The Employment Relations Amendment Act has now received Royal Assent and came into force on 21 February 2026. These changes represent some of the most significant shifts to employment law in recent years, and it’s important for both employers and employees to understand the implications.
Here’s a snapshot of the key changes:
- New contractor versus employee “gateway test” – A clear test will now determine whether a worker is an employee or a contractor. If the criteria are met, a worker cannot claim employee status. This provides greater certainty for businesses engaging contractors, though some workers who would previously be considered employees may have reduced access to certain employment rights.
- Serious misconduct and remedies – Employees found to have committed serious misconduct will no longer be eligible for remedies for unjustified dismissal. As “serious misconduct” is not defined in the Act, early cases before the Employment Relations Authority (ERA) are expected to clarify how this operates in practice. It could also lead to retrospective investigations into whether serious misconduct has occurred.
- High-earning employees and personal grievances – From 21 February 2027, high-earning employees will be unable to raise personal grievances for unjustified dismissal. This change aims to reduce litigation risk for senior roles. Questions remain around how total remuneration will be calculated, and there will be a window for opt-out negotiations before the change takes effect.
- Union coverage for new employees – The previous 30-day rule in unionised workplaces has been removed. New employees will no longer automatically be covered by a collective agreement during their first 30 days.
This is a significant moment in employment law, and we are working closely with our clients to navigate these changes. We can support businesses in understanding the impact, drafting opt-out clauses, and managing negotiations regarding salary restrictions and personal grievance rights.
If you would like advice on how these changes affect your business or workforce, please get in touch with Abi Borrows on 021 346 994. Check out our website in a few weeks to watch a video with Abi discussing the changes and what it means. https://aspiringlaw.co.nz/news/videos