Employment Relations Amendment Bill: What Employers Need to Know

The Employment Relations Amendment Bill has received Royal Assent and is officially law in New Zealand.

This legislation introduces some of the most significant changes to New Zealand’s employment landscape in recent years. Employers must understand these changes to ensure their employment agreements, policies, and procedures are compliant and fit for purpose.

Key changes in the new legislation include:

Contractor vs Employee – new “Gateway test”

The new gateway test provides greater upfront clarity about contractor status.

If a working arrangement meets all the gateway criteria, the worker is a “Specified Contractor” and cannot claim employee status.
If any requirement isn’t met, the usual common law “real nature of the relationship” test still applies.
The aim is to make contractor arrangements clearer, fairer, and easier to understand for everyone.

Find out more about how to decide if a worker is an employee or contractor. Getting this right matters. Businesses should review agreements and ensure their contracting arrangements meet the new requirements.

Income Threshold for Personal Grievance Claims

• Employees earning $200,000 or more per year can no longer raise a personal grievance for unjustified dismissal.
• This threshold will update annually from 1 July 2027.
  Employees are also prevented from raising a disadvantage grievance if the unjustifiable action relates to their dismissal.
  The change applies immediately for new employees.
• For existing employees above the threshold, businesses have a 12-month transition period. During this time, parties can negotiate and agree in writing whether to opt in and retain personal grievance provisions or set other contractual terms.
• Employers should note that these employees can still raise other grievances, such as for unjustified disadvantage or breach of contract.

Removal of the “30-day rule” for New Employees

New employees covered by a collective agreement will no longer automatically have its terms apply for the first 30 days of their employment.

This change allows employers to hire new staff directly under individual employment agreements, even where a collective agreement is in place. Agreements should be in place before an employee commences in their role.

What Should Employers Do Now

Employers should review employment agreements, contractor arrangements, policies and internal HR processes to ensure they are fit for purpose. If you’re unsure how these changes may affect your business or workforce, contact us for more information.

Get Ready with RSM

Need help preparing? RSM’s People & Culture team can help you review agreements, update or implement new systems, and plan for a confident transition. Reach out to our team to get started and stay ahead of the change.

Contact Kerryn Strong to learn more.