A significant shift in the New Zealand employment law landscape has been confirmed, with the Employment Relations Amendment Bill 2025 now set to become law. The Bill passed its Third Reading on 17 February 2026, and comes into force on the day after it receives Royal Assent.
Key Changes
- The definition of employee will expressly exclude a new category of worker, labelled a “specified contractor”. To qualify for this, it must be specified in a worker’s written agreement that the worker is an independent contractor, or that they are not an employee. The worker must also have: freedom to work for others (except while performing their contracted work); either an ability to subcontract the work (subject to some exceptions) or to not be required to work at a specific time, day or for a minimum period; and an ability to turn down additional work without the arrangement being terminated. The worker must also have been given a reasonable opportunity to seek independent advice before entering into the contractual arrangement. As specified contractors will not be employees, they will not be able to access any employee protections or entitlements.
- Employees who earn $200,000 or above annually (including ordinary remuneration, bonuses, commissions, etc) will no longer be able to challenge their dismissal through a personal grievance or legal proceedings, unless expressly agreed otherwise in an employment agreement. Employers will no longer be required to follow good-faith procedural steps when dismissing these employees. This change will not impact existing employees for the first 12 months following the Bill becoming law, unless otherwise agreed. This effectively means that existing employees who would fall within this income bracket have 12 months to negotiate with their employer if they do not want this law change to affect them in the future, or if they want enhanced entitlements should they be dismissed.
- No remedies will be available for a successful personal grievance if the employee contributed to the situation, and their contribution amounts to serious misconduct. Limited remedies may be available if there is contribution but not serious misconduct, although remedies could be reduced by up to 100%, and no reinstatement or compensation will be awarded in those situations at all.
- The 30-day rule will be removed, which means that new employees will no longer start the first 30 days of their employment on terms consistent with an applicable collective agreement. However, there are requirements around the information employers will need to share with employees regarding applicable collective agreements and unions.
Pros and cons?
The current Minister for Workplace Relations and Safety has stated that this Bill will improve job opportunities by giving businesses more confidence when hiring. However, some may say that the Bill represents a new direction for employment law in New Zealand where the balance shifts in favour of the employer.
Either way, these changes represent a significant change to the status quo, and the effects will be felt by employers, employees and unions.
Jim Roberts, Alison Maelzer and Jodi Sharman will be discussing these changes in more detail at an upcoming webinar, the date of which will be announced soon. Keep your eye out for more information to follow!
If you have any questions about the Employment Relations Amendment Bill, please get in touch with the Employment Law Team or your usual contact at Hesketh Henry.
Disclaimer: The information contained in this article is current at the date of publishing and is of a general nature. It should be used as a guide only and not as a substitute for obtaining legal advice. Specific legal advice should be sought where required.
