Fixed Term Employment Agreements

In general, and when in doubt, employees should be appointed permanently.

However, the law does make exceptions when there is a genuine reason for an employment relationship being time defined.

This may be because an employee is away after having or adopting a new child and will be returning to work in the future, covering an employee on long-term leave, or because a project is being undertaken at the school (e.g. to develop new resources).

In these types of situations, a school could use a fixed term employment agreement (FTEA).

The law around the use of FTEAs is strict, and Courts have often ruled in favour of employees who claim that they are permanent employees, despite being employed on an FTEA.

It is therefore important to get it right.

Historic employment practices at your school and the previously used documents for fixed terms may no longer be appropriate.

Keep reading to find out when an FTEA is valid and how to manage the lifecycle of an FTEA.

What is required for a valid fixed term employment agreement?

For a fixed term employment agreement to be valid, it requires:

a genuine reason, and
that the genuine reason that the employment is fixed term and when/how it the FTEA will end are clearly set out in writing to the employee in a letter of offer.

What is a genuine reason?

A genuine reason is one where:

the position cannot be filled by a permanently appointed employee, and
the reason for the fixed term coming to an end is clear and related to the reason the vacancy exists in the first place, and
it does not restrict or circumvent the employment rights of any employee (including to surplus staffing/redundancy provisions).

What are the three ways an FTEA can end?

There are three ways a fixed term can end.

At the close of a specified date – used when a fixed term has a clear start and end date (e.g. covering while another teacher is on study leave).

On the occurrence of a specified event – used when the employment will conclude when the specific event occurs, but the end date is not known at the time of appointment (such as covering a permanent employee on long-term leave and their return date has not been confirmed).

At the conclusion of a specified project – a fixed term with a defined duration that ends upon the completion of a specific project.

What are genuine reasons for fixed term employment in the education sector?

In the education sector, suitable genuine reasons for fixed term employment include:

Staffing to backfill positions for employees on leave (such as parental leave or long-term leave).
Covering for staff members who have a temporary Flexible Working Arrangement (FWA).
Covering vacant positions until the recruitment process is completed.
Projects of a specific and limited duration.
Additional staffing for overflow new entrants’ classes in terms 3 and 4 when an unexpected roll increase occurs.
Covering for staff members undertaking alternative duties/acting up for a period of time.
Appointment to a teaching role with a Limited Authority to Teach or Working Holiday Visa.

The following are generally not considered genuine reasons for FTEAs:

where roll fluctuations mean a position might not be required in the future
to trial employees for suitability or
trial proposed new positions.

It is important to always use the latest version of our templates when making an offer to ensure your fixed-term letters of offer comply with current law.

If you are at all unsure, please contact us for further support.

What if a student has their own targeted funding source that would follow them if they changed schools?

These situations require a case-by-case approach.

It is recommended that you seek advice from our Advisory and Support Centre on whether the appointment would meet the requirements for a genuine fixed term appointment, based on reasonable grounds, before advertising the role.

For example, the Ongoing Resource Scheme (ORS) funding (as indicated in the title) is funding intended for a student for the entirety of their school life and goes with them.

If a student is new to the school (for example the new entrant or first year at secondary school), it would be appropriate to appoint the additional support on a permanent basis.

If, however, the student arrives at your school in their last year of schooling and/or the permanently appointed employee leaves and there is a short period of time before the student leaves school, then an FTEA is more likely appropriate.

So we can best assist you when you contact us, please provide or have available the following information:

What is the job title role?
Why do you believe the role would not be permanent? (be specific)
Is this a brand-new role, or is this an existing FTEA role?
Has the same role ever been permanent?
If this is an existing FTEA - over what period of time has the role been treated as a fixed term?
Has this role been offered on a fixed term basis to the same employee previously – if so, when and for how long?
How will the fixed term position be funded?
What is the intended duration of the fixed term appointment?
Is it date-based - does it have a start and a stop date (provide details), or
Is it event-based – will it end after a specific event (provide details), or
Is it project-based – what are the circumstances of it coming to an end?
Any other relevant information.

What counts as a project?

A project has:

a specific purpose and rationale
clearly defined objectives
a schedule/key dates
desired and measurable outcomes that are reported
directly linked to promoting/increasing student educational achievement.

An employee carrying out the project work should not be doing work that could be carried out by a permanently appointed employee.

Project-based reasons can present challenges with the language used when drafting the letter of offer (“LoO”).

It is essential you contact the Advisory and Support Centre to discuss the wording before making any offer when the reason for the fixed term is related to a specific project.

Please have the project synopsis (with the bullet point details above) drafted and ready when you contact us, as this helps us assist you faster.

Can an FTEA be extended?

There are some instances where it might be appropriate to extend an FTEA, or it may be necessary to document a new FTEA. However, caution should be exercised, and advice sought from us as early as possible.

An FTEA with a specified date end can be extended for a short period in some circumstances.

For example, when the employee for whom the fixed term employee is backfilling/covering will not be returning to their position by the expected date of the original fixed term but is expected to do so within a reasonably short period of time of the end date.

That is provided that the reason for the proposed extension to the original fixed term employment is the same as the reason for the original fixed term employment agreement (such as an extension of leave).

Any extension must be documented and signed off by the employee and the employer – that is, by a person with a valid delegation to do so.

When can an FTEA not be extended?

An extension to an FTEA cannot be used if:

The specified event that the fixed term was tied to has occurred.
New or different work is available for a fixed term.
If similar work is available for a new period of time but is then ending for a different reason.
The initial project or discrete piece of work has been completed.

Can a fixed term end early (before its specified date or event)?

Generally, there are three situations where an FTEA can end earlier than the date or event specified. These are:

Where the employee gives the required period of notice, or
By mutual agreement between the employee and employer, or
As an outcome, following a formal competency or disciplinary process.

A current employee's FTEA is about to end. Another genuine reason for an FTEA has just come up – can they be appointed straight into that role?

The Collective Agreements for the following groups require advertising and an appropriate recruitment process to take place each time a new fixed term vacancy becomes available:

Teaching staff
Principals
Teacher Aides
Support Staff
Kaiārahi i te Reo
Therapists
ATSSDs
Special Education Assistants

This is because each FTEA is treated as a new vacancy (even if it is a similar genuine reason to the previous FTEA an employee held).

The provisions of those Collective Agreements require new vacancies to be advertised and a proper recruitment process to take place.

Therefore, an employee cannot be appointed straight to another FTEA without going through the recruitment process like every other candidate.

However, nothing stops this employee from being appointed if the recruitment process determines they are the person best suited for the new FTEA.

Schools need to be mindful and careful not to imply or suggest the possibility of ongoing employment either verbally or in writing to any FTEA employee.

Questions a principal could ask

Do I understand the legal requirements for valid fixed term employment agreements?
What are genuine reasons for FTEAs in the education sector?
Are there employees on FTEAs who should be permanent?
What notice period is required for an FTEA?

Templates, resources, and references

Click on the link(s) below to access the templates, resources, and references related to this topic.

These may download or open in a separate browser depending on your device.

Links from us

There are some additional steps involved when offering employment to someone who is not a member of a union or will be doing work not covered by a CA.

This is explained in our article on offering employment in a unionised environment.