NZ Independent Contractor Agreement

An independent contractor is an autonomous, self employed person, who sets their own fees, pays their own tax and arranges how and when they will work.

There is a significant amount of New Zealand case law about the distinction between an employee and an independent contractor. The reason for this is that employees benefit from a range of legal protections including minimum wage levels, holidays and procedures to protect the employee if the continuation of their employment is at risk. Independent contractors are not eligible for these legal protections.

Given the significant difference between the two roles, there is often considerable debate about which category people fall into, particularly when there is a lack of clarity in the underlying documents. For this reason, it is important for there to be a clearly written and detailed independent contractors agreement in place.

This agreement sets out important matters such as:

- what services the contractor will provide;
- how much the contractor will be paid, how they will invoice and what happens if their invoices are not paid;
- what reports the contractor will be required to provide to the principal;
- how the agreement can be terminated; and
- how the principal’s intellectual property and confidential information will be protected.

Checklist is not available for this document.

Sample is not available for this document.

Fees
• How should I describe the fees?
Termination of Agreement
• Is a longer notice period better?
• Can I end the Agreement earlier if the other party has done something wrong?
• I want to end the Agreement, do I have to show that the other party is in breach of the Agreement?
• Do I have to give the other party a chance to have a say before I give them notice to end?
Notice Period
• Is a longer notice period better?
• Can I end the Agreement earlier if the other party has done something wrong?
• I want to end the Agreement, do I have to show that the other party is in breach of the Agreement?
• Do I have to give the other party a chance to have a say before I give them notice to end?

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Fees

• How should I describe the fees?

  An example is set out below:
  
  The Principal will make the following payments to the Contractor:
  
  $75.00 plus GST per hour or part thereof

  This hint is provided by Cavell Leitch.

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Termination of Agreement

• Is a longer notice period better?

  You should think about how much notice you would want the Contractor to give you if they want to get out of the Agreement. Consider how long it will take you to replace them. Could you do without the services they are providing for a period of time while you find a replacement? If the services are essential and specialised then you may want a longer notice period.
  

  This hint is provided by Cavell Leitch.

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• Can I end the Agreement earlier if the other party has done something wrong?

  Yes. The Agreement includes the right for either party to end the Agreement immediately if the other party does something wrong and doesn't fix it within 15 days of being told to fix it.

  This hint is provided by Cavell Leitch.

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• I want to end the Agreement, do I have to show that the other party is in breach of the Agreement?

  No. As long as you give the notice period that is set out in the Agreement, you don’t have to show that the other party has done anything to “deserve” the termination.

  This hint is provided by Cavell Leitch.

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• Do I have to give the other party a chance to have a say before I give them notice to end?

  No. As long as you give the notice period that is set out in the Agreement, you can end the Agreement simply by sending the other party notification. For example, if it is 1 June 2013 and the notice period is one month, you can send the other party a letter, fax or email that says that the Agreement will end on 1 July 2013.

  This hint is provided by Cavell Leitch.

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Notice Period

• Is a longer notice period better?

  You should think about how much notice you would want the Contractor to give you if they want to get out of the Agreement. Consider how long it will take you to replace them. Could you do without the services they are providing for a period of time while you find a replacement? If the services are essential and specialised then you may want a longer notice period.
  

  This hint is provided by Cavell Leitch.

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• Can I end the Agreement earlier if the other party has done something wrong?

  Yes. The Agreement includes the right for either party to end the Agreement immediately if the other party does something wrong and doesn't fix it within 15 days of being told to fix it.

  This hint is provided by Cavell Leitch.

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• I want to end the Agreement, do I have to show that the other party is in breach of the Agreement?

  No. As long as you give the notice period that is set out in the Agreement, you don’t have to show that the other party has done anything to “deserve” the termination.

  This hint is provided by Cavell Leitch.

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• Do I have to give the other party a chance to have a say before I give them notice to end?

  No. As long as you give the notice period that is set out in the Agreement, you can end the Agreement simply by sending the other party notification. For example, if it is 1 June 2013 and the notice period is one month, you can send the other party a letter, fax or email that says that the Agreement will end on 1 July 2013.

  This hint is provided by Cavell Leitch.

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This document has been prepared by Cavell Leitch