Employment Relations Amendment Act NZ (2025–2026) Explained

 Employment Relations Amendment Act NZ (2025–2026): What Employers Need to Know – by Caroline Silk, Barrister and Mediator

Last updated: 27 February 2026

The Employment Relations Amendment Act has now received Royal Assent and is law, introducing significant NZ employment law changes for 2025–2026.

On the surface, some of these changes may look straightforward. In some cases, they may even appear favourable. In reality, there are fish hooks in each of them.

Whether you are an employer, employee or contractor, it is important to understand how these amendments now operate in practice and how they may affect your existing arrangements.

Contractor vs Employee – The New Gateway Test in NZ

One of the most talked-about changes is the new statutory “gateway test” for determining whether a worker is genuinely an independent contractor. This follows recent cases, including the Uber driver decisions, where the Court looked beyond the label in the written contract and assessed the true nature of the working relationship.

To satisfy the contractor gateway test under NZ law:

• There must be a written agreement stating the person is an independent contractor.
 • The contractor must not be restricted from working for others except while actually performing work for the principal.
 • The principal cannot impose restrictions that effectively prevent the contractor from working elsewhere, such as specifying fixed hours in the way an employer would.
 • The contractor must be free to subcontract the work to someone else, and the principal cannot vet or approve that subcontractor unless required by law.
 • The contract cannot be terminated simply because the contractor declines work that is offered.

On paper, this may look like greater flexibility for businesses. It is not a miracle solution. The reality of the working relationship still matters.

Businesses relying on contractor arrangements should review whether their contracts and day-to-day practices genuinely reflect independent contracting under NZ employment law.

Remedies and Serious Misconduct

Another key change relates to remedies in personal grievance claims. Under the amended legislation, where an employee has contributed to the situation and their conduct amounts to serious misconduct, remedies cannot be awarded.

This does not remove the obligation to follow a proper and fair process. Simply labelling behaviour as serious misconduct is not a “Get Out of Jail Free” card.

Employers must still act in good faith and follow appropriate disciplinary procedures.

These provisions will now be tested in the Employment Relations Authority and Employment Court as parties interpret what qualifies as serious misconduct under the amended framework.

$200,000 Income Threshold for Unjustified Dismissal Claims

A significant change introduces a $200,000 income threshold.

Employees earning over $200,000 per annum will no longer be able to bring a personal grievance for unjustified dismissal or unjustified disadvantage where that disadvantage relates to dismissal.

In practical terms, this moves closer to what some describe as “fire at will” at that income level.

There is a 12-month transition period before the change takes full effect.

It is also possible to contract out of this provision, and we are likely to see more negotiated termination or “golden parachute” clauses for higher-income earners.

Importantly, the Act does not automatically override the wording of an employment agreement. If a contract contains procedural obligations around termination, those contractual requirements may still apply.

90-Day Trial Period NZ – Clarification of Disadvantage Claims

The amended legislation clarifies the position regarding the 90-day trial period in NZ.

If there is a valid 90-day trial clause and an employee is dismissed within that period, they cannot bring a personal grievance for unjustified dismissal.

The amendment now makes it clear that they also cannot bring a disadvantage claim where that disadvantage relates to the dismissal.

Claims for bullying, discrimination or sexual harassment remain available, unless those claims relate directly to the dismissal itself.

While described as a minor tweak, this change tightens the boundaries around trial period claims and reinforces the importance of ensuring trial clauses are valid and correctly drafted.

Collective Agreement 30-Day Rule Change

Previously, where a collective agreement covered the work being done, a new employee had to be employed on those collective terms for the first 30 days.

The law has now changed.

Employers can offer an individual employment agreement from day one.

However, employers must still inform the employee that a collective agreement covers the work and provide details about how to join the relevant union.

The important fish hook is that many collective agreements already contain clauses requiring the collective terms to be offered for the first 30 days regardless of what the legislation says.

Just because the law has changed does not necessarily mean existing obligations have disappeared.

Employers should review their collective agreements carefully before changing onboarding processes.

What Should Employers, Employees and Contractors Do Now?

These NZ employment law changes are not necessarily as simple as they first appear.

Each amendment contains practical and contractual considerations that need to be reviewed in context.

Whether you are an employer, an employee or a contractor, now is the time to review the arrangements you have in place and make sure they are fit for purpose for your needs.

That may mean getting legal advice before an issue arises, rather than after.

Frequently Asked Questions About the Employment Relations Amendment Act NZ

What is the Employment Relations Amendment Act in New Zealand?
 It is legislation that updates key areas of NZ employment law, including contractor status, remedies for serious misconduct, 90-day trial periods, income thresholds for personal grievance claims, and collective agreement rules.

Can an employer dismiss someone earning over $200,000 without reason?
 Under the amended legislation, employees earning over $200,000 cannot bring a personal grievance for unjustified dismissal, subject to transition provisions and the wording of their employment agreement.

What is the new contractor gateway test in NZ?
 It is a statutory test that sets specific criteria to determine whether a worker is genuinely an independent contractor rather than an employee.

Does the 90-day trial period still apply in New Zealand?
 Yes, but the law now clarifies that disadvantage claims relating to dismissal cannot be used to get around a valid 90-day trial clause.

Caroline Silk is a New Zealand Barrister and Mediator specialising in employment law. She advises employers, employees and contractors across Aotearoa on complex workplace issues and dispute resolution.