NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / New Zealand

<I>Your rights:</I> Treat contracts with caution

30 Nov, 2004 12:56 AM4 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

By JOHN HANNAN of Phillips Fox

Q. I have returned to New Zealand after being away for almost 10 years. I've been talking with a small agency about working with them as an associate working with clients in areas where I have particular experience and generating add-on business. Can you please
give me some advice on how to negotiate a relationship such as this so that there is a complete understanding of what is involved from the beginning rather than have any misunderstandings and disappointments later.

A. It sounds as though the agency wants to engage you mostly for business development purposes, to generate the add-on business. The first thing you need to decide is whether to work as an employee or independent contractor.

Working as an employee has advantages. At least part of your remuneration should be salary, so you will have a minimum income. You will be entitled to be paid holidays and sick leave. You will have some degree of job security. You cannot be dismissed unless you fail to perform, commit misconduct, or the employer no longer needs your services because of changes in its business.

But since the employer is taking the risk that you will not produce enough add-on business to make your employment worthwhile, the salary it will offer will probably be less than you could negotiate as an independent contractor. You could possibly resolve this by offering to work for a base salary, plus a commission or incentive arrangement.

The agency must give you a written draft employment agreement before the deal is made final. It must give you time to get advice on this. The employment agreement should set clear performance criteria and set a clear basis for how any commission or incentive arrangement is calculated. It should state what leave you are entitled to and what expenses and facilities, if any, you must provide and pay for. Normally the employer should provide all or pay for all facilities an employee needs - for example, a car, mobile phone and computer.

An alternative is to become an independent contractor to the agency. Remuneration can be structured on a retainer plus commission/percentage of fees, or a pure commission or percentage of fees earned. The commission or percentage of fees will be higher than you would get as an employee because you are taking the risk. You won't have entitlement to paid leave or sick leave and would have to make your own provision to pay tax and ACC levies and insurance (which you will need).

You will be able to deduct expenses for tax purposes. The agency will probably expect you to provide most of the facilities you need. You will have no security in such an arrangement - usually, either side can end independent contract arrangements with one month's notice. But the notice period can be negotiated.

You should get your independent contractor agreement in writing, although that is not a legal requirement.

It is important for the agreement to deal with the following things. It should say precisely how the agency is going to pay you, and when and how it will pay. It should also specify what facilities the agency will provide, if any, and what expenses it will pay.

It should set performance targets. It should also specify who "owns" the clients you get in. If you obtain a new client for the agency, are you entitled to take that client with you if you move on? Most independent contractor arrangements for "relationship" roles like this will have a restraint of trade clause that prevents you from poaching the agency's clients if you move on. But if you get the client in the first place - and are taking the risk of earning little or nothing if you don't get clients - you may want to be able to take that client with you.

In a role like this, the agreement needs to specify who owns copyright in written material you prepare.

Be clear about what you have to do, how you will be paid for it, when you will be paid, and whether the clients you get belong to you or the agency. If the agency is going to assign clients to you, they should be listed and there should be agreement about how and when the agency can re-assign those clients away from you.


Employment Relations Service

* Send us an employment law question

Please put "Your rights" in the subject line. Questions are not normally acknowledged and will be answered only through this column. Answers provided in this column are of a general nature only and should not be substituted for specific legal advice.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.
Save

    Share this article

Latest from New Zealand

New Zealand

Emergency services rush to 'dangerous' incident in Hamilton suburb

09 Jul 08:40 AM
Politics

Jacinda Ardern says she'll provide evidence to Covid Royal Commission

09 Jul 08:35 AM
New Zealand

Lotto numbers revealed in giant $10m Powerball draw

09 Jul 08:32 AM

From early mornings to easy living

sponsored
Advertisement
Advertise with NZME.

Latest from New Zealand

Emergency services rush to 'dangerous' incident in Hamilton suburb

Emergency services rush to 'dangerous' incident in Hamilton suburb

09 Jul 08:40 AM

A resident described seeing armed police and a helicopter.

Jacinda Ardern says she'll provide evidence to Covid Royal Commission

Jacinda Ardern says she'll provide evidence to Covid Royal Commission

09 Jul 08:35 AM
Lotto numbers revealed in giant $10m Powerball draw

Lotto numbers revealed in giant $10m Powerball draw

09 Jul 08:32 AM
Hospital staff safety concerns rise after gunpoint incident

Hospital staff safety concerns rise after gunpoint incident

09 Jul 07:20 AM
Solar bat monitors uncover secrets of Auckland’s night sky
sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP