New Zealand’s employment law framework is undergoing its most significant transformation in decades. The Employment Relations Amendment Bill will reshape how dismissal risks, remedies, and contractor classification operate in practice. While these reforms aim to provide employers with greater flexibility, they also introduce legal gray areas that will require clarification through future litigation. Below are summaries of four of the most high-impact reforms with practical notes for employers.

Quick Hits

• High-Income Threshold: Employees earning NZD 200,000 or more in total remuneration will lose unjustified dismissal protections.
• Remedies Reduced or Eliminated for Certain Conduct: Available remedies in personal grievance claims are limited where an employee’s conduct contributed to the situation, and authorities can reduce or eliminate compensation entirely where the employee engaged in serious misconduct, even if the employer’s process was flawed.
• Procedural Fairness Standard Loosened: A dismissal will not be found unjustified solely due to procedural defects unless the error materially disadvantaged the employee, effectively shifting the analysis toward a “harmful error” standard.
• Worker Classification Gateway Test: A new statutory gateway test determines whether a worker must be treated as a contractor, making it more difficult for gig economy workers to challenge their employment status.

Reform #1: High-Income Threshold Removes Unjustified Dismissal Protections

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