Update: The Employment Relations Amendment Bill Is Now Law

The Employment Relations Amendment Bill has now received Royal Assent and is officially law. The changes take effect immediately.

As previously outlined, the reforms significantly alter contractor classification, unjustified dismissal protections, remedies, trial periods and onboarding obligations.

The new “Specified Contractor” gateway test means that contractor arrangements must meet statutory criteria or the real nature of the relationship test under the Employment Relations Act will apply. Written agreements, genuine flexibility, subcontracting rights, no restrictions on other work, and evidence of independent advice are now critical.

A NZ $200,000 high-income threshold now applies to unjustified dismissal claims. While this limits certain personal grievances, it does not remove the need for fair process, and we expect alternative claims to emerge.

The justification test has been refined, and the remedies regime now allows reductions of up to 100 per cent where an employee has contributed to the situation. In cases where the Court determines the matter amounts to serious misconduct the Court may choose to award no remedies.

Trial period protections have been expanded to prevent unjustified disadvantage claims relating to compliant trial dismissals, and the 30-day collective agreement rule for new employees has been removed (subject to existing collective agreement terms).

For more detailed commentary on each of these changes, please refer to our previous article outlining the reforms and what they mean in practice.

We strongly recommend reviewing your contractor documentation and employment agreements now to ensure compliance and minimise risk.

If you would like support reviewing your documentation or managing implementation, please contact us.

The Knowhow Team