Organisational Level Agreement Template for New Zealand

An Organisational Level Agreement (OLA) is an internal contract that formalizes service delivery arrangements between departments or business units within your organization. Unlike Service Level Agreements (SLAs) that govern relationships with external vendors, OLAs manage internal service relationships and establish clear performance expectations between your own teams. Under New Zealand law, these agreements help ensure accountability, improve service quality, and create measurable standards for internal operations.

When do you need this document?

You need an OLA when establishing formal service relationships between internal departments. This includes situations where your IT department provides technical support to other divisions, HR delivers recruitment services to various business units, or facilities management maintains workspace standards across departments. OLAs are particularly valuable when implementing shared services models, managing cross-departmental projects, or when external SLAs require specific internal service levels to be maintained. They're also essential when budget allocation depends on service delivery metrics or when regulatory compliance requires documented internal processes.

Key legal considerations

Your OLA must clearly define service scope, performance metrics, and accountability measures to avoid disputes. Include specific service level requirements, response times, and quality standards that align with any external commitments your organization has made. Consider intellectual property arrangements, particularly when IT or data management services are involved, and ensure confidentiality clauses protect sensitive internal information. Address dispute resolution mechanisms, change management processes, and termination procedures. The agreement should also specify resource allocation, cost recovery mechanisms if applicable, and escalation procedures for service failures that could impact external customer commitments.

Legal requirements in New Zealand

Under the Contract and Commercial Law Act 2017, your OLA must meet basic contract formation requirements including clear offer, acceptance, and consideration. The Privacy Act 2020 applies when the agreement involves handling personal information between departments, requiring appropriate privacy safeguards and data handling procedures. If the OLA affects employee roles or responsibilities, ensure compliance with the Employment Relations Act 2000, particularly regarding consultation and good faith obligations. The Health and Safety at Work Act 2015 must be considered if services involve workplace safety responsibilities. Additionally, the Fair Trading Act 1986 requires that internal service descriptions and commitments are accurate and not misleading, even in internal arrangements.