More than a year in the making, the much-anticipated Employment Relations Amendment Bill passed its third reading on 17 February. With changes designed to enhance employer flexibility and certainty, the reforms will take effect the day after Royal Assent.
What is changing?
As detailed in our June 2025 article, the Amendment Bill (soon to be Act) sets out four key changes that all employers need to be aware of:
1. New “specified contractor” concept: Any worker who performs work arrangements that meet a specific set of criteria will be a “specified contractor”, and they will be excluded from the definition of an employee that currently applies under the Employment Relations Act 2000.
2. Changes to remedies available under the personal grievance regime: There are several employer-friendly changes to the way remedies are awarded for any personal grievance, reflecting a view that the Employment Relations Authority and the courts should prioritise consideration of the reason for an employer’s action or dismissal over the process by which the employer reached that decision.
3. Introducing a high-income threshold for unjustified dismissal claims: Employees whose annual remuneration meets or exceeds NZ$200,000 cannot raise a personal grievance in respect of their dismissal.
4. Removing the “30-day” rule: Employers will no longer be required to employ non-union member employees whose work falls within the coverage of an applicable collective agreement, based on the terms and conditions of that collective agreement for the first 30-days of their employment.
In this article, we summarise the key changes that will become law once the Bill receives Royal Assent (including changes since the previous Amendment Bill), and what employers should do to prepare for and address these changes when they come into force.
Key considerations for employers:
Next Steps
The Amendment Act will come into force on the day after Royal Assent. Royal Assent is generally given within seven days after the third reading.
These changes are significant and strengthen the position of employers, reducing process “red tape” and dramatically reshaping longstanding aspects of employment law in New Zealand. The proposed amendments to personal grievance remedies are likely to alter how employers assess risk and may diminish an employee’s leverage in negotiations, at mediation, or in litigation. It is possible that this will drive employees to explore novel or different claims and forums, such as contractual and discrimination claims, where remedies may be more freely available.
If you have any questions about the reforms, or any of the matters raised in this article, please get in touch with the contacts listed or your usual Bell Gully adviser.
Disclaimer: This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.
