Understanding the Employment Relations Amendment Bill: Key Questions and Answers
Introduction
On 17 June 2025, the Employment Relations Amendment Bill (Bill) was introduced to Parliament. The Bill proposes significant changes to New Zealand's employment laws, but what does this mean for you?
Let us work through some simple questions and answers to help you understand the changes.
Overview of Key Changes
What is the Employment Relations Amendment Bill?
The Employment Relations Amendment Bill is proposed legislation that seeks to modify the Employment Relations Act 2000, introducing changes to how employment relationships are defined and managed in New Zealand.
What are the major changes introduced by the Employment Relations Amendment Bill?
The bill introduces several significant changes, including:
Creation of a "specified contractor" category distinct from employees
Reforms to the personal grievance process
Introduction of a high-income threshold for unjustified dismissal claims
Removal of the 30-day rule and union-related requirements
Specified Contractors
How does the bill change the definition of an employee?
The bill introduces the concept of "specified contractors". These are contractors who will be explicitly excluded from the definition of an employee. This change aims to provide greater certainty for contracting parties.
What will be the requirements to be for specified contractors?
A specified contractor will;
Require a written agreement specifying they are an independent contractor
not be restricted from working for others
not be required to be available for work at specific times
be allowed to sub-contract their work
not have their arrangement terminated if they decline work
have a reasonable opportunity to seek advice before entering any arrangement
Personal Grievance Reforms
What changes are being made to the personal grievance process?
The Bill introduces the following changes to the personal grievance process:
Employees whose behaviour amounts to serious misconduct will not be eligible for remedies (i.e., compensation, reinstatement, and lost wages)
The Employment Relation Authority or Courts must not order compensation or reinstatement if the employees contributed to the situation leading to a personal grievance
High-Income Threshold for Dismissal Claims
What is the new high-income threshold for unjustified dismissal claims?
The bill sets a salary threshold of $180,000 per annum, above which employees cannot raise unjustified dismissal personal grievances, unless they contract back into this protection.
Why is there a salary threshold for personal grievances?
The government believes that high-income employees have greater bargaining power and resources, making them less vulnerable in employment relationships. This change aims to reduce employment litigation involving these employees.
When will this high-income threshold take effect?
This change will apply to employees on new employment agreements once the legislation comes into force. For employees on existing agreements there will be a 12-month transitional period where they can raise a dismissal grievance unless they agree the new threshold will apply early.
Removal of 30-Day Rule and Union Requirements
What happens to the "30-day rule"?
The bill revokes the 30-day rule, which required new employees' terms to reflect a collective agreement for the first 30 days.
Are there other changes to union-related processes?
Yes, the bill removes the obligation for employers to provide an active choice form regarding union membership and makes other changes to collective bargaining processes.
When will the Bill’s changes take effect?
It is important to understand that the Bill is still going through the legislative process. This means it has no legal affect until it passed. It also means it is subject to change as it progresses through the select committee and further readings in the parliament.
Conclusion
The Bill represents a significant shift in New Zealand's employment law landscape. As the Bill progresses through Parliament, both employers and employees should consider how these changes might affect their current and future working arrangements.
If you have specific questions about how the Bill impacts you, please contact our expert employment team.
