The much-anticipated Employment Relations Amendment Bill has been introduced to Parliament on June 17, 2025.
As it stands the main proposed changes to the Employment Relations Act 2000 shortlisted are:
Personal Grievance remedy awards
If an employee's actions has given rise to a grievance situation, the remedies awarded may be significantly reduced.
Provided the contributing behaviour by the employee amounts to serious misconduct, no remedy (reinstatement or compensation) can be made in the employee's favour.
Even if the employee's contribution to the situation is not at the level of serious misconduct, they may get significant reductions (up to 100%) against them in terms of either reinstatement and/or compensation for hurt & humiliation etc.
We imagine this part of the Bill will need further defining as to what constitutes serious misconduct and how to determine exactly how to gauge an employee's contribution to the circumstance. The Employment Relations Act as it stands already includes the ability for the Authority and Courts to reduce awards against an employer due to employee contribution, but we rarely see it significantly applied.
Contractor "Gateway test"
If the below are all positively present in the relationship in theory the person is definitively a contractor and as such cannot be challenged on that. If the below aren't all true then you could still maintain the relationship is that of a contractor/principal, but the usual tests would apply if challenged.
- The parties must have a written agreement specifying the relationship being that of an independent contractor.
- The contractor is not restricted from performing work for any other person, except while performing work for the principal.
- The contractor is not required to perform, or be available to perform, work for principal at a specified time or on a specified day or for a minimum period
OR
the contractor is allowed to sub-contract the work for the principal to another person (who may be required to undergo vetting by the principal to ensure compliance with any relevant statutory requirements before being sub-contracted)
- The principal does not terminate the contract if the worker does not accept an additional task or engagement that is additional to the work the contractor agreed to perform under the agreement
- It can be demonstrated the contractor had a reasonable opportunity to seek independent advice before entering into the arrangement.
Salary limit for unjustified dismissal claims
The Bill proposes that where an employee earns over $180,000.00 gross annually as a base salary, they will be excluded from raising a grievance for unjustified dismissal or disadvantage relating to a dismissal if their employment is terminated.
This would mean that an employer could simply 'fire at will', no consultation or good faith obligations, and no justifiable reason necessarily warranting a termination.
While the above situation is the proposed default position in law for high earners, it is further proposed that the parties could opt out of this arrangement. Although it's curious as to why an employer would.
If this Bill is successful there would be a 12-month transitional period for any existing grievances to be raised or parties to agree alternative terms.
Removal of the "30-day rule" with Collective Employment Agreements
The '30-day rule' affect employers with Collective Employment Agreements in the workplace. This rule currently requires employers to take on any new non-union employees under the same terms & conditions as the collective agreement for the first 30 days of employment and requires the employer to share the new employee's details to the respective union.
The change would mean the employer only has to present the collective agreement to the new staff member. The parties are free to negotiate an individual employment agreement from the outset. Clearly this stance is always a political hot potato between the current NZ governing political party.
This Bill is in the early stages of the parliamentary process. It needs to yet be opened for public submissions and Select Commitee review. We expect to see robust and strong opposition from unions and opposition parties throughout the process, although the Government are striving to get this enacted this year.