (terminating) a fixed-term agreement A fixed-term agreement will automatically end on the agreed end date or event unless it’s: terminated early, or extended. The employer does not have to give notice because they’ve already agreed with the employee how and when the employment will end. However, it’s still good to talk to the employee about the work ending before they finish up. If the employer wants to end the agreement early Employers must have a good reason to end the agreement early. If the employer wants to dismiss the employee, they must follow a formal dismissal process. This includes having a good reason for the dismissal, like serious misconduct. Dismissal If the employee is being made redundant, then they are entitled to the notice period in their employment agreement. Redundancy If the employee wants to end the agreement early If the employee wants to end the agreement early, they need to resign (give notice). Check the employment agreement to see what it says about how much notice is required. Resignation Extending a fixed-term agreement If the employer wants the employee to continue working, but still for a fixed term, they must: extend the agreement, or offer the employee a new fixed-term agreement. For example, the employer might want the employee to continue working if the project they’re working on is taking longer than expected. The employer must make sure any changes to employment are made in writing and agreed to by the employee. There is no limit on how many: times a fixed-term agreement can be extended fixed-term agreements an employee can have. However, there must be a genuine reason each time. The more times an agreement is extended or the employee moves from one fixed-term to the next, the more likely it is that: the reason is no longer genuine the employment would be seen as ongoing (permanent). Working past the end date If the employee and employer keep working together past the end date but do not formally extend the agreement, the terms and conditions could still be enforceable. This means the employer and employee could still hold each other to the agreement because the employment relationship has continued. However, the employer may not be able to rely on the agreement to end the employment. If they do, the employee may be able to raise a personal grievance. To avoid confusion or possible disputes, it’s important to make sure the employment agreement does not expire if the employer wants the employee to keep working. The employer should update the agreement, or give the employee a new agreement, which confirms what the working arrangements are — for example, whether the role is still fixed-term or has become permanent. Changing from fixed-term to permanent Employees who start off as fixed-term may become permanent if: the work they’re doing will carry on indefinitely the reason for being fixed-term is no longer genuine. The employer must make sure any changes to employment are made in writing and agreed to by the employee. Creating an employment agreement Annual holidays when employee becomes permanent If the employee has been on a fixed-term agreement of less than 12 months and then changes to permanent: the period of the fixed-term counts towards continuous employment for working out annual holidays, and when the employee takes annual holidays, their employer can reduce their annual holiday pay by the amount already paid as pay-as-you-go. Find out more: Pay-as-you-go annual holiday payments Mike has been working for his employer for 6 months, covering someone who’s on a secondment. His agreement is due to end in 2 months’ time, but he’s just found out that the person he’s covering for is not coming back to their original job. Mike’s employer offers him a permanent agreement, which Mike accepts. They both sign the agreement, and Mike becomes a permanent employee. Published: 18 December 2023 Last modified: 17 March 2026 Written for: Everyone Share this page: Print this page: